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Reasons for high-priced contracts unclear in AHTC trial

In the AHTC trial, whether higher-priced contracts were justified over savings was discussed.

SINGAPORE – Mothership reports Senior Counsel Chelva Rajah, who represents the three Worker’s Party (WP) MPs and two town councillors on trial, cross-examined Goh Thien Phong, a partner in the accounting firm PricewaterhouseCoopers (PwC).

The defence argues expensive contracts given by the defendants were not the result of mismanagement and that the AHTC was not aware of better options.

In 2015, when the AHTC was known as the Aljunied-Hougang-Punggol East Town Council (AHPETC), the AHTC managed contracts with Titan Facilities Management, which handled building maintenance, and J Keart, which handled fire protection services.

These contracts were due to expire on March 31, 2015, and the AHTC declined to renew these contracts under the same terms, which was allowed by a clause in the contracts. Phong argues this decision cost $700,000 in potential savings.

Rajah didn’t dispute the savings potential but instead cited an email from then contract manager Phillip Lim. In the email sent in December of 2014, Lim discussed the contracts’ imminent expiration but did not mention a clause in the contracts that gave the option to the AHTC to extend them.

An email sent by then Chairman of the AHTC Sylvia Lim to Phillip Lim asked about the possibility of extending the contracts, to which Lim erroneously replied was not possible. After this exchange, Sylvia Lim made the decision to sign other providers.

Goh maintains he was unaware of these emails at the time.

PwC also claimed a pest-control contract awarded by the AHTC to Rentokil, instead of the cheaper Pest-Pro, cost the town $2,700 in potential savings.

Rajah admits Pest-Pro’s bid was lower than Rentokil’s, but he disputes the idea that Pest-Pro was the best company for the job, claiming Rentokil had a more experienced and qualified for certain subsidies which Pest-Pro did not.

The pest-control contract deliberations were recorded in the minutes of a meeting prior to the signing of Rentokil, though Goh stated he was not made aware of the minutes, like the emails regarding contracts with Titan Facilities Management and J Keart.

However, Rajah cited an email sent by the AHTC to PwC in December of 2016 where the minutes of the meeting were included. When asked for comment, Goh admitted he believed the minutes were sent to PwC; however, he said the staff member who received the email had left the company and, so he did not see the email at the time.

The last contract discussed by Rajah was one awarded to Tong Lee Engineering, concerning booster pumps, roller shutters, and refuse flushing systems. PwC argued the AHTC cost the town $26,000 in potential savings by declining to award the contract to Red-Power Electrical Engineering.

Rajah disputed this by alleging that Red-Power Electrical Engineering had verbally informed the AHTC they could not cover Punggol East, a district then overseen by the AHTC, then known as the AHPETC.

Goh asserted that while PwC had requested documents from the AHTC concerning the Tong Lee Engineering Contract, he had not been made aware of this exchange at the time.

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