S'poreans are at the mercy of the greed of the GLCs.

Greed run amok

Andrew Loh / Deputy Editor

One made $3.6 billion, another, $1.086 billion last year. Yet another had profits of $505 million. Two others reaped $150 million and $50 million.

All have increased further the prices of their services this year.

What’s more, all these companies are providing essential services such as public transport, electricity and newspapers.

All are owned or partly-owned by Temasek Holdings – and thus, are classified as Government-Linked Companies, or GLCs.

Has greed run amok? That despite achieving such handsome profits, these companies find it necessary to raise prices at a time when the economic outlook isn’t that great, the stock market continues to be in flux and the cost of living has spiralled out of control?

Singaporeans are left at the mercy of the relentless pursuit of record profits by these GLCs. And in case anyone accused them of profiteering or being greedy, some of these companies, such as SMRT, SBS Transit and SingPower, have announced that they will provide “vouchers” for the poor and needy. It is, to me, nothing more than just a public relations exercise – to make the companies look good while they suck the lifeblood out of Singaporeans.

So, you have SMRT and SBS Transit giving out vouchers worth some $400,000 and SingPower giving out vouchers worth $1m – compared to the hundreds of millions and, in SingPower’s case, $1.08 billion, in profits which these companies have made.

Consumer watchdog bodies such as the Consumer Association of Singapore (CASE) and the Public Transport Council (PTC) and the Competitions Commission all seem to be useless and worthless and toothless in helping curb such profiteering by these companies.

It would seem that Singaporeans are standing naked, as it were, in the face of the blatant and pure greed of these “corporate monopolies”. Yet, the saddest thing is that no one seems to be speaking out for the average Singaporean – not the 84 MPs in Parliament, not CASE, not the Competition Commission, not the opposition parties (except maybe the S’pore Democratic Party).

For the record, the abovementioned list of profits belongs to:

$3.6b – Singtel, which raised phone charges this week.

$1.086b – SingPower, which raised electricity prices by 22% this month.

$505m – S’pore Press Holdings, which upped its newspaper prices this month.

$150m – SMRT, which raised its train fares on Oct 1st.

$50m – SBS Transit which also raised its fares on Oct 1st. (Its parent company, ComfortDelgro, netted $223m last year).

It is quite evident, to me, that greed is the driving force behind these price increases. What is, however, even more regrettable, is that the Government of Prime Minister Lee Hsien Loong is allowing such greed to run amok. These companies are, after all, Government-linked companies, all under the umbrella of Temasek Holdings, the Government’s investment arm.


Below is a comment posted by Donaldson Tan in response to another commenter, inspir3d:

inspir3d (#6):

Computing the EBITDA margin (ie. EBITDA/Revenue) is sufficient for quick comparison. Values are from their respective 2007 annual reports.

Singtel = $4,540M/$14,844M = 30.6%

SingPower = $2,103M/$5,446.8M = 38.6%
Singapore Press Holdings = $634,391,000/$1,172,442,000 = 54.1%
SMRT = $273,293,000 / $743,126,000 = 36.8%
SBS Transit = $87,961,000 / $670,042,000 = 13.1%

A healthy EBITDA margin is usually between 10-20% margin whereas an EBITDA margin exceeding 30% is regarded excessive by the standards of many overseas industry regulators.Singtel, SingPower, SPH and SMRT are clearly doing too well at the expense of Singaporeans. I can’t see any good justification that the competition commission or PTC would approve the price hikes for these 4 companies