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Archive for the ‘Infrastructure’ Category

Safe? Are you sure LTA?

In Infrastructure, Political governance on 10/03/2013 at 6:32 pm

Sinkholes happen when a layer of rock underneath the ground is dissolved by acidic water.

Usually this layer is a soluble carbonate rock, such as limestone or its purer form, chalk …Typically rainfall seeps through the soil, absorbing carbon dioxide and reacting with decaying vegetation. As a result, the water that reaches the soluble rock is acidic.

The acidic water causes the erosion of the soluble rock layers beneath the surface – eventually creating cavernous spaces.

The soil or sand over the limestone collapses into a sinkhole when it is no longer supported because of the cavity below. This final collapse of the surface might take anything from a few minutes to several hours. Read http://www.bbc.co.uk/news/magazine-21600410 for more details on how they occur.

After reading the article, I’m left wondering how LTA can be so confident that the other lanes are safe*? Ain’t the other lanes sited on the same piece of land? It’s that to imagine that the hollow in the ground coincide with the lane: surely the hollow, if any, is spread over several lanes? As the article points out, holes can appear suddenly and unexpectedly, when there is a “tipping point’.

And if other sinkholes appear on other lanes: another “honest mistake”?

But let’s be fair, if the LTA had closed sections of the road while it conducts tests, and then found no other problems, the “Govt are bastards” brigade on Facebook, TRE, TOC, TRS and the internet would have a field day. And S’poreans who were inconvenienced by the road closure would bltch like bleating lambs too.

In first-world democracies, the emphasis would be safety over convenience, partly because govt’s and officials are afraid of lawsuits when people die. Here the culture seems to be public convenience over public safety (and cross fingers and hope no one dies). We had one example of this attitude when the public inquiry into MRT breakdowns, revealed that LTA was upset when SMRT wanted to extend disruption of service to conduct more checks. And the bitch brigade bitched when a minister dared to suggest that there might be a need to stop services to conduct checks or repairs. Nothing further was heard from him.

A balance has to be struck between public safety and public convenience, and this requires a consensus. Now wouldn’t this issue make a great topic for NatCon? And isn’t this issue connected to the issue of how many people we want here, given our population density. We are among the world’s most densely populated places.

———————-

*The patched-up sinkhole on Clementi Road has reappeared.

The gaping hole is about two-metre wide and a metre deep.

It was fixed on 4 March but it collapsed again on Friday.

A Land Transport Authority spokesperson said the affected lane was closed off immediately for repair works.

They are investigating the cause of the hole and are also conducting scans below the affected portion for any possible cavities.

The other lanes on Clementi Road remain safe. CNA

“WP will vote for the White Paper,” Moley

In Infrastructure, Political governance on 04/02/2013 at 5:31 am

(Update after Auntie’s speech: Moley and I are most happy that we got it wrong. But let’s wait and see. I was happy about being wrong about Punggol East, until Low told us that a vote for the WP is a vote to maintain PAP hegemony)

Given the overwhelming majority of PAP Members of Parliament, there is no question where the debate will be heading – towards a total endorsement of the policy recommendations and continued population influx, despite the message sent to the PAP by the Punggol East electorate and many Singaporeans.

Dear readers, would you vote for your MP in GE 2016 if he or she approves of the immigration targets drawn up in the Population White Paper? (http://singaporearmchaircritic.wordpress.com/2013/01/29/broken-trust-broken-policies/)

Neat idea but what if WP votes for White Paper?

We got to vote for Mad Dog Chee’s elitist Singapore Indian Party SDP*, or No Substance**, or the Clowns Brigade: s/o JBJ, the Saints boy, SDA, or the Chiams, because Morocco Mole tells me that  the WP will vote for the White Paper too. Now Moley has been right about WP refusing to raise issue of public transport nationalisation in parly. (Sorry JG, GG never raised the issue as you claimed. He just asked the govt to justify its rojak policy and then when as you rightly pointed the minister gave an incoherent response, GG didn’t respond with a nationalisation call.)

Sure will have wayang by Drama King PritamS and Drama Auntie (Remember their rants against govt changes to the mandatory death penalty? They voted for the changes on the quiet, juz like PAP MPs. And remember WP voted for the Budgets, despite bitching about the said Budgets).

WP will vote for the White Paper. And unlike all the examples cited above of the WP quietly supporting the PAP, while attacking it publicly, WP is taking a principled stand on the issue. LTK and Auntie have been asking the govt to go easy on the policy of cutting FTs, speaking out against the govt’s policy (now discarded?***) of starving the SMEs of FTs. Chinese-owned SMEs  fund the WP on the quiet, so WP has to keep them happy.

And the PAP (the real deal) has just given WP the best excuse to support the White Paper:

— “Reiterating that the 6.9 million figure should be viewed as “the worst-case scenario”****, Mr Khaw wrote: “We hope we do not reach that figure; we may never reach that figure.”

–“Prime Minister Lee Hsien Loong said … he fully agrees with Mr Khaw’s explanation that a 6.9 million population is not a target, but just a worst-case, aggressive scenario the Government must prepare for.”

“Minister in the Prime Minister’s Office S Iswaran assures Singaporeans that the 6.9 million population figure in the White Paper is not a target the government is setting itself to achieve.”

(Excerpts from MediaCorp)

“6.9m? What 6.9m? Only projection, worse-case scenario, to spur debate leh,” WP Low will say, says Morocco Mole, Secret Squirrel’s side-kick. [This sentence was added an hour after initial publication.]

Which brings me to a suggestion on helping us monitor and assess a MP’s performance (from http://berthahenson.wordpress.com/2013/01/20/a-political-performance/)

Each MP should put up a yearly account to their constituents of what they did or said in Parliament. How many sessions did they turn up for? How many Bills did they vote on – and what did they say about them in Parliament? How many questions did they ask from ministers – both oral and written. What sort of answers did they get – and did the questions work in getting things done? … this keeps constituents politically attuned and keeps the MPs accountable. Simply saying vote for me again (I am looking ahead to the next GE) because I am kind, good, committed etc and my party has done what and what… isn’t good enough. Thing is, what have YOU done lately for me as my voice in Parliament?

But I doubt WP would adopt such a first-world practice of transparency and accountability. It would make transparent the WP’s two-headed snake strategy of being all things to all voters.

If ordinary netizens want the WP to vote against the White Paper, please start sending a strong message to the WP: use TRE, even TOC, or email direct to WP.

*I mean both SDP candidates were highly qualified Indians from very, very privileged backgrounds. They couldn’t claim, like s/o JBJ, that they were rich kids made poor by the PAP. But maybe they could argue that their families have been wealthier if the PAP had not come into power? Seriously, maybe the SDP is an elitist party that believes “multiracialism” is more than “an aspiration”: the voters are colour-blind? Says a lot for SDP’s idealism vis-a-vis that of the PAP and WP.

**NSP is getting its act together policy-wise: a good piece on population, responding to the White Paper   http://www.tremeritus.com/2013/02/02/nsp-proposes-alternative-population-plan-for-singapore/. And in working the ground. The problems lie in internal bickering and giving the WP the excuse to “knife” the NSP. An example of the latter: a prominent blogger who juz happens to be a NSP member was very vocal in his attacks on the WP’s leaders and followers during the recent by-election campaign. He accused them of PAP-like arrogance. (Even I won’t go that far in criticising the WP.). While I’m sure, the NSP had no hand in his attacks, which sounded as though they were written by s/o JBJ, it could cause trouble. NSP had no quarrel with WP over the by-election, yet its member felt free to attack WP. Low is very correct in telling his activists to toe the party line on the internet and social media. It could lead to misunderstandings. The WP now has the perfect excuse to move into Tampines, Marine Parade, Kallang and Mountbatten: a NSP member savaged WP on the internet and the NSP kept quiet would be the WP excuse.

