NCMP Leong spars with SPS Rahayu over SLA’s black & white bungalows management

SINGAPORE: Mr Leong Mun Wai, a Non-constituency Member of Parliament from the Progress Singapore Party (PSP) called for enhanced transparency and accountability in the management of state lands by the Singapore Land Authority (SLA).

During the debate on the Ministry of Law (MinLaw) budget on Friday (1 March), Rahayu Mahzam, Senior Parliamentary Secretary (SPS) for Law reiterated the government’s commitment to a balanced approach, considering both heritage preservation and redevelopment in SLA’s operations.

Mr Leong sought further clarification from the minister by requesting the total rental income and maintenance costs for Black and White Bungalows (or heritage bungalows), aiming to determine whether Singapore possesses significant underutilized assets.

Instead of directly addressing Mr Leong’s inquiries, SPS Rahayu underscored the importance of SLA debunking any assertions of mismanagement.

Mr Leong further clarified that his intent was not to accuse SLA of mismanagement but to raise questions and seek answers.

“We were just raising questions and we want answers to the questions. So a lot of things have been said, but there are still many questions that are unanswered.”

“If you can provide the questions then you will be able to erase the doubts in the minds of many Singaporeans.”

Leong Mun Wai stresses greater transparency and accountability over how SLA is managing state lands

Participating in the MinLaw budget debate, Mr Leong scrutinized the SLA management of state lands, particularly emphasizing the handling of black and white bungalows.

He stressed the importance of SLA judiciously managing state assets, especially in cases where lands are rented for less than 10 years.

Expressing frustration, Mr Leong highlighted the lack of comprehensive information available to the public regarding the management of state lands, including details on total maintenance costs and the duration of property vacancies.

Citing the example of 26 Ridout Road, which rented by Law Minister K Shanmugam himself, Mr Leong questioned why SLA and its managing agents allowed properties, like this one, to remain vacant and deteriorate for extended periods.

“While the government has been very careful to recover the market value of land even if it is for public housing, it seems less concerned about the fact that state properties can be vacant not generating any income, and falling into disrepair for years even if they are in prime and prestigious areas. ”

Mr Leong further raised concerns about the negative impact on rental values of black and white bungalows due to lack of modern amenities and urged SLA to conduct a cost-benefit analysis to determine if higher rents would justify retrofitting these properties with amenities like air conditioning.

He also raised concerns about the total land area occupied by the 2600 state properties suggested that SLA should explore better economic uses for large land parcels, and advocated reviewing whether developing these land parcels in line with the URA Master Plan and investing the land proceeds in past reserves would make better economic sense.

“There needs to be greater transparency and accountability over how SLA is managing state lands, ” said Mr Leong.

“This house has a responsibility to ensure this: state properties like black and white bungalows should generate good value for the taxpayer. Under no circumstances should they be allowed to be underutilized fall in disrepair and be vacant for years.”

SLA’s approach to heritage bungalow management

In her response, SPS Rahayu Mahzam addressed several of Mr Leong’s concerns by pointing out that many of his questions had already been answered in Parliament last year.

She provided examples, including the public sharing of occupancy rates for residential heritage bungalows from January 2017 to January 2023 and the annual publication of the overall occupancy rate for usable state properties.

In FY 2022, the occupancy rate for all usable state properties was reported to be 99%, information publicly available in the Ministry of Finance’s Budget book.

SPS Rahayu reiterated that occupancy rates of state properties generally move in tandem with changes in market conditions, acknowledging that when market conditions are weak and demand for leasing is low, occupancy rates may be lower.

On heritage bungalow management, she shared SLA’s approach, which involves making basic additions to ensure that properties are in reasonably good condition for safe residence.

She said incoming tenants are expected to retrofit and enhance the property based on their preferences and that SLA will install modern amenities and facilities for selected properties where circumstances make it advantageous to do so.

She also cautioned against directly comparing SLA’s portfolio with that of a typical private commercial landlord and clarified that SLA manages heritage bungalows marked for conservation, requiring a balance between protecting heritage properties and redevelopment.

“SLA diversifies the management of its portfolio to include private sector managing agents as their professional organizations, experienced in managing properties in the public and private markets, ” she said.

“Today, overall, the total revenue collected by SLA from state property significantly exists the total maintenance cost incurred.”

LMW sought clarification on total maintenance costs versus rental income for heritage bungalows

Following SPS Rahayu’s response, Mr Leong sought further clarification on the total maintenance cost compared to the total rental income for the heritage bungalows.

He also asked about whether there are studies or overall strategies to review and manage the heritage bungalows for greater returns on the need for preservation.

Contrary to directly addressing the figures requested by Mr Leong, SPS Rahayu reiterated SLA’s commitment to preventing overspending and waste. She emphasized their efforts in efficient portfolio management.

In response to Mr Leong’s perception of insufficient publicity, SPS Rahayu provided an overview of the extensive efforts detailed in her speech. She linked these efforts to SLA’s overall strategy, emphasizing the comprehensive approach they undertake in managing state assets.

Mr Leong persistent on unanswered questions

Mr Leong, persistent in getting answers from the minister, while acknowledging extensive clarification has been made since the ministerial statement on Ridout Road last year, he asserted that this doesn’t mean all Singaporeans’ questions have been answered.

He stated that there are still questions unanswered, such as the total income derived, total maintenance costs spent on managing black and white bungalows, and the total land area occupied by these properties.

“These are questions as Singaporeans like to know and it will if enough information is being given then we can assess better, whether we have a big underutilized asset here or not.”

In response, SPS Rahayu calling Mr Leong “preoccupied with the details” and has repeatedly asked these questions.

She emphasized the larger concern about an assertion of mismanagement by SLA, suggesting that there is a need to debunk this assertion.

“The truth is we’ve given a lot of other facts to show that the market really dictates some points like the occupancy rate, vacancy rates,  and all these are things that we have already highlighted.”

“I think could there is a distinction between just vulgar curiosity and actually what is the what is some the assertions that are being made,” she said and reiterated concerns about the repeated claim that SLA has not been looking at this matter thoroughly, emphasizing the importance of addressing this perception.

This prompted Mr Leong to clarify that he didn’t start by stating that SLA mismanaged the properties in his speech.

“We were just raising questions and we want answers to the questions. So a lot of things have been said, but there are still many questions that are unanswered,” he said, asserting that the objective is to erase doubts in the minds of many Singaporeans by providing answers to these questions.

In response, SPS recognised that things constantly evolve, suggesting that there may be developments and updates in the future.

She expressed a readiness to provide information over time to address concerns that both Singaporeans and Mr Leong may have.