Wikileaks' Stunning Revelations about Singapore's Corporate Elite

Something that particularly piqued my interest today was the profound Wikileaks revelations about the Island Power saga, and Singapore's corporate sector in general.

Island Power is an 800MW independent power producer (IPP) gas-fired power plant in Singapore that recently (mid 2011) achieved financial close and commencement of construction. It competes with the three large Gencos, Senoko Power, PowerSeraya and Tuas Power that were formerly owned by Temasek Holdings and that were privatised to foreign investors in 2007-2008. Island Power also competes with two GLCs in the Singapore power sector, namely Keppel Merlimau Cogen (Keppel Corp) and Sembcogen (Sembcorp Utilities).

The development of Island Power has taken a very long time, and goes as far back as 2000, when the original sponsor of the project, Intergen, got a license from the Energy Market Authority (EMA) and started the process to develop the power plant in Singapore. However, for more than 10 years, Island Power was beset with delays, ostensibly regarding their ability to procure access to a natural gas pipeline supply from Indonesia and other reasons. Wikileaks, however, has revealed more or less everything surrounding the delay (and subsequent abandonment) of Island Power in the hands of Intergen:

"For about six years Singapore Temasek and its subsidiaries have deliberately and successfully blocked efforts by Intergen and local subsidiary Island Power to access an offshore gas pipeline between Indonesia and Singapore.  While the GOS was taking public steps to encourage competition and liberalize its gas market, Temasek was working hard to block potential competitors (ref D), claimed Michael Reading (protect), Managing Director of Island Power.  Reading said that Temasek at various points threatened personal defamation lawsuits, claimed it "controlled the government," and pledged to "frustrate" Island's efforts to operate in Singapore."

Debt Watch - Singapore

Following in the footsteps of the debt master Professor Steve Keen, I am starting an amateur analysis of Singapore's debt levels and debt trends.

The first chart for analysis is a plot of Singapore's consumer housing debt - as extended by banks (data from MAS) vs Singapore's GDP (singstat). I am able to get only four data points from singstat for GDP (if anybody knows how i can get a more detailed time series pls let me know), nevertheless a plot of housing debt vs. GDP shows a clear trend:

There is a major omission from this chart, and that is the debt that is extended by HDB to purchasers of HDB flats. MAS only releases data of loans made by banks, and not loans made by HDB. So we have to use educated guessing estimate the HDB debt. (if anybody knows how i can get my hands on this data, please let me know. thanks)

Ex Brigadier General Now CEO of GLC Engineering Subsidiary

Keppel Integrated Engineering Ltd (KIE), the wholly-owned environmental engineering arm of Keppel Corporation Limited, has appointed BG (NS) Tay Lim Heng (郑林兴) as its Chief Executive Officer with effect from 1 January 2011.

Prior to joining KIE in June this year (barely 6 months ago), Tay had absolutely zero experience in the field of environmental engineering, which includes Waste-to-Energy (Incineration) engineering and Water/Wastewater engineering. Instead, BG (NS) Tay was the Deputy Secretary (Development) of the Ministry of National Development (MND). Prior to that he was the Chief Executive of the Maritime and Port Authority of Singapore and had held various key appointments in the Singapore Armed Forces (SAF).

The construction of Waste-to-Energy plants involves intricate knowledge of civil, mechanical and electrical engineering. Meanwhile, the field of water & wastewater engineering requires intricate knowledge of chemical & water engineering. It is challenging enough for engineers to master ONE of those two businesses, let alone both. Witness, for example, Hyflux's single-minded focus on membrane-based water purification technologies.

Yet, amazingly, according to outgoing CEO Michael Chia, Tay Lim Heng has managed to "[adapt] very quickly to the environmental engineering business" and master both fields within a short span of 6 months, something that would normally take others a life time to do.

KIE is indeed privileged to have an esteemed member of Lee Kuan Yew's "intellectual class" as its captain going forward. I personally look forward to seeing what Scholar-General Tay has up his sleeve as he brings KIE into the 21st century.

Time for Lee Kuan Yew to learn from Deng Xiaoping's Legacy

Singapore has been touted around the world as an economic miracle. Lee Kuan Yew, the CEO and Chief Marketing Officer of the country, has been held up high as a model statesman of the island state and Asian Economic Tiger. The PAP government likes to boast about how Chinese officials come to Singapore to learn from the ruling party about how to run a nation. Lee Kuan Yew was not afraid to boast about Chinese officials wanting to run their country the way Singapore does [link].

Yet, Lee knew that China would soon rise to the world stage and surpass what little Singapore could ever accomplish. Instead of China learning from Singapore, Singapore would be learning from China. The elder Lee once said to Deng Xiaoping [link],

‘Whatever we can do, you will do better. We are the descendants of the landless peasants of South China, you have the literati, you have the top brains, you have the poets, the artists.’

Indeed, the time has come for Singapore's political elite to take a page out of China's economic leadership.

Behavioural Psychology Proves that Greed-Driven PAP Ministers' Compensation System is Fundamentally Flawed!!!

The following short video is an animation of Dan Pink's talk on motivation and what drives people. It is based on the discoveries of Behavioural Economists and is key to this post so please take a moment to watch it. It is fantastic to say the least.



The key discovery by the Behavioural Economists is that:

1. As long as a task involves only mechanical skill, monetary incentives correlate with performance i.e. higher the pay the better the performance.
2. Once a task involves even rudimentary cognitive skill, a larger reward leads to poorer performance !!!

Measures that PM Lee SHOULD Have Announced, But Didn't

There's a huge hulabaloo on the internet about PM Lee's national day rally speech and the measures he has announced and why they are crappy and inadequate. I agree generally that it was quite a crappy speech and some of the measures announced were silly and reveal that even right now with all the clanging on the internet and the growing resentment on the ground, the PAP still has no clue.

But instead of criticising PM Lee and joining in the chorus of why the PAP is fucked up, I shall instead propose SOLUTIONS to the problems facing our society today.

$387m Budget Understates Cost of YOG to Singapore Society

It has been widely reported that the original $104m budget for the YOG ballooned to a massive $387m. These are the direct financial costs of the YOG. However, the following are a few hidden costs of the YOG that, if we were to estimate and put a monetary value on them, could significantly blow up the total cost of the YOG to Singapore Society as a whole.

Firstly, if we were to calculate and add the monetary value of the thousands of man-hours of unpaid forced labour that Secondary, JC and Polytechnic students, as well as their teachers, have to contribute to the YOG, that would add a significant sum to the YOG black hole.

Secondly, consider the opportunity cost of the time spent by these students in the YOG, which they could have spent studying or other productive activity. Some students' grades will definitely suffer because of the time they have to spend on this event. This cost of the YOG has obviously not been factored in.