***I’m confused. Cutting FT supply but by growing it?

****Shades of Yaacob, Remember he said this when one LKY shouted a Hard Truth about Malay Muslims.

SMRT: Dump

In Infrastructure on 31/01/2013 at 5:15 am

Brokers had forecast cost increases in staff, repair and maintenance costs, but not the 29.1% in maintenance & repair; and the 18.2% in staffing costs (all those new recruits from SAF?*) reported this quarter.

Brokers are putting a target price of around 1.34, a big drop.

But maybe there is the usually Biz School approved front-loading of costs, expenses whenever there is a new CEO. For yield buyers like me, the next Q’s numbers are awaited.

——

*https://atans1.wordpress.com/2013/01/21/smrt-noticed/

 

 

 

More FTs on way, a lot MORE!: DBS

In Economy, Infrastructure, Political economy on 22/01/2013 at 6:29 am

OK, OK, I exaggerate: only 8% more of population if S’poreans don’t start breeding like rabbits.

DBS Vickers expects an upcoming white paper on Singapore’s population to raise its population target to 7 million from 6.5 million, which will benefit construction, land transport, property and healthcare companies. http://www.reuters.com/article/2013/01/18/markets-singapore-stocksnews-population-idUSL4N0AN3GR20130118

SMRT is not on the “buy” list. It too has concerns about SMRT, like me and many others.

SMRT: Noticed?

In Infrastructure on 21/01/2013 at 5:45 am

I had planned to blog on the new appointments http://www.sammyboy.com/showthread.php?138562-8-New-hires-to-get-SMRT-on-track-4-from-military but forgot until today. Old age.

Noticed that SMRT has created seven new posts? Looks like Kuekie wants to spend, spend, spend on expanding management.He must think SMRT like SAF, money not an issue.

Taz two reasons to avoid the stock. The only reason to buy is to capture the gains from increased fares. But I’m not sure if fares would be allowed to rise this year, let alone this side of next GE: unless there is a marked improvement in service.

And speaking about service, on Boxing Day, for the first time ever, I couldn’t board a train because it was full: I didn’t have the right to board a crowded train, it was too crowded. It was at noon at Bishan. Note, I avoid using MRT and buses during rush hrs. And on Boxing Day and 31st Dec, there were problems when I used the NE Line.

SMRT: Buying target price

In Infrastructure on 20/12/2012 at 7:03 am

OSK DMG has a target price of $1.60 (6% above current price) and a Neutral call. I’ll monitor price to see if it falls to below or near that level. And then evaluate it to see if worth buying for dividend yield. The CEO’s talk of getting rid of FT drivers’ supervisors, could if carried out herald a change of culture.

BTW broker has a  Nneutral” call on the sector, with preference for ComfortDelGro (S$1.72 BUY TP S$1.85) for its cheaper valuations and overseas growth potential.

SMRT did not brief FT drivers on labour law?

In Infrastructure on 07/12/2012 at 5:17 am

I’m glad that the four FT PRC drivers that are facing charges for instigating an illegal strike are going to get help from some civic-minded lawyers.

Following the guilty plea by one driver who it seems had no lawyer to advise him, I was dismayed.

I had heard via Secret Squirrel and Morocco Mole that the PRC FT drivers had never ever been briefed on the labour law here: particularly that there was a procedure to be followed before striking. And that SMRT has no documentary evidence that it ever briefed its FT drivers.

So when I read that one driver had pleaded guilty, I tot it was unlikely that these issues,  assuming they were true, or even probable would be raised in public by the drivers.

Now that the remaining four charged drivers have legal advice, if these allegations are probable, they would be raised, in mitigation.

Ignorance of the law is no excuse for breaking the law. But ignorance of the law particularly when it is in a foreign language should be taken into consideration when passing sentence: especially if the employer did not brief its FT employees about the legal process involved in taking industrial action.

As to whether SMRT could have been so dysfunctional as not to brief its FT drivers on labour law, fact is that its HR department is pretty dysfunctional.  “MOM [Ministry of Manpower”] said it has reiterated to SMRT that labour and contractual grievances raised by the workers should be a priority and addressed quickly.” And after all, SMRT only introduced the following after the strike:

— “[T]old its drivers at the sessions that it has set up a 24-hour hotline for drivers to call if they have concerns or grievances”; and

— “They have also appointed liaison officers who can speak Mandarin to deal directly with the drivers, said SMRT.”

(CNA report)

Avoid the stock especially as SMRT’s focus on profit is one of the many factors why SMRT has been facing problems, according to its CEO Desmond Kuek. If the CEO talks like this, you can be pretty sure good dividend payouts are not one of his KPIs.

SMRT: Better not take the bus

In Infrastructure on 30/11/2012 at 5:16 am

(If you are short of time, juz read the last two paragraphs on why taking SMRT buses may be dangerous, otherwise read on.)

TRE reprinted this and Neutral responded as follows:

To be fair, “ex-SAF chief and scholar” was only in charge recently and so not really his problem. More like it’s “Miss colour hair” legacy.

 However, it is interesting to see how he handle this situation and if he applies a military approach, these “strikers” can jolly well go home to PRC for christmas.

I disagree.

Ever since the illegal strike began, SMRT has goofed in its handling of it:

— Came out to say initially 102 didn’t turn up: later said 171. If it got it wrong by 10%, fair enough, but it got it wrong by 67%. If it didn’t know how many drivers didn’t turn for work, it means it didn’t know how many drivers extra it would need. If a transport company can’t keep track of attendance, there is something wrong with its management info systems.

— But maybe it wasn’t the fault of the mgt info system but of the internal communications system?

— Then there was SMRT saying that striking workers were sacked; and then saying more had returned to work the next day. If they were sacked, how can return to work?

— As the law is very clear on what constitutes a strike (minister’s comments), management did not take decisive action in calling it an “illegal strike” until after the minister said so, it seems. This did the constructive, nation-building no favours, forcing it into some contortions to explain the initial non-use of the word “strike”. The media will not thank the management for the public ridicule it got.

And

— SMRT has admitted that “swifter actions could have been taken to improve dormitory conditions”. It should have admitted it could have communicated better with the PRC workers. It said on Wednesday, “the additional pay adjustment of S$25 a month for drivers from China was finalised last week and that it is in the process of communicating this to the drivers.” (CNA). Couldn’t they have told the drivers, before they saw their pay slips?

— The dormitory conditions should not have been so bad. SMRT is a TLC and GLC, not any SME.

— SMRT should have encouraged the FT PRCs to join NTUC. SBS did this. If they were part of Zorro’s gang, maybe things may not have reached this point. As Siow Kum Hong wrote on his FB page, “[A]ctually, i think people go on strike only if they feel disenfranchised and after they think they’ve exhausted other options.”

— As the strike took place when the CEO was away on overseas leave, it showed a lack of foreknowledge of worker unhappiness. Or worse: SMRT knew but CEO couldn’t be bothered to change his vacation plans.

