The Jurong West Hawker Centre will likely be closed after the exit of Hawker Management (HM) until the second half of 2021, said the National Environment Agency (NEA) is a statement on Tuesday (5 May).
The NEA noted that the contract with HM, a socially conscious enterprise under Koufu Pte Ltd, to manage JWHC will end on 6 August 2020 and will not be renewed.
In a statement on its website, the Agency stated that HM will continue to manage the hawker centre and it will be working with the company to assist stallholders who want to continue their trade by relocating to available stalls at other hawkers centres and markets managed by NEA or coffee shops and food courts run by Koufu.
HM will be waiving stall rentals from June to the end of its contract in August. This is on top of the three-month rental waiver announced by the Government in the Resilience Budget, meaning that stall owners will operate rent free until August.
Additionally, NEA said it will work closely with relevant agencies to provide financial assistance to stall owners who want to exit the trade altogether and take on another job.
In a media statement, HM noted that it’s “ideal performance standards” were not met despite its efforts.
The company said, “Following HM’s (Hawker Management) appointment as the operator of JWHC in 2017, HM had seen to be putting in the necessary resources to bring vibrancy to Jurong West Hawker Centre and support the local hawker trade.”
“Koufu, as a public listed company, has an obligation to safeguard our shareholders’ interests, therefore we have made the difficult decision to exit upon expiry of the contract in August 2020 to focus efforts on other aspects of our business.”
HM added that it is still committed to managing JWHC until the end of its contract term.
The NEA said that it will be requesting for proposals to seek new ideas from operators to enhance the JWHC’s operations and offerings to better meet the needs of residents.
“As part of the RFP, NEA will conduct public consultations to gather ideas and suggestions from the community, work with stakeholders and potentially conduct renovation works to enhance the centre’s layout,” it added.
Once JWHC is ready to be reopened, existing stallholders will be offered the opportunity to return.
JWHC has been fraught with issues over the past few years
Though the closure of JWHC from August 2020 to the second half of 2021 is shocking, this particular centre has been under the spotlight before when food guru KF Seetoh from Makansutra wrote an open letter to Senior Minister of State Dr Amy Khor in October 2018, expressing his disagreement against the Government appointing a third party to run publicly funded hawker centres. He is not for the Social Enterprice Hawker Centre (SEHC) model NEA adopted back in 2015.
Mr Seetoh, in his letter, shared some examples of unfair practices adopted by some of these SEHC operators against the hawkers. One example is the agreement between a stall holder and centre operator that the operator would have the rights to penalise a hawker if they decide to quit half-way through the contract, forcing them to fork out rentals and fees for the remaining months or until a new tenant is found. Though a new tenant is subjected to the approval of the operator.
The agreement also has an all-encompassing clause stating that the operator is entitled to “at any time” and “from time to time” increase stall rentals and ancillary charges.
In August the same year, Mr Seetoh also highlighted on his website the extra costs that hawkers are made to pay each month, on top of rental, under this new model. This includes fees and charges for dish washing and coin exchange services, as well as monthly cleanliness inspections.
HM had, in October 2018, also implemented a tray-return initiative where hawkers had to pay their customers 20 cents for returning food trays. The money for that comes out of the stalls’ profits – up to hundreds of dollar a month. This led to an outcry from stall owners.
Following that, in November 2018, Senior Minister of State for Environment and Water Resources Amy Khor said in Parliament that under the SEHC model, NEA will try to “leverage the experience of these operators in F&B and lease management in order to be able to put in place various initiatives and ideas to ensure and enhance the vibrancy of hawker centres”.
She added that the operators will bear the costs of such initiatives, an approach that manages and reduces the risk of profiteering.
“They are required under the terms of our tender to plough back at least 50 per cent of any operating surplus for the social benefits of the hawker centres,” said Dr Khor.
“At least 50 per cent must go back to social benefits. The other 50 per cent, of course, they can keep. But so far for our hawker centres, those that have already submitted their audited accounts, none of them have accumulated operating surplus,” she remarked.
Knowing this, it seems the pressure placed upon operators not to profit off of stall owners may make the running hawker centres for the NEA under the SEHC model just not worth it.