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Corporatisation and privatisation of state assets needs vigorous debate in Parliament.

From public to private?

Leong Sze Hian

I refer to media reports about the corporatisation of Changi airport, and that business at Changi airport has also been affected by the recession.

Some questions that have been raised are: Who benefits from the transaction when a state agency is corporatised or privatised? If an agency is sold, what is the price? If it is privatised, who benefits from the capitalisation?

Since the transaction price to Temasek Holdings will be settled after a separate valuation exercise by the Government, I would like to suggest that this be tabled for further debate in Parliament.

Of course, it may seem quite strange to debate the sale of a strategic state asset, when the price is still not known

How complicated or long can it take for an estimated valuation to be made available when this was first announced in Parliament in October last year?

All our three power generation companies given to Temasek have been sold to foreign companies.

I do not recall any debate in Parliament on the sale of our power companies, to foreign companies.

Like power companies, Changi airport is a strategic state asset. So, I would like to suggest that if Temasek decides to sell Changi in the future, we should ensure now as the corporatisation has been announced, that it be subject to Parliamentary approval, unlike the case of our power companies.

Since we will eventually know the price of this major asset transfer to Temasek, why not disclose the price for major state assets transferred in the past, like the Port of Singapore Authority (PSA) and Singapore Power (SP)?

Such greater transparency would be in line with the 24 principles that Sovereign Wealth Funds (SWF) like Temasek and GIC have subscribed to, to enhance greater accountability and transparency.

With the public’s concern over the recent 21 per cent electricity tariff hike, in spite of the estimated $1.6 billion total combined power sector profits for the last financial year ; and the share price of SingTel (largest ever state asset sale to Singaporeans) at about $2.47 which is still below its $3.61 IPO price in 1993, now may be a good time for us to re-examine and evaluate the hows and whys of privatisation of state assets.

The common man may not have benefited much from the previous privatisation of essential services like public transport, electricity and telephony, as it may have led to ever increasing profits for the operators and increasing charges for Singaporeans.

How, and through what process and criteria are used, to determine the transfer of state assets? Will the day come when all our state assets are corporatised? Using the power companies as a case in point, will all our state assets be someday owned by foreigners?

Does this mean that there may be less scrutiny, accountability and transparency, than if the assets were held in the hands of the state?

For instance, in the issue on the “21% electricity hike”, it was revealed that certain supplier contracts could not be disclosed for reasons of commercial confidentiality between private parties.

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