These failings reflect badly on the ex-general, ex-SAF chief and scholar. And shouldn’t he be on the first plane back? After all, first illegal strike in Singapore since 1980 and in a TLC. The CEO was an ex-SAF chief and then senior servant: is this boh chap attitude a reflection of the ethos of public service?Thank God, there was no military or national security crisis during his stint as SAF chief.

Avoid the stock. It’s a dog that has fleas on the dog’s fleas.

And what happens if one of the FT drivers is so frustrated that he turns suicidal when driving a bus full of commuters. Or if he runs amok? Has the ex-colonel and scholar in charge of bus operations tot about the possibility that putting unhappy drivers on the road is endangering S’poreans and FTs. Imagine the damage that pictures of passengers being burnt alive will do to S’pore’s reputation as employers’ paradise?

Better give SMRT bus services a miss if you can. And if you have to take a SMRT bus, better make your will first, and check your insurance cover. Better safe than sorry?

“For they have sown the wind, and they shall reap the whirlwind”

In Economy, Infrastructure, Political economy, Political governance on 27/11/2012 at 6:01 am

Well, well. So 102 FT drivers recruited from China (5% of all SMRT’s drivers) refused to work yesterday, disrupting SMRT bus services. They were not happy about their pay. Happily for commuters using the affected bus services, they agreed to return to work while talks continue.

Whither the FT policy, and LKY’s pride in FTs? Striking was a no-no for workers (except, as I recounted yesterday, when the govt had another agenda). S’porean sheep workers did not strike partly because they were afraid of retribution. Now FTs have led the way and have so far got away with it. They might even get more money. If they do, will locals realise that they too can get away with striking? If immigrants whom LKY respect can strike, why can’t they?

And if S’poreans start striking, will the MNCs move on?

Something for the cabinet, PM and his dad to ponder.

“For they have sown the wind, and they shall reap the whirlwind: it hath no stalk: the bud shall yield no meal: if so be it yield, the strangers shall swallow it up.”

As for SMRT, time to forget about the stock. Management is still dysfunctional, despite having a ex-SAF chief and scholar in charge. Err might even turn into another NOL, where as I have recounted another ex-SAF chief and scholar has run it aground (Search “NOL”  on this site).

SMRT is in the biz of transporting people

In Infrastructure on 16/11/2012 at 6:31 am

TRE republished this and improved on it by adding part of  the newspaper report that annoyed me.

Here are some great comments posted on TRE about the “unprecedented offer”

TheFortyPercent:

The SMRT’s attitude is typical of the legacy left behind by LKY. If SMRT makes a generous compensation, people will throw themselves on to the MRT rails. If we have too generous welfare benefits, people will laze around and not work. If we have good health benefits, people will fall sick, get cancer and not take care of their health. If we don’t pay our civil servants and ministers the highest salaries, they become corrupt. If we don’t have the ISA, people will become militant. If we don’t have a meritocratic law of the jungle system, every Singaporean will become lazy and indolent. If we don’t bring the thousands and thousands of foreigners, Singapore will collapse and your mothers, wives and sisters will become maids. And the list goes on….. It just shows how much confidence LKY and the PAP has in its citizens! No other country in the world in all history has its leaders, as Singapore has, condemned, spoken derisively and rubbished its own citizens. This is the wonderful legacy that LKY has bequeathed to all Singaporeans! His money of course goes to his family and the ten generations of descendants after him.

One Eye Dragon In Your Pants:

Wow, so that’s what SMRT thinks of us. Money grubbing opportunists who would do anything (even getting our limbs amputated!) to get some compensation. Yeah, in their eyes, we are all lesser mortals who deserve nothing. Have they looked at themselves in the mirror lately? If only public transportation isn’t monopolized by SMRT & SBS, I would outright boycott their services.

Truth:

It is shameful that SMRT has such bad social grace to say such words of the public , implying the young Thai girl has a motive to lose her legs to get some money. Are we in some foreign lands where people sell their body organs to get some money ? Then why the need to say such unkind words of your commuters, to the effect that they would intrude on the SMRT tracks and implying try some antics to get some donation.

Lousy public relation, presenting a inhumane image of SMRT. These words are really mean and uncalled for.

Thought those infamous word ” opportunity to make money ” sent to the taxis after the breakdown of the trains last December was bad enough, and now these words. The SMRT never learn, or with a new PR people, has still not got its acts together again.

By the way, why is the PaaPa government making the common folks pay for upgrading and repairs bill $1.1 billion for the SMRT ? The Board of directors( past since 2002 )each receiving $200,000 annually and the chairman $500,000 should contribute their fees to the repair bills if they have some conscience. They failed in their duties as directors, and yet keep this money for private enjoyment . Shame on them, especially on Mr Chew Choon Seng, now chairman of SGX, who was the chairman of the board in 2002 that appointed a wrong unsuitable person to be CEO. They got away scot free, enjoying their director fees privately, but now the taxpayers have to bear with the cost of the repair , through no fault of theirs.

Today had reported that the ang moh FT I tot had joined SMRT had still not joined, and is unlikely to do so: Smart “Talent”. When you have a PR person, unapologetically, saying that $15,000 was an “unprecedented” offer to a girl who lost her legs; and that non-payment policy is to deter people from deliberately losing their limbs or lives  to get money from SMRT, it shows the kind of culture ( “choose not to board crowded trains” and “trains can be packed more” and “opportunity to make money” and “never ever damage SMRT property even if you are suffocating in a train that has stopped, and there is no electricity and you are left in the dark”) he would have to defend about if he signed on. Maybe the previous PR boss, an ex-army colonel, should reapply for his job?

He fits the culture to a “T”, blaming the bad English of the staff for them not communicating with the public. He was the person who also said that SMRT should never ever be damaged. Wonder why did he “move on” if he fitted the culture to a “T”. Goh Chee Kong approved comments like this.

Finally, we get to the title of this post:  SMRT is repositioning itself as an engineering company. I’ve commented on why this may be a bad idea: engineering companies tend to gold plate operations.

SMRT should think of itself as a “Mass Rapid Transit” biz: moving crowds of people quickly, in reasonable comfort and efficiently at low cost. Be like AirAsia, EasyJet or Ryanair, the best low cost airlines: decent customer service at lowish prices. And handicapped and elderly people: take a taxi if you are not happy with the service. Don’t bitch too much. Ryanair tells them in no uncertain terms, not to use it. It tells them there are alternatives.

 

SMRT: $15,000 not enough

In Infrastructure on 07/11/2012 at 7:26 am

Talk of bad PR.

When I read that the Thai gal sued SMRT, I didn’t think much of her case. I tot that she should have accepted reasonable compensation and moved on.

But when I read that SMRT says that its $15,000 offer was “unprecedented”, I tot what a dumb, mean company.

I don’t know waz a fair amount would be taking into account her injuries and that it isn’t SMRT’s fault. But $15,000 is not it. Its legal costs would easily exceed $100,000.

I had been looking to buy shares in SMRT, but I’ll give it a miss for the time being. Want to see if mgt changes are working.

Anyway, hopefully the FT brought in to replace an ex-SAF officer will do something to change SMRT’s bad record in public communications. The SAF officer said once “Better you die, than damage SMRT property”.  Ya I exaggerate, but that was the message he gave when a commuter smashed a glass panel to let air into a train stuck in a tunnel.

Circle Line: the unasked questions

In Infrastructure, Media, Political governance on 28/10/2012 at 6:06 pm

I’m writing this on Sunday evening.

On Saturday morning, I read that replacing the Circle Line ‘s power cables would take 18 months, beginning from January next year.

