Recently I read in Business Times that a Good Class Bungalow (GCB), which Su Baolin, one of the alleged money launderers, had been put back on the market at $120,000 a month. The property is located in Nassim Road and according to the description, “The hilltop five-bed, five-bath residence sits on 15,000 sq ft of land and features a swimming pool that snakes through most of the second floor.” Another GCB in Ewart Park, on 30,000 sq. ft. was rented out to Su Haijin, another of the alleged money launderers, for $100,000 a month while a GCB in Bishopsgate, sitting on 17,000 sq. feet, was leased in 2020 for $150,000 a month. The GCB in Nassim Road is only offered on a two-year lease with a two month security deposit required upfront.

As I predicted, the rental market for private GCBs has softened as a result of the publicity of the recent arrests which has dampened demand from China and other countries with massive capital flight. But even a child can see that there is a huge discrepancy between the rentals Ministers Shanmugam and Balakrishnan are paying for their enormous GCBs sitting on vast tracts of state land, where wags have joked that they probably need to call a Grab or use a golf cart to get from their front door to the external gate of the property. In case people have forgotten Shanmugam is paying $26,500 a month for his state mansion sitting on about 250,000 sq ft of land while Vivian Balakrishnan is paying a mere $20,000 a month for his on 131,000 sq ft. Both gentlemen have secured renewable 3 year leases for a maximum of 8 or 9 years. While the Singapore Land Authority has stated that these rents are reviewed at the time of renewal Shanmugam’s lease was renewed in 2021 at the same rent while Balakrishnan’s was renewed in 2022 with the rent increased by $1,000 to $20,000.

While the Government may issue POFMA Correction Notices for saying that the rents were below “market value”, and keep reiterating that SLA’s asking rents were set by independent professional valuers, as an economist I find it hard to believe that the public and private markets are so segmented that the elasticity of subsitution between them is zero.

The Ministers have been cleared by CPIB so I am not alleging corruption. Furthermore fellow Minister and football fan, Teo Chee Hean, whom Shanmugam told that he was signing a lease on Ridout Road, has cleared Shanmugam of any conflict of interest arising out of the fact that the latter, as Minister for Law, ultimately headed the agency responsible for letting state properties.

However even though there was no corruption and, according to the Government, no conflict of interest in the Minister renting a state propoerty from an agency he controls, because he recused himself from the process, there is no doubt that the Ministers must have been aware of the prices and rental yields for comparable properties in the private sector and knew they were getting the bargain of the century. Even the rental of a luxury condo apartment of 3-4000 sq feet in a prime area can cost as much as or even more than, Shanmugam and Balakrishnan are paying in rent.

Shanmugam also has admitted that he asked his senior civil servant to get him a list of SLA properties that were untenanted. In many countries this would be considered an unjustified use of public servants’ time which I don’t need to remind you is funded by the taxpayer. In the UK the Home Secretary, Suella Braverman, was alleged to have broken the Ministerial Code by asking her civil servants if they could arrange a private speed awareness course, instead of a public course that is the standard offer to those caught speeding as an alternative to getting points on their licence. Certainly claims of equal treatment ring hollow unless other potential renters of SLA managed properties are able to ring up the senior civil servant in MinLaw and get him to send them the same list.

While the Ministers did nothing wrong legally, their moral and ethical duty as public servants was and is clear. Instead of taking advantage of the poor management of state properties, which has clearly been tolerated for some time for reasons which are unclear, they, and in particular the Minister of Law Shanmugam, should have asked why there was this discrepancy and what they could do to rectify it. However the prudent stewardship of the nation’s reserves, and in particular the value of land, on which ordinary HDB dwellers are lectured ad nauseum by the likes of Indranee Rajah, Desmond Lee and before that Lee Kuan Yew, does not appear to have crossed their minds.

The question for Singaporeans is whether they approve of Shanmugam’s and Balakrishnan’s actions and what kind of public servant they want, one who always has an eye on a good deal when it comes to state assets or one who is more interested in getting the best possible returns on our reserves. This saga would never have come to light if I hadn’t revealed it illustrating perfectly that secrecy and asymmetry of information only benefits those in power not the people. News reached me recently that Shanmugam is suing Google and TikTok under the Protection from Harassment Act, presumably one of the objectives being to have my and other articles about Ridout Road removed from search results. Once all information is buried, whether concerning Ridout Road, Ho Ching’s salary, the reserves or what Donald Rumsfeld called “unknown unknowns”, the sooner your rulers can sleep easier in their beds, secure in the knowledge that you remain ignorant. If you want to change things, then the coming election may be your last chance.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam