This is a full version of NEA’s reply issued to the media agency; published in TODAY Online 12 Jan 2020.
Allow local hawkers a decent livelihood while providing affordable food options
We refer to Mr Kevin Tan’s letter, “Keep hawker food affordable” (Jan 3).
The Government does not regulate prices of cooked food sold in hawker centres. Whilst keeping food prices affordable, hawkers need to make a decent living. Hawkers set prices taking into consideration their operating costs, market competition and what patrons are willing to pay. These factors differ from hawker to hawker, depending on the type of food they sell.
To understand the possible drivers affecting hawker food prices, the Ministry of the Environment and Water Resources (MEWR) and Ministry of Trade and Industry conducted a study in 2014 on cooked food stalls in hawker centres managed by the National Environment Agency (NEA). It found that while there were several cost drivers such as raw materials, manpower and rentals, rental costs formed a relatively small proportion of costs for typical hawkers, at 12%. Raw materials made up the largest cost component at 59% while manpower accounted for 17% of operating costs. The study was updated recently by MEWR in 2018, and the findings had not changed, i.e. raw materials still remained the largest cost component.
Although rent is not the main driver of food prices, we have measures to support hawkers. These include disallowing subletting or assignment of hawker stalls to prevent stallholders from engaging in rent-seeking behaviour which could drive up food prices. NEA has also removed reserve rent since March 2012 to allow stall rentals to fully reflect market conditions.
To assist stallholders with increasing concerns over manpower costs, NEA has also started introducing productivity measures in hawker centres, such as centralised dishwashing and automated tray return systems, with Government’s subsidies stretching over four years for existing hawker centres, where stallholders pay between 30 to 70% of the cost of centralised dishwashing service. From 1 January 2019, NEA also co-funds the cost of centralised dishwashing service with stallholders at new hawker centres, at 50% for the first year and 30% for the second year. Additionally, the Hawkers’ Productivity Grant reimburses 80% of stallholders’ costs of purchase of kitchen automation equipment.
In addition, the Government fully funds the building programme of hawker centres, as well as the re-development of hawker centres when due. Repairs and Redecoration (R&R) works of hawker centres are typically carried out every five to seven years, with the costs also fully borne by NEA or respective Town Councils. Stall rentals are not raised because of the costs of R&R works. Stallholders who are directly affected by these works and who are unable to operate their stalls due to the closure of the centres may be given rental remission for the duration of the works.
Hawkers are central to the hawker trade and our hawker culture. To preserve our hawker culture, a balance would need to be struck between affordable food options and respectable earnings for our hawkers.
Andrew Low (Mr)
Director, Hawker Centres Division
National Environment Agency