SINGAPORE AIRPORT HOTEL LTD. (Monthly rent)

Mr John Ede asked the Minister for Communications and Works what is the monthly rent payable by the Singapore Airport Hotel Ltd, for the use of the Paya Lebar Airport restaurant premises; whether there are any arrears of rent payable by the tenants and what is the amount.

Mr Francis Thomas: The concession under which the Singapore Hotel Ltd, operated ended on 30th April this year. Their rent during the period of their concession was $2,833 per month until July 1957 and thereafter $2,874 per month. When the concession terminated, the arrears of rent totalled $51,834.16.

Mr John Ede: Will the Minister state how these arrears were allowed to accumulate and whether they are recoverable in full?

Mr Francis Thomas: With regard to their recoverability, the company has gone into voluntary liquidation and what this will produce towards arrears is not yet clear.

With regard to how they were allowed to accumulate, the hon. Member will appreciate that the Airport Hotel is different in its nature from the ordinary run of hotels. It is not for guests coming to stay at the place in the normal way; the Airport Hotel is catering for the passengers who are passing through. Consequently, it is closely tied up with the airline operators and it cannot therefore be allowed to close even for a single day. In these circumstances, and bearing in mind that the concessionaire had been successfully operating at the Kallang Airport since 1937, it was thought desirable to give every opportunity of meeting liabilities and by so doing to avoid what might have been urgent difficulties in finding a replacement.

Mr John Ede: Does the Minister not feel that that reply is thoroughly unsatisfactory? Will he state whether the Singapore taxpayer has to pay for Government's incompetence in not collecting arrears or has the Minister other remedies?

Mr Francis Thomas: I cannot ask a question in reply to the question. I am not quite sure what the hon. Member means by the Government paying. The Government has suffered a loss but there is no charge that the Government has to meet. The bill has not yet been collected and I cannot say how far it will be collected.

Mr Lee Kuan Yew: Sir, is the Minister aware that this concessionaire, apart from the legal person in the Singapore Airport Hotel Ltd. - the person behind it - has since 1937 accumulated a fairly vast fortune as a result of work in the old Airport Hotel at the Kallang Airport? Should he not take steps to see that fortunes are not salted away while revenue is owing to the Government?

Mr Francis Thomas: I am aware of the other interests of the proprietors of the Singapore Airport Hotel but I cannot answer for what the law provides on the question of recovering the arrears. That is in the hands of the liquidator and is being dealt with for the Government by the Treasury. I have no doubt that whatever can and should be collected will be collected but it is not for me at this stage to describe the procedure that will have to be followed.

Mr John Ede: Mr Speaker, Sir, will the Minister state whether it was the fault of the Treasury that money was not collected month by month or the fault of his Ministry?

Mr Francis Thomas: I had better perhaps put the hon. Member in the picture as to the general structure of the control and management of such concessions. The day-to-day control and management are exercised by the Airport manager who until recently had an assistant manager to help him. The contracts such as the concessions for the Singapore Hotel are negotiated and completed by the Commissioner of Lands who is the Government's agent for this matter. The accounts are subject to audit scrutiny and the Treasury has, of course, an overall interest in the financial aspects of these contracts. The system is satisfactory, I think, in so far as it distributes responsibility and ensures that proper scrutiny is made. It is perhaps less satisfactory from the point of view of commercial operation as compared with the ordinary run of Government business.

Mr Lee Kuan Yew: Sir, will the Minister tell us whether any Minister in the Government was approached by the proprietor of the Singapore Airport Hotel Ltd. with a view to writing off the arrears of rent?

Mr Francis Thomas: Certainly nobody has approached me with such a request and I should imagine that it is inconceivable that anybody would be approached with it.

Mr John Ede: Does the Minister accept full responsibility for this deplorable state of affairs?

Mr Francis Thomas: Certainly I do, Sir, I accept full responsibility for everything that falls within my Ministry and for the actions of all officers within my Ministry.

Mr Lee Choon Eng: Mr Speaker, Sir, on the termination of this concession, can the Minister tell us how the present premises are let out since the Singapore Airport Hotel Ltd. has gone into liquidation?

Mr Francis Thomas: A new concession has been let out which separates the previous concession into two parts: the restaurant and bar form one part and what I think we can call the coffee room on the ground floor is a separate concession now. Up-to-date the concessionaires are both paying their rent punctually.

Mr Lee Choon Eng: Mr Speaker, Sir, why is it then that a public tender is not called for instead of giving it out on a concessional contract?

Mr Speaker: It seems to be a different question but if the Minister wishes to answer, he may do so.

Mr Francis Thomas: I think it is a different matter, Sir.