SMRT said the areas between Dhoby Ghaut and Dakota Stations are more problematic, compared with other parts of the network, as the cables sit in an area that is prone to water seepage from the ground.

SMRT’s executive vice president for trains, Khoo Hean Siang, said there are plans to replace all the cables.

He added: “We want to change out to a higher grade cable that can submerge, (be) more water resistant to make sure … the system will last for 20 to 30 years.” CNA report.

But neither, MediaCorp nor SPH reporters asked:

—  “The North-South Line only started giving serious problems last year. It was opened in 1987. Why is the Circle Line giving problems so soon?”

— “Given the newness of the line, first opened in 2009, and with the latest stations connected just last year, how come the electric cables need replacing so fast?”

— “Why were these cables used?”

— ” As the total cost was nearly S$10bn, not peanuts, by any measure, why were these cables chosen?

— “What other problems could possibly happen, given the cables gave problems much earlier than anticpated?”

— What is the cost of replacing the cables?

— Who is bearing the cost of replacing the cables? SMRT? Or the govt? If SMRT, will dividends be affected? Or will fares have to rise?

And neither did they ask these questions on Sunday. and my Secret Squirrels and Morocco Moles in both these constructive, nation-building media organisations, tell me that tonite’s programmes and tomorrow’s editions will not ask these questions.

These are the questions that the media should be asking. I’m sure PAP MPs  and Lina Chiam will be asking some of these question in parliament.  And I’m sure netizens are already asking these questions. But I’m sure the WP MPs will be silent. Too busy looking at their bank statements to see if the 30 pieces of silver ++ have been paid into their accounts? Taz what my disillusioned Morocco Mole in WP is wondering.

At the very least, S’poreans must be told why the decision to purchase a cable, now known to be sub standard, was made or allowed to be made? Was it an “honest mistake” by someone or an entire organisation, or an organisational failure, or was there corruption?

My very simplistic answer is that in the 1980s when the first lines were being built, one LKY was PM. No-one wanted to explain to him why the trains would not be running on time. The Circle Line was largely built when the PM was one Goh Chok Tong, and his DPM was one Lee Hsien Loong, today’s PM, his chosen successors. Whatever history may say about LKY, the train lines built when he was PM lasted over 20 years, before giving serious problems. Under his chosen successors, the Circle Line didn’t even last fault-free for five years.

Sometimes change is not for the better, even ifthuggish methods of management have been replaced by more civilised, possibly less effective, methods.  

And while there is no longer fear in the air the media breathes, the mental “knucklebusters” still remain in the minds of the media.

Cost effective ways of keeping us healthy?

In Infrastructure, Political economy on 17/10/2012 at 5:36 am

Yesterday, I read that the government is planning to do more to help the depressed and I remembered that I chanced across this (see below) response to an Economist blog piece on escalating medical costs in the developed world. It suggests (among other suggestions) adding various soluble drugs to the water Americans drink as a way of keeping healthcare costs down: one of the drugs is Prozac which is a drug that helps control mild clinical depression. Other drugs suggested are statins and aspirin.

Now that VivianB (a MD) is water minister, he may want to help out the Health minister. These measures seem to be in line with S’pore’s policy of spending as little as possible on health (around 4% of GDP) without upsetting economic efficiency or upsetting the masses compared say to Switzerland (around 8%).  And we already drink recycled water. LOL.

Seriously I hope the SDP looks into these suggestions. SDP has a very gd team of doctors helping out. (BTW what do these MDs have to say about:

this plug for govt health policy;

the latent flaw in any public health insurance scheme; or

innovative ways of helping the elderly in ways that don’t cost too much money?)

(Note writer below is talking of the US, where fluoride is already added to the water they drink. Always wondered why this doesn’t happen here.)

America comes up short in international comparisons of health statistics principally because life expectancy lags despite the highest spending for healthcare. For less than one dollar per capita , I propose Ten Inexpensive Health Interventions WILL Improve Health Outcomes. These will lengthen life expectancy, improve health, increase happiness and decrease dysfunctional behaviors.

We already fluoridate the water to prevent dental caries. And chlorinate to reduce bacteria. We can use the water supply as a medication distribution network by introducing very tiny or trace amounts of medicines that have been known to reduce major diseases.

1.) Simple cheap ASPIRIN dramatically cuts rates of Strokes, Heart Disease and now recently proven in a longitudinal study, reduces Cancer death rates by 20%! Put ASA in the water supply–if would be cheaper than fluoride.

2.) Put STATIN drugs in the water supply. Heart disease and stokes are declining for the first time in history. And it is despite the epidemics in Diabetes and Obesity. It is due to widespread use of effective anticholesterol drugs known as ‘statins.’ ie. Lipitor. High cholesterol is endemic and contributes to strokes and heart attacks. Just about everyone benefits from lower cholesterol.

3.) Water Born Oral VACCINES. Up to 30% of parents do NOT believe in the value of vaccinations and many act on this belief. Utilize water borne vaccinations in the water supply, such as the oral polio Sabin Vaccine. Put Folate in H20 to prevent neural tube defects in fetuses.

4.) PROZAC to decrease Dysfunctional Behaviors and improve Mental Health. Far more common than crime is non-criminal personal dysfunctions. Up to 40% of Americans will experience a diagnosable mental illness in their lifetime including Depression, Alcohol abuse, illicit Drug abuse, Anxiety disorder, PTSD, Obsession-Compulsion, Eating disorders. Half of these will remain undiagnosed. And love ones suffer by enduring the mental ill relative like an affliction. Virtually all these maladies would benefit from Prozac type drugs which increase brain serotonin neurotransmitter. It is a vital tool in psychiatry: ‘Vitamin P’. Put Prozac in the water supply and we will be less sad, less depressed and less dysfunctional. It will shrink dysfunctional behaviors, criminal behaviors, afflictions and addictions. It would save BILLIONS in the Criminal Justice System. Lead to more productive fulfilled citizens who are happier. Less alcohol and drug addictions. Less DUI, trauma and killing sprees.

5.) Perhaps an effective future drug to treat or prevent Diabetes or Obesity–put it in the water. We have a new Epidemic of Obesity never before seen in the history of civilization. All interventions have been stymied to reverse the epidemic. We have to be creative about how to address this problem. The water supply is a simple and effective vector that treats the entire population. Observe the effectiveness of fluoridation on cavities for pennies per capita per year.

6.) Ban Tobacco Products, the leading Preventable cause cancer deaths, heart attacks and strokes. It would cost nothing in health care but would literally overnight vault the US life expectancy over the #1. Japan.

7.) Restrict television broadcasts to 2 hours a night of quality programming from 8 pm to 10 pm. We get 24 hours of 1000 channels–98% is garbage programming. It would force Americans to find other more healthy forms of recreation like walking, exercising, reading and even talking with each other. We undersleep and spend 4-6 hours of waking hours watching TV.

8.) Make Supermarkets reflect a Vegetarian Diet. 80% of floor space for Produce. 10% for dairy. 10% for the meat department. Vegetarians live longer and are more active. We have to make it easier and more desirable to enjoy vegetables Likewise encourage walking, exercise, and activity.

9.) Tax Alcohol extremely regressively to the point that consumers have to hurt to make a purchase. They will value that little sip of brandy or Chardonnay even more. Make bottles much smaller at around 100 ml. Like a Coca Cola at the turn of the century: medical tonic amounts. Yes people can drink, but moderation(less than two drinks) is best.

