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Social enterprises charges hawkers $4K rental plus $600 ‘food inspection’ fee with ‘Ah Long’ style of debt recovery

Famous food guru KF Seetoh, who is the founder of Makansutra, took issues with some of the social enterprises supposedly meant to be running hawker centres for social reasons.

They are supposed to manage hawker centres with the purpose to keep dishes affordable for the public. They are also supposed to help hawkers by buying food ingredients in bulk to lower food cost. Furthermore, they would help hawkers with subsidized monthly rents too.

Social enterprises running hawker centres like commercial food courts

On his blog published on Tue (28 Aug), Mr Seetoh revealed that he had a chance to review the contract agreements of hawkers operating at some of the new Social Enterprise Hawker Centres (SEHC).

He accused some of the companies registered as a social enterprise entity running like commercial food courts.

"I heard whispers and murmurs in the market regarding the operational practices of some private companies, registered as a social enterprise organisation, running the newly government built hawker centres like commercial food courts," he said. "They operate the new hawker centres like a hard core commercial Food Court management system. Hence, I am seeing some issues that raises some concerns."

The contract agreements shown to him by the hawkers reveal that they are paying on average $4000 a month on stall rentals.

Mr Seetoh fumed, "These hawkers in the new hawker centres pay in total (with a laundry list of extra services and charges), an average of $4000, more than what it cost the highest bidder in Maxwell Hawker Centre - arguably the most popular hawker centre in Singapore - where it hovers between two to three thousand dollars a month in total."

"Maxwell, sited in prime town area, sees breakfast, lunch, dinner and weekend crowds, unlike these far flung residential area where the SEHC are sited. They pray for a weekday crowd (many residents in those areas go to work and may have dinner by the time they come home)," he added.

"They (hawkers) rely on weekend buzz but it is very fragile, what with the high operation, rent and manpower costs."

And some of the hawkers get a stall pre-outfitted with the relevant equipment with govt grants but they pay similar rents and charges as the rest. In other words, it is the social enterprise which benefited, not the hawkers, from the govt equipment subsidies.

Some of the hawkers said that they would be quitting at the earliest chance as they know even private coffeeshop stalls in better locations offer cheaper rents with less stringent rules.

One hawker told Mr Seetoh, "Social enterprise hawker centres are not sustainable. Just you wait, a lot of such hawkers are calling it quits soon."

Hidden charges

Then there are a number of hidden charges written inside the contract agreements.

"The shocking facts, (just some) seen in some of the contracts, include compulsory payments for 'coin changing service'," said Mr Seetoh.

Other charges include a Gross Turnover Profit percentage, charges for crockery washing, collection and return and even a "brazen clause" that hawkers need to a "consultant" $600 a month to have them spot check their food quality and operation.

The best part is that if the hawker fails to pay the $600 "consulting fee" in time, he will be charged 12% interest or "such higher rate as may be determined from time to time by the Consultant in respect of any outstanding amount payable" - aka "Ah Long" style of debt recovery:

"They also have monetary penalties like in a food court model for closures and they are expected to open 8-12 hours a day (minus preparation time). The law only allows people to work up to 12 hours a day," Mr Seetoh further revealed.

"Despite these startling high cost of operation and management fees, they (hawkers) are expected to offer at least one dish at below $3 in the menu."

Mr Seetoh also went on to ask, "How are the true intents behind these so-called SEHC being delivered. Did they misinterpret the values and goals listed, or is there a lack of vision and compassion in execution. Because, as it is, the existing NEA run public hawker centres are way more free market and 'social enterprise' in practice than these fancy new SEHC."

Finally, he urged the govt, "So, before we shout to Unesco about how our hawker centres are also humbling entry level business opportunities for the poorer folks in our midst out to offer cheaper meals to the public and bond them, I urge the minds at the top to rethink this very worthwhile culture of Singapore and to keep it relevant and evolve organically for the next generation. I think the original noble intents were lost in translation in management, let’s get this back on track please."