Bedok hawkers in pioneer social enterprise centre

SINGAPORE - Even before the first hawker centre run by a social enterprise opens in Bukit Panjang in 2015, a private food centre in Bedok has been quietly pioneering the model.

Opened in October last year, Kampung@Simpang Bedok aims to help tenants grow their businesses, including giving them an option of getting a salary - and not paying rent - until they are on a surer footing to run their stalls.

The 32-stall facility is managed by Best Of Asia, an F&B social enterprise set up by 12 friends led by 52-year-old retiree Deirdre Murugasu, formerly deputy chief executive at water-treatment giant Hyflux.

While the monthly rental of about $3,200 is lower than at privately-run centres such as Kopitiam Square in Sengkang where it ranges between $5,000 and $6,000, it is still significantly higher than that in nearby hawker centres managed by the National Environment Agency.

But food prices at the Simpang Bedok centre remain competitive, with most dishes typically costing just 50 cents more than at Bedok Hawker Centre.

Dr Murugasu said, for now, all the revenue and more is ploughed back into the business. Hawkers can also opt for a joint venture, under which profits are shared. Currently, half the tenants pay rent and the rest have opted for support from Best Of Asia.

"We're trying to build up people who need help. Some of us have been there and done it, and we look around and see lots of people stuck," said Dr Murugasu. Her colleague, Madam Jill Ang, in her 40s, said the centre is making a "modest profit".

Mr Haniff Mohd Noor, 42, who sells nasi padang, said the rent he pays is worth it since the centre is near other popular eateries and private homes.

"If I bid for a good location in a normal hawker centre, I believe I will end up paying more," he said.

Mr Muhammed Abdullah, 59, who runs a halal Western food stall, draws a small salary for now but aims to take over the stall when the business takes off. "They backed me up," he said.

The food centre has the backing of Ms Elim Chew, head of a panel set up by the Government in 2011 to rethink the way hawker centres operate.

One of the recommendations was for social enterprises to run future hawker centres so that rentals can be moderated and food prices kept affordable.

Ms Chew emphasised, however, that social enterprises must keep their operations viable.

"The rental should be lower than market rates but it should not be too low - they have to cover their main costs. And it must also be sustainable for individual stalls," she said.

Professor Leong Kaiwen from Nanyang Technological University's economics division noted that low rentals could be hard for social enterprises to sustain and suggested that the Government could consider stepping in with subsidies, or longer-term rent controls.

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