Friday, September 05, 2008

Your power supply is now privatised....

I guess it has been tough on Singapore Power - all those poor Singaporeans who can't pay their utilities bills raking up arrears and squeezing its profits. It is now time to put and end to this. Temasek is selling splitting up our power supply and selling it to 3 different buyers. The official logic is that with 3 players there will be competition and that will "help" Singaporeans to get a good price for their electricity. This is little strange because each of these players control only one third of our electricity supply - what is the incentive to lower tariffs to grab more customers when they have limited capacity? These investors who have paid something like $4B each to buy our generators will certainly want to get the highest return on their investments. Remember these generators were sold to the highest bidders not to people who promised to give Singaporeans the lowest possible tariffs.
For those of you who don't know, there is a "Smart Meter"pilot conducted right now for 1000 households. When the smart meter is installed, you have to purchase credits before you use your electricity at 7-Eleven or online. The meter will allow you to monitor your usage hourly, daily and monthly so you don't "over-use" your electricity. I guess with those investors paying $4B for our power generators eager to recover their investments, I better be watching my electricity usage closely. Thanks to these smart meters, I'll be able to check on my usage hourly.
I'll alway remember what one of our million$ ministers said about why things cannot be inexpensive in Singapore ..... so that Singaporeans don't use what they don't need. That is why the Singapore govt couldn't reduce the petrol tax when petrol prices reached a historic high recently and why ERP has to go up even as the economy slumps. I guess it is the same for electricity now, you really shouldn't use more than what you can afford. For the poor, it will mean candles in the night but can they really afford those candles?

Japan-led consortium to buy Temasek power firm: sources
3 hours ago
SINGAPORE (AFP) — A Japanese-led consortium has won the bid for a Singapore power company being sold by state-linked investment firm Temasek Holdings, sources told Dow Jones Newswires Friday.
Japan's Marubeni Corp heads the consortium and will pay Temasek about 2.5 billion US dollars for Senoko Power, they added.
"Marubeni is the winner," one said. Neither Temasek nor Marubeni spokesmen could be immediately reached for comment by AFP.
Marubeni operates in Japan and globally across a wide range of sectors from food to power.
Senoko is the second of three local power generation firms Temasek is unloading as part of efforts to liberalise the domestic energy market.
Temasek said in March that it had signed a share purchase agreement with SinoSing Power Pte Ltd, a wholly owned subsidiary of China Huaneng Group, to sell Tuas Power Ltd for 4.235 billion Singapore dollars (2.96 billion US).
Temasek's third power generator is Power Seraya.
Last month Temasek reported a record profit of 18.2 billion Singapore dollars for the year to March, and said its portfolio rose in value to 185 billion Singapore dollars.
Temasek has controlling stakes in Singapore Airlines, Neptune Orient Lines and Singapore Telecommunications as well as other major regional firms.
It is one of two Singapore government investment vehicles, along with the Government of Singapore Investment Corporation.
Temasek has invested billions of dollars in troubled US investment bank Merrill Lynch since late last year.


Anonymous said...

Bravo!!! Now our dear gahmen has been spared the awkward moral obligation of subsidising electricity bills....

Now they can truly say that price inflation is due to "globalisation".

Coming up next, our waterworks to be sold for the highest bidder?

Onlooker said...

Time to look for alternatives.

Anonymous said...


Anonymous said...

>>Time to look for alternatives.
Another NEWater...NEWatt?

cantbelieveit said...

I'm getting depressed....

family man said...

so stupid. Highest bidder - of course these foreign companies will charge the Singapore citizens highest prices.

And the Temasek holding gets the highest revenues from the bids. Who wins? Those people in Temasek who brokered the deal will probably be looking at big money bonuses, all the money tied up in Temasek to fuel further 'deals' like citibanks etc. And those deals again give those people in Temasek more bunus at end of the year.

Not a cent to the singapore citizens. And we end up paying more thereafter as the govt continues to sell these National Jewels. How can? All these cross selling from one govt to another just so that they need not subsidise of 'help' the citizens of their own nation.

Is this what people call legally uncorrupt, but factually corrupt. We all know about Thaksin, but try saying 'show me the money' and you know where you will end up.

The 'legally corrupt' Chee siblings have become the 'moral heroes' of the day which led to the opening up of Hong Lim square.

I am sadden by this news.

Anonymous said...

You're all very short sighted and don't have the long-term views that our esteemed leaders have. As Lucky Tan mentioned in one of his posts, this is part of the government's plan to bring Swiss quality of life to Singapore! When electricity price is increased and you can't pay for warm shower anymore, remember that Switzerland is cold and you're living Swiss quality of life.

Anonymous said...

Time for Singaporeans to welcome the new Oligopolists:

An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). The word is derived from the Greek for few (entities with the right to) sell. Because there are few participants in this type of market, each oligopolist is aware of the actions of the others. The decisions of one firm influence, and are influenced by the decisions of other firms. Strategic planning by oligopolists always involves taking into account the likely responses of the other market participants.

This causes oligopolistic markets and industries to be at the highest risk for collusion.

Firms often collude in an attempt to stabilise unstable markets, so as to reduce the risks inherent in these markets for investment and product development. There are legal restrictions on such collusion in most countries. There does not have to be a formal agreement for collusion to take place (although for the act to be illegal there must be a real communication between companies) - for example, in some industries, there may be an acknowledged market leader which informally sets prices to which other producers respond, known as price leadership.

Hi Family Man your observation regarding Temasek's brokers is spot on.

I'm wondering whether the GIC managers who brokered the deal with Citibank get extra bonus or not?

I'm wondering whether Temasek and GIC expansion strategy is made possible by borrowing money from CPF?

Electricity = privatised (who benefits?)

Hospitalisation = privatised to insurance providers (who benefits?)

CPF minimum $40,000 regardless of age = cannot be invested (who benefits?)


Economists with a heart :)

xNSman said...

Can someone explain to a peasant like me, how did the Senoko Power Station end in the hands of Temasek for them so sell off as an asset. Was this asset funded by taxpayers? If yes, where is the money?

Anonymous said...

xnsman, as far as I know - it went to Temasek and after that - it is a large big black hole.
All investments are not to be accounted not even in our highest regulatory body in parliament - because it is a private body with its own decision makers. (does not matter that a few cabinet members are in the board of directors of GIC / Temasek) No, it is a big black hole, but we will get a report in the long term, probably after MM Lee has passed on and PM Lee and Ho Ching has gracefully retired.
Why ask - we probably can't handle the truth that billions have been lost in some investments.

Anonymous said...

I felt being cheated again by this garmen.

How many times more will we be sold out by this garmen?

Anonymous said...

how did the Senoko Power Station end in the hands of Temasek?

because u allowed it. u did not protest. u did not speak out against it. possibly too busy counting ur growth dividend.

Anonymous said...

its all part of a bigger plan...

i dont know why everyone is missing it. Lucky, you are indeed a very astute man.

This move, plus all the expensive lifestyle, and high tariffs, etc, will weed out the poor. it will bring in high-income and smart people to Singapore.

Singapore will change and become an even more 1st world country/city - beating even the Swiss, Tokyo, HK, London, New York. We will only have the best of the best - and beat the crap out of our neighbours, and even China or India. We will attract the best from their citizenry to become ours! We are on our way to becoming the Utopia of Asia.

everyone who cant take this Singapore Power sale, well, you can get out of my uncaring face.

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