10.) Milk-Based Nutrition/ Beverages. To increase calcium in young persons, make all flavored beverages and hydration drinks MILK BASED. A milk based Coca Cola. We will see taller, more active, healthier citizens. Perhaps the best way to combat osteoporosis in the elderly is fortifying bones in teen age girls. And using high impact sports like simple rope jumping. This will make a difference in the wide spread osteoporosis of the elderly. Your skeleton will thank you decades later.

This is a radically different way of thinking about Public Health, Medicine and Wellness.

Desperate Times Call For Desperate Measures.

Make Public Health medication an automatic feature by incorporating it into normal plumbing.

Let people OPT-OUT by buying their own water and we will have 95% participation.

We now have an OPT-IN system for medicine that is not working.

Healthcare delivery is a complex problem requiring smart solutions, but sometimes solutions can be as simple as fluoridating water. We need a Fluoridation System for the 21st Century.

SGX/ Bursa M’sia: Back to the future UPDATE

In Infrastructure on 06/09/2012 at 11:12 am

Err spoke too soon of returning to the old days. Today’s BT reports:

KEY questions about the long-delayed Asean trading link continue to confound investors even as the tie-up between the Singapore Exchange (SGX) and Bursa Malaysia (BM) is slated to finally begin in less than a fortnight.

Details about custody, costs and other operational matters are still unclear ahead of the Sept 18 launch, observers said. And while traders and investors on both sides of the border think the link could fly in the long term, no one, it seems, sees an immediate need for the change …  But the implication of the tie-up on basic operational details remains a mystery to many investors and professionals.

Sigh: SGX goofs again? Is SGX paying for Foreign Talents or Foreign Trash? The CEO is ang moh FT, while its president is Indian FT.

SGX/ Bursa M’sia: Back to the future

In Infrastructure on 06/09/2012 at 4:59 am

The Singapore Exchange (SGX) and Bursa Malaysia will once again be reconnected from September 18, allowing easy trading access to investors from both sides of the Causeway.

Thailand will join the system later.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1223777/1/.html

I joined a stockbroking firm in S’pore in 1987. Then M’sian and S’porean shares were jointly listed. Then the two exchanges split and there was CLOB. Then in 1998, CLOB was closed.

While SGX’s FT CEO wanks, KL bags yet another mega IPO

In Infrastructure, Malaysia on 22/08/2012 at 5:30 am

1Malaysia Development Bhd., the state investment company known as 1MDB, plans to raise as much as $2 billion in an initial public offering of its power assets, Reuters reports. The IPO may take place in the first quarter of next year.

M’sia Boleh, what with Felda Global Ventures Holdings and IHH Healthcare completing two of the world’s three biggest IPOs this year. Companies have raised a combined US$5.1 billion in Kuala Lumpur this year, compared with US$2.9 billion in Hong Kong and US$2 billion in Singapore, according to data compiled by Bloomberg.

SGX’s ang moh FT has yet to get on his own bat a mega IPO. Can only talk.

Related rant on ang moh tua kee: https://atans1.wordpress.com/2012/08/15/another-msian-mega-ipo-2/

Another M’sian mega IPO

In Infrastructure, Malaysia on 15/08/2012 at 9:58 am

MMC Corp has hired CIMB, Credit Suisse, JP Morgan and Maybank as the joint global coordinators of a US$ 1 bn IPO of its 51% of power unit, Malakoff Corp, Reuters reports.

Meanwhile SGX’s FT ang moh CEO has failed to attract mega IPOs here. M’sian stock exchange, no FTs there, has had a string of mega IPOs: Felda, IHH (also listed here but no thanks to FT ang moh), Astro (coming) and now this. One of leading bourses for IPOs this yr.

M’sia Boleh! And no FTs to teach locals how to do things.

How SMRT can spend more on maintenance while cont’d paying gd dividends

In Infrastructure on 13/08/2012 at 6:55 pm

Find sponsors for MRT stations Dubai style.

The station at Changi Int’l Airport can be renamed after Changi Airport, or SIA or any airline wanting publicity. Raffles City can be renamed after Robinsons or Westin. Raffles Place can be named after a bank sponsor while Temasek can sponsor Dhoby Gaut.

While new CEO as an ex-SAF chief and senior civil servant (also a scholar) should ensure that the trains run on time (in the early 20th century in the US, retired generals were in demand to run railwa s because the army like the railways were complex organisations), he might not be gd for profits. As I explained here, SMRT is now seeing itself as an engineering co, not a transport co, but problem is that engineers tend to gold-plate their operations.

Peril of being at the cutting edge of high tech, high frequency trading

In Financial competency, Infrastructure on 08/08/2012 at 6:08 am

Trading algorithms are potential weapons of mass destruction: here they blew up their creator.

http://dealbook.nytimes.com/2012/08/02/trying-to-be-nimble-knight-capital-stumbles/?nl=business&emc=edit_dlbkam_20120803

http://www.economist.com/blogs/schumpeter/2012/08/knight-capital-0

And here is SGX trying to encourage more of this type of trading here, which incidentally affects adversely (even if nothing goes wrong) other players esp retail investors. And meanwhile SGX is using SIAS to get heartlanders to play in the casino. I was present when Dr Goh Keng Swee called the stock market a casino.

Another gd reason for moving ministers around

In Infrastructure, Political governance on 27/07/2012 at 6:40 am

In this and this, I talked about one reason why moving ministers around was good: the new ministers can “move on” from their predecessors who because they were the ministers who made the decisions or who were otherwise responsible were in denial, or too defensive about their actions, couldn’t take remedial action: flood prevention measures, and public housing and transport problems. 

The news in the past week, about a major flood prevention project (see below), reminded me  of another reason: a minister who was a dud in another portfolio could turn out to have the skills needed in a new portfolio. VivienB is the person I have in mind. As welfare and sports minister, he was a flop: making fun of the elderly needy, and while refusing to spend more on them overspending wildly on the Kiddie Olympics.

But as water minister he dares to be decisive: approving an expensive but much needed project. PUB’s plans to build a diversion canal and detention tank at the Stamford Canal Catchment to better deal with intense storms. The cost has not been revealed but given that it involves construction work in the Orchard Road area, it will cost serious money.

Well VivianB is not afraid to give it his approval. If Yaacob had been in charge, senior PUB engineers tell me that he would still be thinking about it: asking if they could find cheaper ways of mitigating once in half a century floods that juz happened twice in two months in 2010. After all as an academic, he would say that the events of 2010 could be juz statistical flukes. If so, why spend money unnecessarily based on outliers?

And thinking about it, Yaacob is a good “information” minister. He took his time over introducing a Code of Conduct for bloggers. And now seems to have shelved idea for yhe time being.

We would not have liked it if he had been decisive and autocratic about it. And imagine the egg on the face of the government if he had acted decisively and forced the CoC down the collectively throat of netizens: a CoC that was modelled on the practices of the mainstream media; only for revelations to hit the fan that STOMP used paid “content providers” to pose as citizen journalists, one of them faked a news item, and for the STOMP content team to admit that they are FTs from China?

So PM, let’s move on to yr dad’s policy of moving ministers around and out. No more jobs for life that Goh Chok Tong and you seem to favour.

Reason WP quietly ditched its public tpt nationalisation call?

In Infrastructure, Political governance on 09/07/2012 at 7:01 am

(“Trying to serve residents better, WP ditches manifesto call nationalise public tpt?”)

