AHPETC Statement Inaccurate and Misleading about DPM Tharman's Comments on Sinking Funds

1. Arising from the parliamentary debate on 17 Aug 2015, AHPETC released a press statement highlighting that

(a) The Deputy Prime Minister and Minister for Finance Mr Tharman Shanmugaratnam had “claimed that even if the operating grant withheld by the Ministry of National Development (MND) for FY14/15 is paid in its entirety into AHPETC’s Sinking Funds, it would not be sufficient to comply with AHPETC’s sinking fund obligations for the financial year”;

(b) AHPETC had made sinking fund contributions of $13.24m for FY14/15; and

(c) AHPETC would more than fulfil its obligations to transfer Sinking Funds for FY14/15 if MND accedes to its request to deposit the entire grant of $7.2m into AHPETC’s Sinking Fund.

2. AHPETC has simply misquoted DPM Tharman, and attributed to him statements he did not make. DPM Tharman did not make any statement on whether AHPETC could fulfil its obligations if the MND grant “is paid in entirety into AHPETC’s Sinking Funds”.  Further, he did not refer to AHPETC’s sinking fund obligations for FY14/15, i.e. ending 31 Mar 2015^[1].

3. By focusing only on FY14/15, AHPETC has not provided the full picture. On top of the amount still outstanding from FY14/15, AHPETC also owes Sinking Fund $4.5m which was overdue since 31 Jul 2015. Another $4.5m will be due each quarter by Oct 2015, Jan 2016 and Apr 2016 respectively, totalling $18m.

4. Furthermore, AHPETC tries to blame MND for its failure to make Sinking Fund transfers, but the High Court Judge noted that it was AHPETC who did not accept MND’s offer of grants in FY14/15 and “[i]f AHPETC has anyone to blame for failing to make the transfers on time, it was itself”.

5. MND is prepared to disburse the S&CC grants in full to AHPETC and to accede to its unusual request for the full sums to be paid into its Sinking Fund account, rather than be split between its Sinking Fund and Operating Fund accounts in line with the TCs Act and Financial Rules. MND has asked AHPETC for its latest cash flow position, to assess the impact of AHPETC’s proposal on its cash flow position and its ability to sustain essential services to residents. MND made the offer of a half grant on 7 Oct 2014 and the full grant on 2 May, 15 Jun, and 6 Aug 2015. But MND never heard back from AHPETC.

Issued by Ministry of Finance and Ministry of National Development
17 August 2015

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^[1] DPM Tharman had in his response to Ms Sylvia Lim in Parliament said “Even if you take into account MND’s grant which MND is willing to discuss with you, and you have part of the MND grant that has to properly go into the sinking fund and another part which goes into the operating fund, the amount that is owed to sinking fund from the operating fund will not be solved by MND’s grant. That is a more fundamental problem.”