Wednesday, July 20, 2011

Revisiting the decision to privatise our power stations.

Since we are on the topic of privatisation, you might want to relook at the decision to privatised our power stations. The decision was never explained clearly to Singaporeans. Japan’s Marubeni bought Singapore’s biggest power station. Senoko, for S$4bn in Sep 2008. Tuas, the smallest and most efficient in Singapore – to China’s Huaneng group for S$4.2bn in March 2008. In December 2008, Power Seraya was sold to YTL, a Malaysian company after it made an unsolicited offer for the power station.

The story that was sold to Singaporeans at that time was:
" The way you pay your electricity bills will soon be very much like topping up a
pre-paid card.

This is possible under a S$3 million pilot scheme that
allows small consumers such as households to switch between electricity
retailers.

In fact, consumers will only pay for electricity as and when
they need it.

Over the next 2 years, the market regulator will be
piloting this new system, known as the Electricity Vending System (EVS), that
aims at opening up competition in the market for households and small
businesses
." -  CNA Report, Oct 2007.[Link]


We were suppose to have competition just like we do in the telco sector and consumers are supposed to enjoy great savings/discounts from the competition. However, there are several problems here - none of the privatised power stations can supply the whole market so why would they compete for more customers when their capacity is limited. In the telco arena, each mobile player has the full infrastructure to take as many customers as they can win.

The competition in the electricity market has not materialised and our strategic national assets are now in the hands of foreigners who bought them from Temasek during the Financial Crisis. Utilities are a great asset because the owners are guaranteed a profit by the EMA that adjusts the price of electricity based on the input cost as the price of oil fluctuates. However, if there is no price fixing by EMA and these suppliers are free to make as much profits as they want, will we be better off? Remember each player is only able to supply part of the market so is there any incentive to compete and drive prices down?

Why did Temasek sell our strategic national assets to foreigners? What happened to liberalisation of our electricity market through the EVS?  Utilities are a great source of steady income especially when the EMA guarantees profit by fixing prices - does it make sense for us to give these profits away to foreign entities?

56 comments:

Anonymous said...

Temasek has to sell the assets so that their annual report looks good. They were losing money overseas and a good way to balance that is to sell assets that they got for the cheap. The root of the problem.. Ho Jinx.

Anonymous said...

What has our "quiet, hardworking" President Na_than had to say about this.

How come our elected MP views on this. Is it not their jobs to look into the long term policies that affects Singapore, or are they just "foreigners" like MP J Putchery or CSM. Are we "foreigners" in our land of birth.

Anonymous said...

We have foreign workers.

We have foreign managers and talents.

We have foreign money.

So why can't we have foreign-owned Power Stations too?

The only thing we cannot have is foreign government.

But there is a way. By turning foreigners into citizens into MPs and then appointed them as ministers!!

Everything also can!

Only thing cannot is too many opposition MPs!

Anonymous said...

Thanks for bringing this up. The policy to sell these national assets is questionable.

Chua Chin Leng aka redbean said...

Hi Lucky, my only thought is that they had more or less decided to go the nuclear road. And it is only expedient to sell off the conventional power stations and roll out the nuclear power station later. Otherwise no jokers will dare to sell off such strategic assets to be controlled by foreigners.

Unfortunately, like the great investment schemes, the one up there did not like it and threw the plan into disarray by showing how deadly wrong a nuclear power station can become, just like losing hundreds of billions and creating a big crater.

The one up there is always in control of man's foolishness.

Anonymous said...

Concur with Redbean that we are raising funds for nuclear power, it's very obvious. Not necesarily a bad thing if our neigbbours with their lax safety records decides to go the nuclear route as well. Any accident will impact everybody else. share and share alike.

Anonymous said...

Nuclear Power for Singapore still OK lah, because we do not have earthquakes or tsunamis like those in Fukushima, Japan.

As long as we can control nuclear power properly, like the way PAP control their power properly, should be no problem.

I support nuclear power because it is cleaner, provided it is properly controlled and managed.

Anonymous said...

Yes, no natural disasters like earthquake or tsunamis. But what about man-made disasters?

If a terrorist can escape the country with nobody knowing, what's to stop a terrorist from entering a nuclear plant? And before you say that'll never happen, we never thought Mas Salamat would be able to escape too didn't we?

Anonymous said...

EMA does not "guarantee" a profit for the power generators. The formula EMA uses for pricing electricity to households is based on fuel costs AS WELL AS the cost of running the most efficient generator. None of the gencos have 100% of the most efficient generator, as technology always advances. This creates incentive for the gencos to upgrades their plants.

Anonymous said...

Whats to discount the possibility of kickbacks from the gencos to the PAP to ensure their EMA lackeys continue to ensure their profitability?

Anonymous said...

Secondly, altho each genco cant supply the entire of Singapore's electricity demand, most are supplying way below their capacity (spare capacity is crucial in providing backup for such an important resource such as electricity). Hence i dont understand why u say there is no incentive for the gencos since they cant supply the entire market. If you look at almost any other industry none of them can supply the entire market (eg can toyota supply 100% of the worlds cars?) But this does not impinge on their incentive to perform.

