HAWKER CENTRE FOOD STALLS

HAWKER CENTRE FOOD STALLS:

(Market valuation method): 12.

Ms Sylvia Lim asked the Minister for the Environment and Water Resources (a) what factors are taken into account in the market valuation of hawker centre food stalls to justify hikes in rentals; and (b) how such hikes will impact the price of cooked food.

The Senior Parliamentary Secretary to the Minister for the Environment and Water Resources (Dr Amy Khor Lean Suan) (for the Minister for the Environment and Water Resources): Sir, the National Environment Agency (NEA) engages a professional valuer to assess the market rent for non-subsidised cooked food stalls in hawker centres. The market rentals for such stalls are generally lower than those in private food courts. This, together with subsidised stalls which still make up about half of the number of cooked food stalls in the hawker centres, helps keep cooked food prices affordable. Cooked food prices in hawker centres are also influenced by a number of factors, including the cost of utilities, raw materials, salaries, as well as market competition.

Ms Sylvia Lim: Supplementary questions for the Senior Parliamentary Secretary. I do not know whether the Senior Parliamentary Secretary is aware that there were hawkers who have this year received notices that their rentals would be doubled from $1,000 to $2,000 per month, and there has been feedback from them that they will not be able to cope with this increase.

Secondly, the questions that are being asked are: why the Government chooses to do so at such an economic situation that we have now? If there is a need to increase it, can you not make it more gradual and perhaps defer it to a time which is more favourable.

Thirdly, would the Senior Parliamentary Secretary agree that eventually the price of cooked food will go up in tandem with the rentals?

Dr Amy Khor Lean Suan: I would like to inform the Member that rental revision of these cooked food stalls does not necessarily imply rental increases. In fact, in the most recent rental revision exercise of about 150 stalls, between January and June this year, rentals of 49% of these stalls actually remained unchanged whilst another 18%, in fact, saw rental reduction. Furthermore, as part of the Government's efforts to help cushion the effects of the economic downturn, NEA is giving a 15% rental rebate for all stallholders paying market rental for a period of one year, from 1st January 2009 to 31st December 2009. With this rental rebate, the proportion of stalls that actually experience rental increase is 20%, and the median rental increase is brought down from some 20% to 11%.

With respect to the particular stall in question, we will need more details from the Member if she wishes to have a more specific and detailed explanation. But the quantum of increase really depends on why there was a rental revision. Was it due to the expiration of the lease or is it due to an assignment from, say, a subsidised stallholder to a non-subsidised stallholder, in which case the quantum would be higher? But all things being said, the market rentals of these stalls would, by and large, be much lower than those of food courts and coffeeshops.

I would also like to assure the Member that we are committed to helping residents access affordable food at hawker centres in a pleasant environment, and we do keep tabs on the food prices charged at hawker centres. As I have noted, the price of hawker food depends on a host of other factors, including cost of utilities, salaries, and so on. In fact, there are many stalls that do not actually raise the prices of their food even after rental revisions, say, due to upgrading. I can cite the Member a very good example at Yuhua Hawker Centre where you can still find nasi lemak, bak chor mee , etc, at $2 per plate.