Internal review by People's Association uncovers further lapses following AGO report

[SINGAPORE] The People's Association (PA) could have overpaid contractors by an estimated S$60,000 for two construction projects, it found during an internal review.

This is on top of the estimated S$2 million it may have overpaid for building materials for Our Tampines Hub (OTH), which the Auditor-General's Office (AGO) flagged in its annual audit of public agencies in Singapore.

Minister for Culture, Community and Youth Edwin Tong gave an update Monday on remedial steps and internal investigations by PA following the AGO's findings on two large development projects that it manages - OTH and Heartbeat@Bedok (HBB).

He told the House that the government requires agencies to adopt full price fluctuation adjustment for developments with a contract value of more than S$5 million. This refers to payment adjustments to account for the changing prices of key raw materials like concrete and steel reinforcement over the course of the project.

Responding to Leader of the Opposition Pritam Singh (Aljunied GRC), Mr Tong said the PA reviewed 31 public construction developments after the AGO report, which revealed that two projects had erroneously adopted a 70 per cent cap on price fluctuation adjustments in the past seven years - similar to OTH's main construction contract.

PA has since ensured that the provision in all such standard construction contracts is clear and fixed, he said, to ensure greater clarity and compliance on how price fluctuation adjustments should be made.

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Mr Singh, Foo Mee Har (West Coast GRC) and Sitoh Yih Pin (Potong Pasir) also asked about lapses related to contract variations during the construction of OTH and HBB, as well as irregularities which arose during the operations and facilities maintenance phase at OTH.

Contract variations are mutually agreed changes to the terms of contracts that are already in effect.

Mr Tong also said the PA has looked into all 252 cases of lapses related to contract variations for OTH flagged by the AGO, and is doing a full review of the remaining contract variations for both OTH and HBB beyond those audited by the AGO. "PA is doing so to ensure that the other contract variations were carried out with appropriate approvals and proper documentation, and if not, then to take the appropriate remedial action," he said.

Replying to Mr Singh, Mr Tong said the PA will give an update once it completes its review.

On the irregularities in documents related to payments and lapses in managing contracts at OTH, Mr Tong said an internal investigation confirmed the AGO's findings.

A task force has been set up to strengthen existing processes and improve oversight of contractors and managing agents, he added.

THE STRAITS TIMES