NEA defends operators: None of them has raised rental or operating costs

Recently, food guru KF Seetoh from Makansutra published a series of blogs highlighting the dire situation those hawkers operating under the Social Enterprise Hawker Centre (SEHC) operators are in.

In particular, he published an open letter to Senior Minister of State Dr Amy Khor last Tuesday (9 Oct) imploring her to preserve Singapore’s public hawker centres. In essence, Mr Seetoh is against the government appointing 3rd-parties, the so-called “social enterprise” operators, to run publicly funded hawker centres.

In his letter, Mr Seetoh also shared many unfair commercial practices adopted by SEHC operators against hawkers, making it hard for hawkers to survive.

In an interview with ST today (‘Teething problems with new hawker centre model‘, 14 Oct), NEA told ST with regard to letting 3rd-party operators running hawker centres, “It is still at its early stage, and we should give it time to evolve.”

NEA added that it “monitors” the operators closely. For instance, the operators are not allowed to vary the charges to hawkers at any time during the tenancy term, it said.

Defending the SEHC operators, NEA said, “None of the operators has raised the rental or operating costs, including service charges that they had said they will charge the tenants at the start of the tenancy.”

NEA is currently run by a former SAF general – BG (NS) Tan Meng Dui.

NEA: Terms on premature termination in line with standard industry practice

With regard to some of the unfair tenancy termination clauses in the agreement signed between Koufu’s subsidiary and hawkers, as highlighted in a recent Mr Seetoh’s blog, NEA said,”We note that the terms on premature termination are in line with standard industry practice.”

“Notwithstanding (this), we note Hawker Management’s (Koufu’s subsidiary) clarification that in practice, it exercises compassion and flexibility on a case-by-case basis, including not charging rents for the balance of the tenure in the event of premature termination.”

The agreement from Koufu’s subsidiary mandates that the hawker would need to continue to pay for the monthly stall rental until another suitable hawker is found for replacement, should a hawker decides to quit his stall half-way. If no hawker deemed suitable by the operator is found, the hawker who quits his stall would need to pay the monthly rental till the end of the tenancy term.

This so-called “standard industry practice” surfaced after a hawker selling noodles at Koufu’s subsidiary told Mr Seetoh about his plight. After a year of running losses, the hawker decided to quit and give up their $4k a month stall as they could not sustain the business.

“To my horror, they are made to pay up the remaining years and months of rent and fees left in their contract, or till another tenant is found,” Mr Seetoh wrote.

Since then, the hawker has moved out and started running his stall at a coffeeshop. “They now have to pay up the monthly ‘penalty’ fees in the SEHC and also for rents (at) their new stall,” Mr Seetoh highlighted.

As this particular hawker is still paying his monthly ‘penalty’ fees to Koufu’s subsidiary, it could only mean that the hawker, for unknown reasons, did not fall under Koufu management’s criteria for fee waiver during its “case-by-case” basis of determination process.