My WP “Morocco Mole”* (the sidekick of  “Secret Squirrel” in the carton series: bit like Yaw to Low) tells me that at July’s parly seating, GG will again keep quiet on the above issue in the debate after the ministerial statement on the major disruption in the MRT system. Tells me no other WP MP will raise the issue of public tpt nationalisation, as this is GG’s responsibility.

He asked, “Why so cock, when the Commission of Inquiry’s findings  that SMRT was skimping on maintenance can be used to support WP’s election manifesto call to nationalise public transport? Also shows WP can think better than PAP.”

I referred him to this ST report, where it was reported that MPs are lobbying LTA  for better bus services in their wards: all because the $1.1 bn subsidy.

I told him since WP has appointed Ah Huat (remember him?) to co-ordinate its efforts for more buses to serve Hougang and Aljunied, it would be most awkward for him (and WP) to beg LTA, and SMRT and SBS to improve services in WP areas if the WP is publicly proposing to destroy their staffs’ rice bowls. It would have no leg to stand on.

His response, “Tan kuku. Even if Sylvia, Glenda and Angela (remember her?) perform [expletive deleted] on the LTA, SBS and SMRT male managers, and Show Mao [expletive deleted] the female managers, think that they will improve services in WP areas? Why WP so cock?” 

He has a point. SIGH (Victor Hugo: “A traitor always pays for his betrayal in the end.”)

Related post: https://atans1.wordpress.com/2012/05/28/hougang-only-up-to-a-point-lucky/

—-

*Moley is a WP cadre but not on the Central Executive Council,. He is ex-Barisan. He early last week told me that the WP had tabled only one question abt public transport (abt the release of the COI report). He is right. Which makes WP’s silence on this issue more deafening. Look at the topics raised: what the public wants raised for the most.

ASEAN trading platform: Yet another delay

In Infrastructure on 05/07/2012 at 5:46 am

The launch of a proposed cross-border electronic trading link for South-east Asian stock exchanges has been delayed as the participating bourses are still testing the technology and driving investor awareness, according to a joint statement issued on Tuesday.

“The ASEAN Exchanges is currently in the midst of firming up the launch date of the ASEAN Trading Link that is ideal and amenable to the members of the ASEAN Exchanges and its stakeholders,” the statement from the exchanges in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam said.

The stock exchanges had signed a preliminary pact in February 2009 to develop cross-border trading links to cut costs and attract investment. The launch of the trading link – a common platform to enable cross-border order routing and trading across seven exchanges in the six countries – had initially been planned for last month, after it had been delayed from last year, if my memory is correct. 

In May, Bursa Malaysia Chief Executive Tajuddin Attan said the ASEAN link will begin with the stock exchanges in Malaysia and Singapore in July, with the Thai bourse joining in August.

Indonesia: Talking cock is not helpful, helpful

In Indonesia, Infrastructure on 13/06/2012 at 7:32 am

Work on a new deepwater port for container ships on an island between Batam and Bintan is set to begin next year, creating a potential rival to Singapore’s port. The port, on Tanjung Sauh, aims to be a major transshipment center for Indonesia, and is part of the country’s overhaul of its transport infrastructure to cope with growing domestic demand.

http://www.thejakartapost.com/news/2012/05/21/deepwater-port-near-batam-set-rival-singapore.html

Well in 2005, Indonesia annced a major expansion of the port on Batam. It even awarded a contract to a French company. Err nothing ever happened. Wonder if this time, it will be anything different. And remember that Batam has one unused int’l airport. It was built to rival S’pore’s airport in the late 1970s.

Readers will know I’m bullish on Indonesia. But that is despite, not because, of its officials or the government planning agencies.

But here’s one talking cock project that works: using social media to help farmers get info they need http://www.bbc.co.uk/news/business-18193993

SMRT: OCBC further justifies its “Hold” call

In Infrastructure on 20/05/2012 at 5:16 am

Remember that with the exception of JP Morgan and OCBC, all other brokers are calling a “sell” on SMRT. Only Morgan And OCBC were SMRT bulls.

Share price has held steady since results

As for SMRT’s share price, it has held steady despite initial selling pressure following its weak FY12 results, and has managed to outperform the FTSE STI Index over the past two and a half weeks (-0.9% vs. -5.3%). While the COI continues its public hearings, we deem the possibility of further sharp sell-offs to be remote as SMRT services and its operational cash flows remain in demand and resilient.

Maintain HOLD

We reiterate our belief that SMRT will not have difficulty addressing its higher capital outlay requirements given its existing net cash position and available MTN programme, and leave our conservative 60% PATMI dividend payout ratio estimates unchanged. Maintain HOLD with a fair value estimate of S$1.71.

http://yieldstocks.reitdata.com/2012/05/17/smrt-ocbc-3/

SMRT: “Cowboys” were right

In Corporate governance, Infrastructure on 14/05/2012 at 8:52 am

Since the trains started breaking down towards the end of last yr, bloggers and posters (not I) have been attacking SMRT for putting profits before safety, and disregarding the engineers’ advice (though without having a clue abt the said advice). Yacoob’s exemplar for the new media, the constructive, nation-building media were deafening in their silence on this national issue. I was silent because I was trying to figure out if I shld go buy some SMRT shares.

Well, based on the comments by the chairman, Koh Yong Gua, reported by ST and ST’s headline on an inside page, the inhabitants of cowboy towns were correct. (Explain that Yacoob and DPM Teo.)

“SMRT to refocus on its engineers” read the headline. This implied that SMRT had lost its focus on engineers somewhere along the line, assuming it once had such a focus.

Mr Koh said that “SMRT will be repositioned an engineering company”, begging the question “What was its earlier positioning?”. Retailer, property developer, financial engineer, or cash cow for Temasek? Since SMRT was listed in 2000, Temasek has received $694.3m in dividends (I’ve including the dividend declared recently).

The promotion of Mr Khoo Hean Siang in March 2011 to COO was meant to show the importance of engineers, he said. The previous COO who was “removed” was not a technical person. Wonder what was he? Ex-SAF officer or financial man? With the CEO a retailer, it surprises me that until 2011, the COO was not a technical man. And that board meetings did not include a very senior engineer in attendance.

Actually, I think Mr Koh still hasn’t got it. SMRT is not an engineering company. It is a company whose main business is moving large numbers of people around S’pore safely, and in reasonable comfort (most of the time). By focusing on engineers and positioning SMRT as an engineering company, he could be laying the seeds for a serious problem somewhere along the track. Investors in the West have found that companies dominated by engineers tend to goldplate processes and systems. Siemens, Rolls-Royce, Westinghouse, Boeing, Airbus and even GE, had to be run by non-engineers before shareholders benefitted.  

Commuters may say so what? So long as it is safer and doesn’t breakdown, power to the engineers. The problem is that goldplating is expensive, and eventually someone has to pay. This is likely to be the commuter (via fare increases) or his avatar or alter ego the taxpayer.

I was planning to buy into a rights issue when one is annced, as I expect. But given the positioning as an “engineering company” and its “refocus on its engineers”, I think I’ll give the stock a miss for the time being. But never ever bet against Temasek when it comes to a local company.

Related post:

https://atans1.wordpress.com/2012/05/06/smrt-quiet-re-nationalisation/

SMRT mgt failures: What does it say abt SAF?

In Infrastructure on 11/05/2012 at 10:19 am

“The experts questioned having the bus bridging services ply a route mirroring the entire train line as this may not be the most effective way to move people. They suggested that the bus bridging services should ferry commuters to one to three stations, or to the next working station.”

