Car Park Maintenance Contracts Issued by HDB and Town Councils
Ministry of National DevelopmentSpeakers
Summary
This question concerns why the Housing and Development Board (HDB) issues maintenance contracts to Town Councils (TCs), the fee determination process, and the measures to prevent TCs from cross-subsidising HDB. Minister for National Development Desmond Lee explained that TCs may manage HDB car parks via mutual agreement to leverage operational synergies and achieve cost savings through bulk tenders. He stated that fees are determined by comparing TC operating costs with private sector market rates, supplemented by an agency fee paid by HDB. Maintenance agreements are reviewed every three years to ensure fees remain fair and reflective of current market conditions. Additionally, TCs have the autonomy to decline these contracts, in which case HDB would procure alternative maintenance services through a separate tender process.
Transcript
37 Mr Murali Pillai asked the Minister for National Development (a) why does HDB issue Town Council contracts for maintenance of HDB car parks although such maintenance falls outside the Town Councils Act 1988; (b) how are the fees in the contracts determined; and (c) having regard to the different contract cycles and price points of the maintenance contracts issued by HDB and Town Councils respectively, how is the risk of Town Councils cross-subsidising HDB for the maintenance of HDB car parks addressed.
Mr Desmond Lee: HDB car parks are not common property and, therefore, do not come under the management and maintenance of Town Councils (TCs). However, the Town Councils Act allows TCs to manage and maintain HDB car parks on terms and conditions mutually agreed between HDB and TCs. In this regard, HDB offers TCs the option to serve as the maintenance agent for HDB car parks, as there may be operational synergies in TCs doing so. For instance, TCs can, potentially, obtain lower prices from calling bulk tenders for maintenance services. TCs can also better coordinate the scheduling of maintenance works to minimise disruption to residents.
HDB ensures that the fees are fairly set in a number of ways. In determining the maintenance fees, HDB considers both TCs’ submissions of their operating costs for maintenance of car park equipment, such as pumps and fire protection systems, as well as the equivalent private sector rates to ensure that TCs are compensated fairly relative to market prices. It then adds an agency fee to TCs. The maintenance agreement period is, typically, three years. So, this allows for regular review of the fees. In addition, TCs can assess and decide if they wish to serve as HDB’s maintenance agent. Should TCs decline the offer to maintain HDB’s car parks, HDB will procure alternative maintenance services via tender.