PA review uncovers more lapses after Auditor-General’s report
The People's Association (PA) could have overpaid contractors by an estimated $60,000 for two construction projects, it found during an internal review.
This is on top of the estimated $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.
Minister for Culture, Community and Youth Edwin Tong gave an update in Parliament yesterday on remedial steps and internal investigations by PA following the AGO's findings on two large development projects the association 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 $5 million. This refers to payment adjustments to account for the changing prices of key raw materials such as concrete and steel reinforcement over the course of the project.
Responding to Leader of the Opposition Pritam Singh (Aljunied GRC), Mr Tong said 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. He did not name the two projects.
PA has since ensured 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.
Mr Singh, Ms Foo Mee Har (West Coast GRC) and Mr Sitoh Yih Pin (Potong Pasir) also asked about lapses related to contract variations during the construction of OTH and HBB and irregularities that 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 said 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.
He said PA will give an update once it completes its review.
A task force has also been set up to strengthen existing processes and improve oversight of contractors and managing agents, he added.
PA has also appointed an external consultant from EY, formerly known as Ernst & Young, to examine its governance system and oversight functions, and will share the findings with the public when they are ready, Mr Tong said.