MND says it will release the grants to the town council because it is satisfied that safeguards are now in place to ensure the proper use of the money.
The safeguards include appointing independent accountants, setting up segregated bank accounts to receive the grants, and getting the accountants to sign off on large payments from the accounts.
The independent accountants are from KPMG.
Meanwhile Punggol East SMC has not received the full amount of sinking fund due to them from AHTC.
MP Charles Chong said $22.5 million in sinking funds had been handed over to the WP-run town council in 2013, after the opposition party won Punggol East in a by-election that year.
But AHTC has so far transferred back only an "interim amount" of $10 million in sinking funds.
The exact amount owed is still being worked out, he said.
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