Is it true that Leong Mun Wai made bogus allegations against the PAP Government?

Government, PPP, Pay, Terminate, Spend, SportHubs

The Government did not spend a single cent to build Sports Hub.

It is only right and fair that when the Government decides to terminate the Private Public Partnership (PPP) with SportsHub Pte Ltd, they should pay for the capital expenditure incurred by the PPP in the construction of Sports Hub. Anything less would be daylight robbery. 

PSP Leong Mun Wai sought to dent the Government’s reputation with false allegation of profligate spending in his adjournment motion in which he spoke about SPHL and SPH Media Trust. 

In the case of SPHL, he fabricated the argument that the Government was paying SPHL for brand name when no such payment exists. 

He brought up his 30 years’ experience as a businessman to lend ‘credence’ to his argument and threw up many bogus statistics to confuse.

Let’s take a look and understand what’s really involved in this termination of the PPP with SportsHub Pte Ltd. 

If there is no termination of the PPP

If the PPP were to run until it ends in 2035, under the terms of agreement, the government would pay SPHL (SportsHub Pte Ltd) a sum of $193.7 million a year for the full operating expenditure, including daily operations, maintenance, security, and lifecycle costs for the entire project term.

This works out to approximately $2.32 billion from now through to 2035. 

That is to say, if the PPP is not terminated, the Government’s financial obligation to the PPP is $2.32 billion. 

If the PPP is terminated

If the PPP is terminated, the Government would pay the PPP $1.5 billion. 

Most of it is made up of the capital expenditure (around $1.2 b) which the Government would have incurred if they had built the project themselves. 

The Government did not spend a single cent to build SportsHub. They can’t possibly take back a billion-dollar project and just wave ‘goodbye’ to their private partners, can they? That would be daylight robbery and what would it say of their reputation? 

The estimated cost (from taking over the project through to 2035) to the government for operating Sports Hub themselves , amount to around $800 million. 

Add this to the $1.5  billion to be paid to the PPP for terminating the partnership, the total costs to the Government is approximately $2.3 billion. 

This is comparable to the amount the Government would incur if the PPP is not terminated.
 
As Second Minister for Finance Indranee Rajah said, “In other words, the entire transaction is 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥𝐥𝐲 𝐧𝐞𝐮𝐭𝐫𝐚𝐥, because we are not paying SHPL more than what we would otherwise committed to under the PPP model.”
 
The entire transaction is financially neutral even after factoring in operating costs for the government to take over SportsHub.
 
Leong Mun Wai has chosen to ignore detailed explanations, and instead makes a completely baseless and false claim that the termination sum can be lower.

Voters’ responsibility

Leaders, whether elected or nominated, must speak with their conscience and not lie to voters without compunction. And voters have a responsibility to see that leaders uphold the sacred office of Parliament and not allow Parliamentary debates to turn into a comedy or entertainment show.

Singapore is one of the few countries left in the world with a triple-A credit by major credit rating agencies in the world. This is testament to their prudence and good fiscal policies. 

It is indeed ironical that Leong Mun Wai should accuse the Government of being profligate in their spending when he was the one who had asked for more spending from reserves and the NIRC

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