Anonymous said...

To Anonymous of 20/7/11 10:25

Kickbacks? Goodness you have got to be kidding. Whats there then to prevent kickbacks from banks to MAS to ensure their profitability? (whatever tt entails)

You are posting the allegation that there could be bribery not only at a high level, but also on an extremely wide level, ie entire electricty industry with EMA. How likely is this? Besides, the entire pricing formula is transparent and online. You can go read it to satisfy urself.

Anonymous said...

Third point is that efficiency and productivity has gone up very very significantly since the privatisation of these gencos. Staff strength for one is much leaner than before. You may argue that the profits now go to private shareholders, but it is definitely inarguable that efficiency amongst the gencos has improved.

Anonymous said...

We need to push for answers! What happen? Did president Nathan authorize the sale of our national strategic assets? Why citizens are not consulted on such important matters? Will our land and CPF be sold to foreigners soon?

The state press failed our citizens miserably. We are betrayed!

Anonymous said...

Selling is OK.

Like if you sell your precious house, you will have no more house but you will have more precious money. Because money asset is more liquid than house asset, right?

So it just changes from one type of asset into another. Nothing wrong with that.

Same thing for power stations lah.

Anonymous said...

Who did you vote for in GE2011? Are you part of the 60.1%? Sinkies deserve the govt they get, and you deserve to be screwed. You die your business.

Anonymous said...

Well done Mr Lucky! Please continue to distract the daft while our Tony strolls into Istana.

Kaffein said...

Too bad, Singaporeans, we've been had. And marginalised for a long, long time. So long that we forgot what we are paying for these days.

Everytime some mumbo-jumbo numbers and statistics are thrown at us by the government and powers-to-be, we suck our thumbs and grit our teeth.

I have this question often but received not answer. These GLC companies used our money to set up, grow and operate. Now they charge us back what our 'investments' gave them.

Kaffein

Kaffein said...

Sorry the question is: Why and how did we allow that to happen?

Kaffein

Anonymous said...

"Sorry the question is: Why and how did we allow that to happen?"
Kaffein 20/7/11 17:17

The question should be "Why 60% voters make it happen?"

You may not be the 60%, but you also cannot control what had happened or will happen.

Anonymous said...

yeah this just shows that all that talk about national security over water supply is bullshit. its just one man's irrational fear of our immediate neighbours

Anonymous said...

Maybe asked TCB or TT, and see what is their explanation

Anonymous said...

Dear Lucky,

You ought to know this.

This is a sidenote as sometimes it is difficult to communicate to you as you don't have an email.

Over the last 10 years, more and more Singaporean men are delaying marriage and marrying foreign brides such as Vietnamese, China, Indonesian and filippina brides.

This was not published in the Straits Times but I was told by a senior Immigration Officer that the Women's Asssociation wrote to ICA to NOT allow this to happen, so that Singaporean men can marry Singaporean ladies.

The reason given was that many Singaporean ladies are left on the shelf.

Such is the extreme level of pragmatism in our government's policies. They want to license who you can and cannot fall in love with.

Anonymous said...

sgp women like to throw themselves to AM lan what....

Anonymous said...

"Anonymous said...
Nuclear Power for Singapore still OK lah, because we do not have earthquakes or tsunamis like those in Fukushima, Japan."

And what makes you think that nuclear accident could only happen or result because of only earthquakes or tsunamis and not from other unforeseen or unpredictable circumstances.

All things have risks but certain risks will put you back into stone age or affect the genetic make-up of (e.g human deformities, cancer, etc) of your future generations or mankind.

Anonymous said...

Trust those in charge, just like you would trust your doctor or surgeon.

If not, what other choice? Unless you can trust yourself.

Anonymous said...

you singaporeans are completely clueless lot. especially anon 22/7/11 00:29, you seem to be completely retard for assuming sinkapore got no earthquakes and tsunamis. what about the one in Sep, 2009? http://www.youtube.com/watch?v=0cSbbrnd5Ak

by the way you haven't even read this one yet... i bet you had no clue about this one too...
http://www.bloomberg.com/news/2011-04-13/tokyo-bay-home-demand-to-sag-after-earthquake-turned-land-to-mud.html
Property built on reclaimed land is sinking! Bye bye Marina Bay, i'd be more than happy if that devil's shithole went down sinkhole. i pity those idiots who bought units at the Sail...

Anonymous said...

"Anonymous said...
Nuclear Power for Singapore still OK lah, because we do not have earthquakes or tsunamis like those in Fukushima, Japan."

Considering the gahmen's track record of screw ups, it will be foolish to trust them with nuclear power.

Do not under-estimate incompetence. If there is a way to get FUBAR'd, they will find it.

The Pariah said...

Privatising our power stations was PAP's strategic move to hive off any possible political flak of price hikes for electricity which is more likely to go up with growing demand and finite oil supply.

This is one sacred cow that will NEVER be slaughtered.

Ditto for water treatment plants.

Anonymous said...

To anon 20/7/11 8:47

You're right. Singapore is a country who welcomes foreign talent everywhere except the government. Actually, with the government, they also don't welcome local talent. That's why the government is so great!!!

