PUB contests Tan Kin Lian’s "for free" claim despite zero-cost takeover of Tuaspring desalination plant

The Public Utilities Board (PUB) has issued a correction notice to former NTUC CEO and presidential candidate Tan Kin Lian, disputing claims made in his 28 September 2023 Facebook post regarding PUB’s takeover of the Tuaspring Desalination Plant, previously owned by Hyflux. In his post, Tan commented that PUB took over the Tuaspring Desalination Plant "for free, at the expense of the investors and bondholders of Hyflux," and incorrectly stated that the Tuas NEWater Factory was located at the same site as the Tuaspring plant. These comments prompted PUB to issue a public correction on 29 September. PUB disputed Tan’s characterization of the acquisition, emphasizing that it did not take over the plant "for free." The agency clarified that the plant’s purchase price was determined by an independent valuation, which concluded that the asset had a negative value.

This assessment was shared in Parliament by then Minister for the Environment and Water Resources, Masagos Zulkifli, in April 2019, where it was disclosed that the cost to keep the plant operational exceeded its worth. Given Hyflux's precarious financial state, PUB waived a compensation sum owed by Tuaspring Pte Ltd (TPL), Hyflux’s subsidiary, to ensure Singapore’s water security was maintained. However, while PUB's statement highlights factual inaccuracies, some of Tan's assertions may carry weight given the circumstances of the takeover and Hyflux's financial collapse. The plant was indeed taken over for zero dollars, with PUB waiving compensation from TPL. The waiver, while justified by PUB as a necessity to safeguard water operations, still meant that Hyflux's creditors, including 34,000 perpetual securities and preference shareholders owed approximately $900 million, were left empty-handed from the sale of the water plant. This outcome arguably made the recovery of financial losses less possible for retail investors who had placed their faith in the once-renowned water management firm. PUB’s statement further explained that its actions did not weaken Hyflux or exacerbate the situation for bondholders. However, the broader context reveals that Hyflux’s collapse, largely due to mounting debts and mismanagement, severely impacted its investors, many of whom were left with substantial losses. Whether PUB’s actions could have been different is a matter of debate, as Tan’s criticism reflects the frustration of retail investors who felt sidelined during Hyflux’s downfall. PUB’s role in the saga, while arguably pragmatic in its handling of the desalination plant, does not address the broader financial disaster that affected Hyflux’s stakeholders. In addition to the financial aspect, Tan’s post also inaccurately stated that the Tuas NEWater Factory and the Tuaspring Desalination Plant were located at the same site. PUB corrected this by clarifying that the two facilities are situated 6km apart, with the NEWater Factory focusing on producing reclaimed water and the Tuaspring facility, now renamed Tuas South Desalination Plant, continuing to produce desalinated water. This technical error in Tan’s post does not detract from the underlying critique regarding how the takeover impacted Hyflux's investors. PUB’s public correction seems aimed at ensuring accuracy in public discourse, but it also raises questions about how much responsibility the agency bears in managing the aftermath of Hyflux's collapse. As of 10 a.m. on the morning after PUB’s response, Tan had not yet amended his post, and there was no correction direction issued under the Protection from Online Falsehoods and Manipulation Act (POFMA). Hyflux once celebrated as a pioneering water technology firm, was ultimately brought down by financial mismanagement, with it taking on too much debt. The Tuaspring Integrated Water and Power Plant, developed at a cost of S$1.05 billion, became a symbol of Hyflux's downfall when the company failed to keep the plant operational, prompting PUB to take over the desalination facility in 2019. In June 2022, Malaysia-based YTL Power International purchased the power plant assets of the Tuaspring facility for S$270 million. With PUB having already taken over the desalination plant at no cost, this acquisition of only the power plant further frustrated Hyflux investors, who believed the assets could have helped recover some of their losses. While PUB took over the desalination plant to ensure water security, Hyflux’s investors were left with little to recover. Although the takeover may have been necessary for national interests, the financial consequences left many feeling betrayed.