Agency’s (NEA) management of a major public-private partnership project, citing an estimated S$8.09 million in potential excess payments.
The findings, released on 9 September 2025 in AGO’s report for Financial Year 2024/25, centre on the S$1.946 billion TuasOne waste-to-energy plant.
According to the AGO, NEA failed to ensure the project partner, TuasOne Pte Ltd, updated its financial model to reflect actual costs incurred for key components, specifically Land Lease Premium (LLP) and Grid Connection Costs (GCC).
This omission breached the requirements of the 25-year project agreement signed in October 2015, which forms the basis for NEA’s monthly payments to TuasOne.
The TuasOne facility, originally awarded to a consortium led by Hyflux in 2015, was expected to provide incineration services for NEA.
As part of the bidding process, TuasOne submitted a financial model outlining cost, funding, and technical assumptions. This model would influence the Capital Cost Payment Charge Rate (CCCR), which determines NEA’s capacity payments.
AGO’s report stated that TuasOne had known the actual costs for LLP and GCC since 2018 but did not update the financial model as required.
NEA, in turn, failed to prompt or follow up on the update until AGO’s query in August 2024. As a result, the CCCR used to calculate payments remained based on outdated cost estimates.
NEA’s own estimates indicate that it overpaid TuasOne by S$0.53 million from December 2021 to January 2025. With the financial model now updated, it expects to save S$1.73 million over the remainder of the contract period, which runs until 2046.
However, AGO also found that a 2022 restructuring of TuasOne’s ownership—following Hyflux’s financial collapse—may result in additional long-term costs.
NEA had agreed to the restructuring on the premise that it would not lead to increased payments. Yet AGO’s analysis shows that post-restructuring payments may rise by approximately S$8.09 million.
“The AGO’s concern is that NEA could have over-relied on the financial models provided by the partner,” the report stated. It added that because changes to the financial model directly affect payment amounts, NEA must ensure updates are accurate and fully documented.
In a statement responding to media queries, NEA acknowledged its failure to ensure timely updates to the financial model and admitted that it should have exercised greater due diligence.
It stated that TuasOne had since reviewed and updated the model, which has been verified by an independent auditor.
NEA also confirmed it would recover the S$0.53 million overpaid and adjust future payments according to the updated model.
It added that it had enhanced internal processes and oversight mechanisms for all public-private partnership (PPP) projects to prevent similar lapses.
Regarding the 2022 restructuring, NEA defended its decision, stating the project was at risk of being abandoned following Hyflux’s insolvency in 2018.
The project had already faced a 31-month construction delay and significant cost overruns.
NEA said the restructuring was conducted under highly uncertain conditions, with limited interest from other industry players. It considered the outcome satisfactory despite the financial deviation.
“An external financial consultant has assessed that the post-restructuring payments are reasonable and justified,” NEA stated.
AGO’s report, however, noted that the financial models used during the 2022 and 2024 refinancing exercises had not incorporated actual LLP and GCC costs and had other inaccuracies.
Only after AGO’s intervention did NEA request the models be independently audited. These audits uncovered errors, including incorrect formulae, which were later corrected.
Going forward, NEA has committed to implementing annual checks on compliance with all contractual, financial, and legal provisions in its PPP agreements. This includes involving in-house and external experts where necessary.
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