A software deal probe
Prime Minister’s welcomed move has postponed judgment on this hot potato and improved PAP’s prospect at the polls. By Seah Chiang Nee
Jan 12, 2013
(Synopsis: With the opposition in disarray, the consensus is for the ruling party to retain Punggol East.)
IN recent years, the ruling People’s Action Party (PAP) appeared to have set off one political landmine after another.
The latest was the public furore over the party’s purchase of assets, a software programme, developed with public money – via a two-dollar shell company.
After several abortive explanations by party representatives, Prime Minister Lee Hsien Loong stepped in to order an official probe into the deal.
It is a political blow to the PAP who will be facing a difficult by-election in two weeks’ on Jan 26.
The controversy had raised wide discussions and showed the depth of public feelings on the deal and its implications.
Lee had to act fast to contain it and prevent it from damaging his party’s candidate at Punggol East.
Apart from announcing the review, his government also moved to reduce another source of public unhappiness – rising costs of property especially resale HDB flats.
Five days before Nomination Day, the authorities announced a new cooling package, which among other things: -
a) New rules governing loans for HDB flats have been rolled out to ensure buyers do not overstretch their finances.
b) Making it harder for permanent residents (PRs) to buy a first property, whether private or public, by imposing an additional 5% stamp duty.
These are popular issues with the public and helped to assuage public feelings.
But the biggest potential for a problem involved a computer system developed by 14 PAP-managed town councils using service and conservancy fees collected from Singaporeans.
After seven years of maturing, the IT system was sold to a dormant PAP-owned company, “the only bidder”, for S$140,000.
The firm, Action Information Management (AIM) Pte Ltd, then leased the system back to the 14 councils for a monthly fee of S$785 each, producing a yearly revenue of S$131,880.
Prominent online commentator Leong Sze Hian said: “This must arguably be the best business tender deal of the century with 94% of investments recouped in just the first year!”
What’s more, AIM is run by three former PAP MPs and carries the same address as the PAP headquarters.
Singaporeans are worried that a software developed by public funds for the running of public communities could be sold to a two-dollar company owned by the ruling party.
The whole episode has raised several unanswered questions that worry Singaporeans and clouded the city’s image as a transparent society.
The first obvious question is whether it had been pre-planned to deprive constituency services from being used by the opposition in the event that it won control.
The Workers Party said it was served notice that the IT services would not be offered to it in Aljunied after it won the group constituency.
If that was the case, there could be wider implications for the country should the PAP lose power to the opposition: Would the transfer of power be fair and smooth?
Or will the new government find itself deprived of services because they had been bought over by a political party?
This is why PM Lee’s order for a probe was warmly welcomed by most Singaporeans.
“This is the right move for the PAP to maintain its credibility and standing in the eyes of Singaporeans which had been waning during the past 10 years,” a web surfer said.
“To achieve this, the probe should be unbiased and transparent and those, if found guilty, should be sacked.”
However, some have expressed reservations about the motive, believing it was to prevent it from affecting the polling outcome.
The announcement of the review and date for the by-election came only days apart. Lee said the probe would take one or two months, long after polling day.
This led some cynics to believe that it is the PAP’s strategy to keep this hot potato from being turned into an election issue.
The controversy also raised the question on whether Lee’s stated desire for political transparency is shared by everyone else in his party.
In his statement, Lee said that the National Development Ministry would review the AIM deal to see if it was in “the interest of transparency and maintaining trust in the system”.
It would also determine if “public funds were safeguarded and resident’s interests were not compromised”.
He added that the ministry would take a broad-based review of the “fundamental nature” and purpose of town councils to ensure “high overall standards of corporate governance” at the same time.
This implied that the PM, who is PAP secretary-general, may not have been aware of what had happened.
Some critics were disappointed that it is only “a review”, not “an investigation”, and that a government ministry, not an independent body, will be conducting it.
It is in such an environment that the Punggol East (more than 30,000 voters) by-election will take place in a fortnight’s time.
In the 2011 general election, Palmer won the seat by a strong 54.5% to 41% for Workers Party candidate Lee Li Lian. A third candidate Desmond Lim polled 4.4% of the votes.
But given the mood change since, the ruling party will have a tougher time – if it is a two-party contest. If it faces the Workers Party alone, the PAP may well lose.
(This is a rewritten version of an article published in The Star on Jan 12, 2013 and includes new information for Singapore readers).