Channel NewsAsia
Updated: 01/03/2013 03:42 | By Channel NewsAsia

No basis to suggest AIM transaction was improper, says Teo Ho Pin

No basis to suggest AIM transaction was improper, says Teo Ho Pin


No basis to suggest AIM transaction was improper, says Teo Ho Pin

SINGAPORE: There is no basis to suggest that the transaction to provide computer services to the PAP Town Councils by the company, Action Information Management Pte Ltd (AIM), was improper or disadvantageous to the town councils.

Coordinating Chairman of the PAP—run town councils, Dr Teo Ho Pin made this point in his latest rebuttal to comments made by Ms Sylvia Lim, the Chairman of the Aljunied—Hougang Town Council.

Ms Lim had questioned why the computing and financial system developed by PAP—managed town councils was sold off to a third party.

Dr Teo explained that the 14 PAP Town Councils work closely with one another to derive economies of scale for the benefit of their residents.

In this case, the town councils wanted to consolidate their software rights in a single party which would manage them on their behalf, as recommended by Deloitte and Touche Enterprise Risk Services.

This is because having each town council hold Intellectual Property rights to the software was cumbersome and inefficient.

This single entity would then be able to undertake negotiations with the IT vendor, facilitate any software upgrading or maintenance, and cope with any constituency or personnel changes in the town councils.

So when the tender was advertised on 30 June 2010, five companies collected the tender documents.

Only AIM submitted a bid.

Mr Chandra Das, Chairman of Action Information Management Pte Ltd, said: "AIM participated in the tender not knowing other companies would not do so. The sums involved in the transactions are modest. But as a PAP company, we wanted to be helpful to the PAP Town Councils. So we were ready to take on the task and submitted the proposals to help the PAP Town Councils achieve their goals."

Dr Teo said the town councils wanted to sell the Intellectual Property rights in the existing software because it had a limited value and was depreciating quickly.

This was also confirmed by Deloitte and Touche.

AIM was willing to purchase the existing software IP for $140,000 and lease it back at $785 per month from November 2010 to October 2011.

The existing contract ended in October 2010.

This yielded savings of about $8,000 to the town councils from the disposal of the intellectual property in the existing software.

After October 2011, the town councils would be allowed to use the existing software without any additional lease payments to AIM until the new software was developed.

AIM was also willing to undertake the risks of getting an extension of the existing contract with no increase in rates and this was the most important consideration for the town councils as it protected them from an increase in fees.

Also, Dr Teo said AIM backed by the PAP would honour its commitments.

The tender was awarded to AIM and under it, the town councils could terminate the arrangements by giving one month’s notice to AIM.

AIM could also do so likewise by giving one month’s notice in the event of material changes to the membership of a town council or to the scope and duties like changes to its boundaries.

Dr Teo said this is reasonable as the contractor has agreed to provide services on the basis of the existing town council and town boundaries and priced this assumption into the tender.

He said following the expiry of the initial lease arrangement for the software from AIM on 31 October 2011, no further lease payments for the software were made to AIM.

During the period of its contract extension from November 2011 to April 2013, the management fee payable to AIM for the whole suite of services it provided was $33,150, apart from what was payable to NCS for maintenance.

Dr Teo said in the end, each town council paid slightly more than $140 per month for AIM to ensure continuity of the existing system, secure the maintenance of the system at no increased costs and identify options for a new system to which the town councils could migrate.

Click

here

for the full statement by Dr Teo Ho Pin

— CNA/de

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