A Government-led review has rejected a claim that property developers have been colluding in their bids on Government land sales (GLS) tenders, an assertion which National University of Singapore (NUS) academics initially said had deprived the state’s coffers of hundreds of millions of dollars of revenue.
The four NUS Business School researchers later retracted this claim from their paper, but on Monday (Feb 3), Associate Professor Daniel Goh, Non-Constituency Member of Parliament from the Workers’ Party, filed a parliamentary question about their original findings that developers could be exchanging information which led to lower winning bids for government tenders.
In a written response, National Development Minister Lawrence Wong said that his ministry found no cases of wrongdoing, and that the land sales programme has an “open, transparent and competitive” tender process in the sale of GLS sites.
It looked into the 103 tenders awarded during the same November 2010 to May 2014 period that the researchers had referenced and found that all tenders were awarded to the tenderers with the highest acceptable bids.
“These were broadly in line with or higher than independent estimates of the market value of the sites,” Mr Wong said of the awarded bids.
For all of the tenders, several bids were received, ranging from three to as many as 23 bids for each site. More than 80 per cent of the tenders had five bids or more, he added.
The study, published last month, had originally claimed to have found evidence of insider trading in the land market.
It concluded that the top managers of Singapore’s real estate developers played golf with each other more frequently whenever a government tender was put out and that their winning bids for the tenders were 14.4 per cent lower than the winning bids put in by those who did not play golf.
The researchers then estimated that the shortfall in government revenue from the lower land prices was about S$147 million on average for every year between November 2010 and May 2014.
Following a categorical rejection by the Real Estate Developers’ Association of Singapore that the industry engages in any form of price fixing, insider trading, or collusion, the researchers — led by NUS Business School’s professor of economics and real estate Sumit Agarwal — walked back their claims.
The researchers later said that they could not find evidence that such insider trading took place and struck the term from their study.
Noting that the researchers had withdrawn their insider trading claims, Mr Wong said that MND’s review of the 103 GLS tenders was done in any case.
“In the event there is reason to suspect any collusion or freak result, the Government will take the necessary actions, including closing the tender without award, or take enforcement action should there be any infringement of the law,” he said.
Source: Today – 3 Feb 2020