Social enterprise hawker centres need time to establish themselves: Masagos

·Senior News & Video Producer
While the government does not impose price regulations on SEHC hawkers, stallholders are required to offer at least one meal option at $3 or under.
“As with any trials and experiments, we cannot always get it right the first time,” said Minister for the Environment and Water Resources Masagos Zulkifli in Parliament on Monday (19 November). (PHOTO: MCI)

The seven existing socially conscious enterprise hawker centres (SEHCs) need “time to establish themselves”, said Minister for the Environment and Water Resources Masagos Zulkifli on Monday (19 November).

“Despite implementation challenges, the SEHC model is generally sound. Food prices are kept affordable with a good variety of high-quality options. And the majority of hawkers are doing well at the SEHCs. We should not undo these achievements,” Masagos said in Parliament.

“As with any trials and experiments, we cannot always get it right the first time. We have heard the feedback and we will adjust the model to better serve Singaporeans.”

The issue of SEHCs has come under public scrutiny over the past weeks, with Makansutra founder K F Seetoh having stirred up much of the debate by openly criticising the SEHC model on social media.

Masagos said he was heartened by the public discussion on how existing National Environment Agency (NEA) hawker centres are better run than the SEHCs.

“It is testimony that existing hawker centres under NEA management have done well over the years to meet the needs of their communities and hawkers. But it is not enough to keep doing things the same way. This is why we need to continue with the SEHC model.”

New ideas, younger hawkers

Responding to questions from Members of Parliament (MPs), the 55-year-old Tampines GRC MP noted that Ci Yuan, the first SEHC, was opened only three years ago, while the latest SEHC – in Pasir Ris – was opened this January.

Within this timeframe, however, the SEHCs have established themselves within their communities, he added, highlighting that 97 per cent of the Ci Yuan hawkers had chosen to renew their contracts, while a similar rate was seen at the SEHC in Bukit Panjang.

These rates are similar to those seen at hawker centres run by the NEA, said Masagos.

On the benefits of SEHCs, he noted that their operators are able to “bring new ideas and inject innovation that hawkers, individually, or government cannot”.

“For example, they are able to curate food stalls for quality and variety. They are also able to bring in famous food recipes and are better placed to run hawker incubation programmes to help sustain the hawker trade,” he said.

“They also innovate to improve footfall and enhance vibrancy of the centres through better marketing and place-making programmes – and not just leave it to chance.”

Masagos cited the implementation of centralised dish washing and the used of automated tray return systems as examples of innovations seen at SEHCs that have helped hawkers there to “overcome manpower challenges”.

Meanwhile, some SEHCs have also offered services such as free parking and shuttle buses to attract more footfall, while the provision of trained cleaners and a clean environment have helped to boost table turnover rates – benefitting both patrons and hawkers.

The minister also noted how the SEHCs have managed to attract new entrants into the hawker trade, with the five operators having incubated a total of 38 aspiring hawkers since they started operations.

He also observed how the median age of hawkers at SEHCs is 43, which is “much lower” than the median age of hawkers elsewhere.

Keeping things affordable but profitable

In his speech, Masagos also reiterated the safeguards put in place by the NEA when selecting SEHC operators to prevent profiteering.

He noted that the NEA favours operators that impose lower overall charges on stallholders, and that operators are required to propose rentals and operating costs upfront. These rates cannot be changed over the tenancy periods. Operators are also expected to be be transparent about costs including optional charges for value-added services.

A large part of the costs incurred by SEHC hawkers, such as table-cleaning fees, are pass-through charges that the operators cannot benefit from. In addition, SEHC operators are also required to reinvest at least 50 per cent of any operating surplus into social benefits for the hawker centres and stallholders.

In terms of maintaining affordable food prices, Masagos said that while the government does not impose price regulations on SEHC hawkers, stallholders are required to offer at least one meal option at $3 or under.

He added that each SEHC offers close to 40 affordably priced meal options. Furthermore, the SEHC operators also offer a variety of food options – something which is “not always a given at existing hawker centres”.

With regard to rental rates, Masagos said that the “market mechanism is working” and that “the government should not intervene unnecessarily by implementing low or no rental” for hawkers at SEHCs as this could “affect fair competition”.

“It would be inappropriate for the government to subsidise a hawker on the basis that business is poor. This would be unfair to a better performing hawker, who thrives on healthy competition,” he said.

Related stories:

NEA to co-fund centralised dishwashing costs at 7 new social enterprise hawker centres

Jurong West Hawker Centre to change controversial tray-return scheme

Strong public views on social enterprise hawker centres will lead to change: Makansutra’s K F Seetoh

NEA ‘won’t hesitate’ to take action against errant hawker centre operators: Amy Khor

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