Huh? Having been lucky enough not to kanna caught in one of these disruptions (my 87-yr old mum on her only second MRT outing was at a station when a disruption occured), I’m surprised to learn that this wasn’t done or that it isn’t now SOP?

Given that it is a well-known fact, I believe, that retired SAF officers are given senior jobs at SMRT (presumably because they have the experience of managing large and complex organisations), I’m surprised that foreign experts recommended the following “fairly common sense and not rocket science” command and control procedures:

http://www.todayonline.com/Singapore/EDC120510-0000079/Foreign-experts-give-tips-at-SMRT-inquiry

http://www.channelnewsasia.com/stories/singaporelocalnews/view/1200227/1/.html

We need genuine Talents to help us run our public transport systems, not ex-SAF officers, M’sian PRs or PRC bus drivers that we have been getting. And no “ang moh tua kee” attitude when getting Talents please. Hongkies, Japs, Taiwanese and Koreans who speak Inglish should be considered. No PRCs because China’s MRT systems are very new.

As to our defence, are we spending money foolishly on hardware, when what we need are a few good men? The government should be worried. It’s not us “lesser” citizens are at risk. It’s the FTs and rich S’poreans who need protection. An Indonesian pirate chief after reading of SMRT’s failures despite employing retired SAF colonels, may be tempted to raid Sentosa Cove, plunder it and kidnap people.

SMRT: Quiet re-nationalisation

In Infrastructure, Political governance, Temasek on 06/05/2012 at 7:34 pm

(Or “SMRT: Has the government and WP switched positions on the quiet)

On Friday, SMRT reversed its recent losses and was up 0.9% to 1.65. It was at 1.81 juz on 24 April.

Interestingly among the slew of brokers’ reports calling it a “sell”, “nationalisation” seems to be a dirty word, never raised except by two honourable brokers. Only Citigroup was willing to hint at re-nationalisation, “We’d even dare conjecture a Government-led end game, while only Kim Eng suggested that “selective nationalisation” is already taking shape, “A hybrid model, where the Government comes in to inject money, is perhaps the best model possible under the circumstances … like selective nationalisation where the Government pumps in money in certain areas … being done already – take for example, the Government co-paying for the buses to help operators expand the fleet.”

UBS said SMRT is highly likely to move to a new rail-network financing framework where it would pay the government for an operating lease instead of owning train assets,

And only Citigroup is willing to hint at, “We sense more drastic actions are needed, perhaps raising capital to shore up finances.” In simple English, it says a rights issue is possible. Everyone else was silent on this pink elephant in the room.

I think a rights issue is very highly probable.

Let’s go thru some numbers. At Friday’s close, the mkt cap of SMRT was $2.49bn., of which $1.35bn can be attributed to Temasek (It owns 54.3% of SMRT).

Now SMRT has plans to spend $900m over the next eight years and it wants LTA (i.e. the taxpayer) to share the cost. What if the government tells SMRT that it shld fund two-thirds of the cost because the Commission of Inquiry finds that SMRT was not maintaining the tracks properly. (I’m assuming the COI makes this finding based on the way the inquiry is going).

To fund this $600m, SMRT’s directors call for a deeply discounted rights issue to raise $600m (about 24.1% of SMRT’s mkt cap as of Friday). Add to that they say that dividends will have to be cut drastically*, and that Temasek has agreed to underwrite any shares that minority shareholders refuse to take up. Temasek will say that its decision to support the rights issue is a “commercial decision” of a long-term shareholder. Right, and pigs can fly, a leopard can change its spots, KennethJ and TJS can stop boasting, Chiam can renew the SPP’s leadership, and Yaacob can tame the internet tsunami by building a CoC flood wall.

In such a scenario, Temasek could end up with 75-80% of SMRT, as many minority shareholders decline to take up their shares because of the reduced dividend payments.

Ain’t this partial re-nationalisation? And Temasek can have its cake and eat it too, depending on whether the other shareholders subscribe to the rights. Since SMRT was listed in 2000, Temasek has received $694.3m in dividends (I’m including the dividend declared recently). A $600m rights issue and assuming it has to take up all the rights shares still leaves Temasek $94.3m ahead. Might as well make it $700m rights call then, shall we?

Ain’t nationalisation of the public tpt system in the WP’s manifesto (I’ve blogged on this and that the transport minister parrots his predecessors’ defence of the rojak “for profits” system). Lucky Tan has this video of my friend Eric Tan then a WP member (and treasurer) talking abt nationalisation at the last GE. So the silence of the WP which I’ve raised before) is strange, and in the longer term worrying (No can trust its manifesto promises, why shld voters trust the WP?).

So I hope in the May session of parly, GG for one can raise the issue of nationalisation and put the government on the defensive. Why GG? In July last yr, he wrote this on nationalising the public tpt system. This was after Eric Tan had left WP in a huff, so the call for nationalisation of the public tpt system did not end when Eric Tan left.

If the WP remains silent on nationalisation of the public tpt system, it would remind me of a Sherlock Holmes mystery:

Detective: “Is there any other point to which you would wish to draw my attention?”

Holmes: “To the curious incident of the dog in the night-time.”

Gregory: “The dog did nothing in the night-time.”

Holmes: “That was the curious incident.”

BTW, OCBC (a ex-bull on SMRT) is still relatively bullish. It downgraded SMRT to hold from “buy” and lowered its target price to S$1.71 from S$2.04, citing weaker-than-expected earnings for 2012 because it estimated that SMRT’s capital expenditure in 2013 will rise to S$500 million due to higher expenses needed for upgrading its assets.

CIMB cut its target price from $1.68 to $1.50, suggesting a switch to ComfortDelGro to maintain an exposure to the land transport sector. Deutsche cut its target price to $1.61 from $1.75 while J P Morgan downgraded the stock from “overweight” to “neutral” with a target price of $1.60. Phillips cut its target price to $1.33, maintaining its “sell” call. I suspect Phillips is right. A rights issue will be priced at around the $1.33 level.

I’d buy some shares then. Never bet against Temasek when it comes to a local counter.

——

*”Some [analysts] expect SMRT to cut its dividend payout from 70-80 per cent of profits historically to at least 60 per cent.” (BT). What if this was reduced to 25%?

SMRT: Dividend of 5.7 cents but price down another 2 cents

In Infrastructure on 02/05/2012 at 7:22 pm

From the day last week when SMRT annced its eight-year $900m programme to upgrade many infrastructural and systems components on the North-South and East-West lines would exceed what it had spent on repairs and maintenance in the past 10 years, and

– no details on how the cost will be co-shared with the Land Transport Authority (to be negotiated); and

– no details on many parts of the upgrading programme,

till Monday, its share price fell 7.2% from 1.81 to 1.68. It then annced its results (not gd as expected) and today closed at 1.66 down another 1.2%. It went as low as 1.63. All this despite paying a dividend of 5.7cents a share or 3.4% of Monday’s close. (Mkt was closed on 1 May.)

Starting to look interesting as a dividend stock with recovery prospects. Time to analyse results in detail.

Mean of me, but I can’t resist reposting OCBC’s note dated 9 April when stock was at 1.74 and OCBC reiterated its “buy” call.  

————–

OCBC report on SMRT dated 9 April 2012

Strong selling pressure as anticipated by more than half of the street failed to materialise with the counter trading tightly range-bound for slightly more than two months.

During this period, SMRT has also kept to a lower profile with the announcement of work completion from its Internal Investigation Team as the only major development.

