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