Effectiveness of Move to Let Social Enterprises Run Hawker Centres

1 Mr Liang Eng Hwa asked the Minister for the Environment and Water Resources (a) whether the running of hawker centres by social enterprises on a not-for-profit basis has achieved its desired outcomes; (b) whether it has reduced the overall operating costs for hawkers and food prices for consumers; and (c) whether it has helped attract new hawkers to the trade.

The Senior Minister of State for the Environment and Water Resources (Dr Amy Khor Lean Suan) (for the Minister for the Environment and Water Resources):Hawker centres are places where Singaporeans from all walks of life can interact while enjoying hygienic and affordable food. To meet the changing needs of society while ensuring the sustainability of the hawker trade and the affordability of hawker food, the Government has been exploring alternative management models where socially-conscious operators are appointed to manage hawker centres on a not-for-profit basis. These operators have the flexibility to innovate and customise solutions for each centre. With their experience in food and beverage operations as well as property and lease management, we believe these operators are able to improve the dining experience, enhance vibrancy, and improve the operational efficiency of hawker centres under their management.

There are currently four hawker centres managed by socially-conscious operators, namely at Blk 208B New Upper Changi Road and Bukit Panjang Hawker Centre which are managed by NTUC Foodfare Pte Ltd, Hougang Ci Yuan Hawker Centre managed by Fei Siong Social Enterprise Ltd and Our Tampines Hub Hawker Centre managed by OTMH.

The feedback from both hawkers and patrons of these centres has been largely positive. The operators monitor the prices of basic food items at these hawker centres to prevent unreasonable price hikes. In addition, some operators have ensured that the hawkers offer at least a few affordable entry-level meals in their menu. For example, the stalls at the centres in Ci Yuan and Our Tampines Hub need to have at least two dishes priced at $2.80 each or below. The operators also organise events at these hawker centres to further enhance the vibrancy of the centres.

To help hawkers address any manpower constraints they may face and manage manpower costs, the operators have implemented some innovative productivity measures. For example, the operator at Ci Yuan Hawker Centre has implemented a self-payment kiosk at all stalls, allowing the hawkers to focus on taking orders and cooking. Similarly, at the hawker centre in Our Tampines Hub, the operator has introduced a cashless payment system for the stalls. The operators at Bukit Panjang, Ci Yuan and Our Tampines Hub hawker centres have also introduced centralised dishwashing to reduce the hawkers' need for manpower for dishwashing. Besides improving the hawkers' productivity, centralised dishwashing can also ensure a more hygienic environment for patrons. Some operators have also offered the purchasing of ingredients in bulk to help hawkers reduce the cost of raw materials.

We have also seen encouraging initiatives to attract new entrants to the hawker trade. For example, the operator at Hougang Ci Yuan Hawker Centre has put in place an Entrepreneurship Programme. The new hawkers are given on-the-job training to gain skills and knowledge that can help them in operating hawker stalls. Thus far, 16 hawkers have benefitted from this Programme.

Given the encouraging outcomes observed in these pilots, we have recently announced an extension of the alternative management model to other hawker centres, with the appointment of NTUC Foodfare Co-Operative Limited, or NFC, to manage a group of new and existing hawker centres. Placing the management of a group of hawker centres under a single operator will enable the operator to derive economies of scale and have greater flexibility and space to experiment with new ideas and processes to further improve the vibrancy and operational efficiency of the hawker centres for the benefit of both hawkers and patrons.

Hawkers can be assured that there will be no change to the way rents are determined when the operator takes over the management of the existing centres. Subsidised stall-holders will continue to pay subsidised rents while non-subsidised stall-holders will continue to pay the prevailing market rents as assessed by professional valuers. The National Environment Agency (NEA) will work with the operator to explore ways to increase the vibrancy of the centres to enhance the business there and improve the patrons' dining experience.

I would like to assure the Member that regardless of the management model or the operator managing our hawker centres, my Ministry will ensure that hawker centres will continue to serve the fundamental objective of providing hygienic and affordable food while at the same time allowing the hawkers to make a decent livelihood.

Mr Liang Eng Hwa (Holland-Bukit Timah): Thank you, Mdm Speaker. I must say that the resumption in the building of new hawker centres is probably the best decision that MEWR has made, in my view, and my constituency is the direct beneficiary. I also support NEA's approach to try out the new model to finesse the way our hawker centres are run.

Can I ask the Senior Minister of State whether there are good learning points since we implemented the not-for-profit model? Has it improved the attractiveness of the hawker professional and lower the barrier for entry for aspiring hawkers?

I understand from stallholders from the Bukit Panjang new market that their new monthly conservancy charges are about almost $2,000. I would like to ask the Senior Minister of State why are there no benefits of scale, since there is centralised dishwashing and so on, and can this charge be lowered?

Dr Amy Khor Lean Suan:Let me share that for the new centres that have been operated under the alternative management model, for instance, Ci Yuan Hawker Centre at Hougang and Our Tampines Hub (OTH) hawker centre which has just opened recently, the socially-conscious operators have in their tender proposals, proposed an entrepreneurship programme to allow new hawkers to enter the trade, to support and facilitate their entry. As I have noted earlier, in Ci Yuan Hawker Centre, they have an entrepreneurship programme where some 16 new hawkers have benefited. They trained these hawkers, and provided them the stalls and some initial setting-up costs to operate these stalls. In OTH, they also have a Train-and-Place entrepreneurship programme where new hawkers train with veteran hawkers for about three months, and then they operate the stalls at OTH.

These have helped to lower the entry barriers for aspiring hawkers, whether they are young hawkers or people looking to enter the trade. Between Ci Yuan and OTH, we have new hawkers who were formerly an engineer, an accountant, real estate agent and recently, at Chinatown Complex Food Centre, I met a former Deputy Superintendent (DSP) who has become a hawker. She has been selling herbal buk kut teh there for more than a month or so. Schemes like these would help.

With regard to the conservancy fees that the Member referred to, in effect, at Bukit Panjang Hawker Centre, this is not just one component, this $1,600-odd. It comprises three components: firstly, it is service and conservancy fees for general cleaning, routine maintenance and utilities of the common area; there is a second component which is table cleaning fees; and the third component is centralised dishwashing fees. All these fees are market-determined and paid directly to the contractors. For centralised dishwashing, it is to help the hawkers to address manpower constraints and challenges, as well as to manage manpower costs and improve productivity. With centralised dishwashing, what it means is that the hawkers will save on the cost of employing someone to wash the dishes.

In one of my visits to a hawker centre at Whampoa which does not have a centralised dishwashing programme at the moment, one of the hawkers has purchased his own dishwashing equipment and that helped him to address his difficulty of getting someone to wash the dishes, and saved nearly the equivalent of one full-time manpower cost. That would definitely offset the fees paid for centralised dishwashing.