Anonymous said...

/Anonymous said...you singaporeans are completely clueless lot. especially anon 22/7/11 00:29, you seem to be completely retard for assuming sinkapore got no earthquakes and tsunamis. what about the one in Sep, 2009? http://www.youtube.com/watch?v=0cSbbrnd5Ak/

In fact, all are things are possible - it is only a question on probability.

The sun may also explode tomorrow but what do you think of the probability of it happening. Some people are always confident in their statement and find no lack of reason to support their cause. And when events turn out in contrast to what they believe in or predict, they will again find no lack of reason (excuse) to support why it happened (after the fact).

No assumption is made that that there would be no earthquakes and tsunamis in singapore. Geography and weather is always shifting and changing and there is no no way to predict the unpredictable (butterfly effect).

TokyoSingaporean said...

Quite frankly, if I compare levels of safety between Singapore and Japan, our government is still much more effective compared to the Japanese government. We're experiencing radiation leakage and all the 3 nuclear plants have melted. In Singapore, the government would always downplay the small stuff but here in Japan, they downplay the big ones.

Anonymous said...

/In Singapore, the government would always downplay the small stuff but here in Japan, they downplay the big ones./

And how did you come to know that Japan is downplaying the big stuff and Singapore is downplaying the small stuff.

Coming from another angle and playing the devil's advocate, did it ever occur to you that perhaps the big stuff are kept away from your knowledge and the small stuff are sanctioned to be spilled out into the public consumption.

How do you rate the media here vs Japan and any possibility that the level of media coverage of big & small stuff especially if it involves government reputation determines the level of of big & small staff that you come to know.

Anonymous said...

Look at the crowds supporting TCB.. he's like a people's person, a natural. A breath of fresh air!

Anonymous said...

Whomever thinks that it's a good idea to privatize power plants has never heard of Enron:

http://en.wikipedia.org/wiki/California_electricity_crisis#Involvement_of_Enron

Anonymous said...

In Singapore, there is no problem with price increase, whether electricity, transport or HDB flats.

As long as the country remain peaceful, stable and prosperous.

This is unlike other countries where riots can happen if there are such increases. So this is no good.

That's why Singapore is a very good place to work and live.

Anonymous said...

/This is unlike other countries where riots can happen if there are such increases. So this is no good./

Before the riots, peace also existed in many countries until the people cannot tahan the cost of living, e.g price increases, anymore which cannot be supported by idle high unemployment or unsustainable lower wage while seeing their higher elites getting away with their cocooned high lives.

People do not riot just for the fun of it as there will be retaliation from the powerful enforcement units.

Anonymous said...

http://www.razor.tv/site/servlet/segment/main/news/66074.html

Thank you, you fucking 60%!

He took the fucking pension and we are being taxed to pay for his incompetencies and NOW he takes responsibility.

Fucking 60%

Anonymous said...

Mr Tan,

We have u been. You have not shared with your readers fresh works for more than a week.

Anonymous said...

Lucky,

Were you invited to Dr Tony Tan's lunch with bloggers?

See link: www.mrbrown.com/blog/2011/07/lunch-with-dr-tony-tan.html

If not, did you wonder why not?

Pariah Logic said...

Hi Lucky,

Love your blog. There is going to be a bloggers forum coming up in September (a roundtable of current affairs and issues in Singapore by Singapore bloggers).

Would love to have your participation. Do drop me an email if interested! Ill fill you in on the details.

Cheers,

Anonymous said...

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Anonymous said...

The sale of the power stations was really more of a fire-sale. It happened during the time when Temasek knew its balance sheet was precarious and therefore hastily concluded the sale.

It is amazing that Singaporeans are such sheeples that they can be conned into being fleeced at two levels: nationally, they will never see the money coming from sale of national assets. Personally, they will have to pay more for utilities given the sale involved an agreemen to sell to Singaporeans at an unreasonable profit (to warrant the relatively high price). That is why Singaporeans are paying the highest prices in the world for their electricity.

HAHAHAHAHAHA.... Sheeples indeed!

Anonymous said...

"That is why Singaporeans are paying the highest prices in the world for their electricity."
Anon 31/7/11 09:34

Really? But if it is true, it's still OK.

As long as at least 60% of voters are OK with it.

And not just for electricity, but also for HDB flats, transport fares, etc etc.

Anonymous said...

Many of the 60% voters are actually the older generation, the handicapped, illiterate and the ignoramus.

By the next elections, at least 15 % of them will phase out.

Unfortunately, the new citizens will take over them. They are the buffer to PAP hegemony.

Anonymous said...

This blog is dead.

Anonymous said...

Mr Tan,

Have not heard from you for almost three weeks. R u OK?

Vapir No2 Vaporizer said...

these indians should be ignored they enslave their staffs. We stand to gain nothing from them. They will just come to steal and destroy.

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Anonymous said...

Alot of people lost alot, limbehsebejialut
I think he is still ok so far??

Anonymous said...

Mr Tan,

very worried about your long silence... hope u r fine...

Anonymous said...

hi your blog titled Recession Looms, which is blurbed in the Singapore Alternative News, does not seem to be posted....

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