The report on July 15 (“Five suppliers of spare parts for HDB lifts under probe”) stated that two years ago, the Competition Commission of Singapore (CCS) found EM Services (EMS) guilty of refusing to supply spare parts to third-party contractors.
Thirty years ago, when town councils were first formed and were being managed by EMS, it faced exactly the same problem. Almost all the HDB lifts at the time were installed and maintained by a Japanese firm.
The town councils found themselves at the mercy of the Japanese company, as it quoted high rates for maintenance and repairs. Third-party contractors could not come into the picture, as most of the critical parts were patented by the Japanese company and all spare parts had to be bought from it at high prices.
To break away from this monopoly, HDB started awarding lift contracts to other companies for its new flats, and EMS ventured into being a lift supplier and maintenance contractor.
As more third-party lift maintenance companies came into the picture, the major lift contractors, including EMS, faced competition, so they emulated the spare parts policy of the Japanese company.
It is hoped that CCS will come down hard on the lift contractors, if they are found guilty of creating barriers for competition to enhance their profits.
Ultimately, the ones who suffer the most are the HDB residents, as they would have to pay higher service and conservancy charges.
Ronnie Lim Ah Bee
Source: Straitstimes | 23 July 2016