Ccs Woes Spur Tengah Residents Seek Legal Recourse Against Sp Group
Tengah, Singapore (EdgeProp)- When Tengah eco-town was first launched six years ago, it was marketed as a “forest town” with sustainable and smart features. One of its selling points was the central cooling system (CCS), which was the first system of its kind to be offered in a public housing estate.
Initially, marketing materials touted the CCS as a cost-effective and eco-friendly system that uses centralised condensers to pipe chilled water as the main coolant. It was estimated to offer cost savings of up to 30% compared to conventional air conditioning systems.
However, residents who have moved into Tengah have encountered various issues with the CCS, leading some to seek legal action against SP Group, the company responsible for designing and implementing the system.
According to a Telegram chat group called “Tengah CCS Issues”, which has 3,000 members, 500 respondents participated in a poll to gauge their intentions. 4.2% of the respondents stated that they have already opened a case with the Small Claims Tribunal (SCT), while 18.4% indicated their intention to do so.
Out of the 21 respondents who claimed to have opened a case, four were successful, three were not, and the rest were still in progress.
Most of the residents who have taken legal action have done so due to a lack of confidence in SP’s ability to fulfill their initial promises of a cost-saving and eco-friendly CCS. Hence, they are seeking to terminate their contracts with minimal financial loss.
As of July 22, the MyTengah.sg website still displays outdated cost-saving estimates from November 2023 (Source: SP Group/MyTengah website)
Early birds who encountered issues
A resident of Tengah, known only as Mrs Tan, has an ongoing case after signing up for the CCS in 2020. She recalls why she signed up: “The system was eco-friendly, cost-saving, and we wanted to support the new idea. It didn’t matter that we signed up years before the actual implementation because we believed that an established organisation like SP would execute it well.”
However, Tan’s issues with the CCS and SP began shortly after signing the contract. She wanted to shift her fan coil unit, a request she had mentioned to SP’s sales representatives before signing the contract.
However, after signing, she was informed that the system could not accommodate the shift. She attempted to resolve the issue with SP for over a year before requesting that pre-installation works for her unit be put on hold.
The majority of complaints regarding the system stem from water condensing or leaking from the piping. (Credit: Samuel Isaac Chua / EdgeProp Singapore)
Penalties for termination
Photos and videos of pooling water caused by the CCS started appearing on the “Tengah CCS Issues” chat group on Sep 22, 2023, after the completion of the first batch of flats in the estate.
On Nov 6, 2023, SP released a statement revising its initial cost-saving estimates from 30% to 17%, citing an increase in electricity costs. They also announced multiple measures to ease residents’ concerns, such as additional quality checks, waiving CCS usage charges, halving the contract cancellation fee, and resolving 88% of reported issues.
However, due to her previous bad experience with SP, Tan decided to cancel her contract. This incurred a cost of $796.25, or 17.5% of her total installation charge. At that time, her unit was only five months from completion.
Currently, residents who terminate their CCS contract before the fan coil units, piping, and cabling are installed are penalised 17.5% of the total installation charge. This penalty rises to 50% if the contract is terminated after the installation works are completed. Residents who cancel their contracts within the 30-day cooling-off period do not incur any cancellation charges.
According to the contract agreement issued by SP, the amount reflects a “genuine pre-estimate of the loss” suffered by the company due to the cancellation of the contract.
(Source: Samuel Isaac Chua / EdgeProp Singapore)
Claims and counterclaims
However, according to court documents seen by EdgeProp, at least one resident has successfully appealed against SP’s claim of damages for customers who terminated their contracts.
The resident, known as Maan, a construction project manager in his 50s, succeeded in dismissing SP’s claim for damages during his SCT hearing in February.
Just like Tan, Maan terminated his CCS contract after the system could not accommodate the coolant pipe being rerouted for his renovation plans.
Maan claims that an SP sales representative had assured him that he could void the contract without any repercussions in such cases. However, after cancelling his contract, SP notified him that he was still liable to pay the cancellation fee.
As Maan could not produce any evidence of the sales representative’s assurance, he filed a claim against SP with the SCT. In response, SP filed a counterclaim.
“I’m not sure why I even filed the claim,” says Maan, as he had not paid the cancellation fee at that point, and thus, could not prove that he had suffered any loss. However, to his surprise, neither could SP.
According to SCT records, SP’s counterclaim was dismissed.
“When we were asked to produce evidence, SP didn’t submit anything,” recalls Maan. “I think that’s why the magistrate dismissed its claim.”
A future resident of Tengah’s Park District, a multimedia designer in his 20s known as Jay, has opted not to pay for the termination charge and is waiting for SP to file an SCT claim against him.
(Source: Samuel Isaac Chua / EdgeProp Singapore)
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According to residents chatting in the Telegram group, the SCT is likely to view payment of the termination charge as a settlement and dismiss the case.
“At the moment, we just refuse to pay and see how it goes,” says Jay, who believes that fewer people will be inclined to go down the SCT route now due to many frustrating stories of SCT cases being dismissed.
More than 9,000 CCS subscribers As of Feb 12, SP reported that there were over 9,000 CCS subscribers in Tengah, which is equivalent to about 70% of residents who signed leases for HDB flats in the estate.
SP has also stated that they hope to resolve all reported issues within 10 business days of the initial inspection.
When asked for comment, an SP spokesperson said, “SP Group, together with our partners, are committed to delivering a reliable, energy-efficient, and cost-effective CCS. Our round-the-clock operations and customer support teams remain ready to respond to customer queries and assist them with timely support.”
(Source: Samuel Isaac Chua / EdgeProp Singapore)
‘Brilliant idea’
A renovated five HDB flats in Tengah, and all five had subscribed to the CCS. “Of my five projects, three units experienced issues with leaking and condensation before renovations began,” says Pang. “Technicians from SP Group responded within two to three weeks at no additional cost to the homeowners.” He has not received any complaints about the CCS since.
Based on his personal experience and conversations with other interior designers who have done renovations in Tengah, Pang believes that instances of CCS faults severe enough to require rectification works after renovation are “quite rare”.
He also shares that there are preventative measures to minimise such cases. “I advise my clients to thoroughly test their CCS units and report any issues before renovation works,” says Pang. “This way, any leakages can be identified and addressed before they affect renovation works.”
Another preventative measure Pang takes is to avoid hiding or covering the coolant pipe’s trunking in the units he renovates. This is to allow homeowners to identify and rectify any problems with leaking or condensation in the future.
“The CCS is a brilliant idea,” says Pang. Although it has teething issues, he believes they are resolved in due time. He cites the new open-concept layout offered at the upcoming October launch of the Kallang-Whampoa Build-To-Order flats as an example. He explains that without additional support beams, the piping of the air conditioning systems would be even more exposed without a false ceiling. However, Pang is “cautiously optimistic” that the issue will be resolved.
Editor’s note: The author of this article is a future resident of Tengah, and he has chosen to install the CCS in his future home.