<TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR>Oct 24, 2009
S'PORE'S STRATEGIC COMPANIES
</TR><!-- headline one : start --><TR>Keep, don't sell them
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE sale of Singapore Petroleum Company (SPC) to Chinese oil giant PetroChina has been completed, and the company will be delisted and taken private. Companies supplying electricity are taking the corporatisation route and some have been or will be sold to foreign entities as well.
Are strategic companies sold off to foreign owners because they put commercial value-add considerations before national ones? Why is PetroChina interested in a small company like SPC?
Was it SPC's refining assets or exploration rights which persuaded PetroChina to pay a premium over market value?
The purchase was an investment in the future, for PetroChina to gain a foothold in the resources industry. Is Singapore not as interested in protecting its foothold in this same industry?
Initial investments by the Singapore Government with taxpayer dollars in some companies could have been made with economic defence as one consideration. They turned out to be commercial successes.
Why did we start Singapore Airlines, Neptune Orient Lines, Singapore Telecom and the like?
Should we sell off these companies when the yields from these investments become unattractive compared to investments in foreign banks, commercial buildings and telecommunications companies?
Unless strategic reasons are no longer an issue, financial yields should come second to national interests.
James Tan
S'PORE'S STRATEGIC COMPANIES
</TR><!-- headline one : start --><TR>Keep, don't sell them
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE sale of Singapore Petroleum Company (SPC) to Chinese oil giant PetroChina has been completed, and the company will be delisted and taken private. Companies supplying electricity are taking the corporatisation route and some have been or will be sold to foreign entities as well.
Are strategic companies sold off to foreign owners because they put commercial value-add considerations before national ones? Why is PetroChina interested in a small company like SPC?
Was it SPC's refining assets or exploration rights which persuaded PetroChina to pay a premium over market value?
The purchase was an investment in the future, for PetroChina to gain a foothold in the resources industry. Is Singapore not as interested in protecting its foothold in this same industry?
Initial investments by the Singapore Government with taxpayer dollars in some companies could have been made with economic defence as one consideration. They turned out to be commercial successes.
Why did we start Singapore Airlines, Neptune Orient Lines, Singapore Telecom and the like?
Should we sell off these companies when the yields from these investments become unattractive compared to investments in foreign banks, commercial buildings and telecommunications companies?
Unless strategic reasons are no longer an issue, financial yields should come second to national interests.
James Tan