Ahead of the upcoming earnings release at the end of the month, we continue to stress that SMRT is likely to see an upswing in fuel costs, following the run-up in prices as well as the additional train runs commissioned in the face of higher ridership and public pressure.

Coupled with higher staff costs related to seasonal merit increments and additional headcount to meet service requirements, we are likely to see the weakest quarterly performance for FY2012.

In terms of fallout from the December 2011 service disruptions, we do not expect any incremental costs at this juncture as the more important inquiry by the Committee of Inquiry (COI) has yet to be completed.

While SMRT’s FY2012 results are likely to stay uninspiring, the counter’s attractiveness as a dividend play remains its key selling point. SMRT’s management has maintained and reiterated its commitment to maintain its dividend payout policy.

Although its prospects going forward will be challenging – COI findings, no fare increments – SMRT’s ‘customer’ base is still growing.

Ridership levels continue to grow especially with support from the current trend in COE prices, while rental and advertising yields are naturally competitive given the high foot traffic locations of their stations.

With this backdrop and earnings support and stabilisation in SMRT’s price, we continue to call for an attractive entry point for SMRT.

Maintain ‘buy’ at an unchanged fair value estimate of $2.04.

Integrating FTs: It’s our problem now cont’d

In Infrastructure, Political economy, Political governance on 02/05/2012 at 5:50 am

Remember a few days ago I ranted abt the comment by DPM Teo* that, “Singapore needs to pay extra attention to facilitating the new immigrants who are ready to sink roots here, so that they integrate into society more quickly … urged Singaporeans to do their part to make newcomers feel welcome, and to help them imbibe the values that have made Singapore strong as a society”? It was the fault of the governing PAP, so it should fix it, not pass it on to us.

Well this morning, while scanning thru BBC Online, the following comment by France’s president leapt at me,  “Our system of integration doesn’t work. Why? Because before we were able to integrate those who were received on our territory, others arrived. Having taken in too many people, we paralysed our system of integration.”

In view of DPM’s Teo  passing-the-parcel, our problematic MRT system, crowded buses, and expensive public housing one could say that his words describe what has happened here.

——————————

*I think he is one of our “betterest” ministers along with Tharman, Khaw and VivianB (so long as you keep him away from the poor and needy and give him engineering tasks). Gan, Chan and Tan seem to be coming along nicely.

SMRT: Reality hits shareholders

In Infrastructure on 26/04/2012 at 7:47 pm

SMRT is down another 2% today closing at 1.70 (-o.o35). It was down 4% yesterday (Wednesday) closing at 1.735 (-0.075)

Well with Tuesday’s announcement that SMRT’s eight-year $900m programme to upgrade many infrastructural and systems components on the North-South and East-West lines would exceed what it had spent on repairs and maintenance in the past 10 years, and

— no details on how the cost will be co-shared with the Land Transport Authority (to be negotiated); and

— no details on many parts of the upgrading programme,

the sell-offs were to be expected.

What was surprising was that the stock was trading 1.81 on Tuesday  As I mentioned here last week, I was surprised that the stock had not fallen after the most recent problems on the Circle Line. In fact the stock had gone up since 9 April , when OCBC called a buy at 1.74. This despite the ongoing inquiry had yet to allocate blame, and no announcements (then) of spending plans to maintain and upgrade the system so that it would be fit for purpose.

Mkt in SMRT shares was not efficient.

Seeing the funny side of SMRT’s woes (Part II)

In Infrastructure, Political governance on 19/04/2012 at 7:19 pm

(Part I)

I also had a laugh when despite Second Solicitor-General Lionel Yee pointing out from the start that the inquiry looking into the December 2011 breakdowns “is not an adversarial proceeding but a fact-finding one”, the lawyers for LTA and SMRT put the blame on each other’s client.

(Leading to a Voice to comment, “Since it has been stated upfront that the proceedings are non-adversarial, why is there a need to hire expensive senior counsel, some at the expense of taxpayers? … SMRT Corp and the Land Transport Authority must have competent senior officials who are capable of assisting the COI with the investigations.”)

I can understand SMRT wanting to evade responsibility for commercial reasons. It could be fined heavily, and made to spend more on maintenance, depriving it of revenue to pay management bonuses and shareholder dividends. But should be so be so aggressive trying to pin the blame on SMRT. Scared of showing LTA was less than competent?

LTA’s lawyer Andrew Yeo, from Allen & Gledhill, took issue with the SMRT’s maintenance regime which could be improved, although it was “comprehensive and satisfactory”.

Citing a report by the transport operator’s internal investigation team, Mr Yeo said: “SMRT’s maintenance expenditure and manpower headcount for the maintenance of trains and trackways has not been increasing in recent years, at the same rate as the increase in kilometres travelled per train,” said Mr Yeo.

According to Mr Yeo, SMRT records showed that there has been a reduction in the number of wheel-profiling works between 2009 and last year even though there has been an increase in incidents of wheel defects over the same period. He also said that SMRT’s maintenance budget had not kept pace with the increasing ridership.

SMRT also “could do better” in terms of record-keeping, especially in the tracking of defects. “That would in turn enable any lapses or deficiencies in maintenance work to be easily detected and rectified,” Mr Yeo added.

Mr Yeo’s comments drew a response from SMRT’s lawyer Cavinder Bull. The Senior Counsel from Drew & Napier asked: “Whose duty is it to do what?”

He pointed out that the infrastructure was technically owned by the LTA. Also, any modifications to the infrastructure “must be submitted to the LTA for their review and approval”, Mr Bull said.

Alluding to findings from a team of experts, Mr Bull said that the SMRT has acted with “appropriate due diligence” in terms of its maintenance and engineering regimes.

Mr Bull added that any wheel defects or third rail gauge variation – which may have contributed to the higher vibrations, which in turn may have contributed to the dislodgement of claws – “did not occur due to a lack of maintenance”.

In fact, he said, the SMRT’s maintenance regime has been more stringent than what is recommended by the manufacturers: The various checks on the third rail are done every three or six months, which is more than the yearly inspection which manufacturers recommended.

Mr Bull also stressed that the dislodgement of the multiple claws which led to the breakdowns was caused by “a rare confluence of factors, none of which individually could have resulted in the incidents”.

Reiterating that it was not the SMRT’s intent “to shirk its responsibilities”, Mr Bull said that after discussions with the LTA, SMRT intends to change all the claws to “fifth generation” ones, which are installed on the Circle Line, as well as the Changi Airport and Boon Lay Extensions. Today article

Seeing the funny side of SMRT’s woes (Part I)

In Humour, Infrastructure on 19/04/2012 at 7:10 pm

With

— a foreign wire, AFP, reporting, “Services were disrupted along a new multi-billion-dollar Singapore metro line on Wednesday, the third straight day of rush-hour delays for the city-state’s gleaming train system”; and

— ST

—— pointing out, “No fewer than five disruptions took place within a week since last Friday, with all of them affecting rush-hour commuters”; and

—— “Statistically, this frequency far exceed the average one-per-week disruption that lasted more than 10 minutes between April 2010 and March last year, and the 0.6-per-week average recorded between 2007 to mid-2009”,

I couldn’t help but wonder if OCBC would change its mind on SMRT because on 9 April, OCBC issued a BUY call  on SMRT which was then trading at 1.74. BTW it closed at 1.81 today, so the recent problems have not affected the share price, another laugh there

—————

OCBC report on SMRT dated 9 April 2012

Strong selling pressure as anticipated by more than half of the street failed to materialise with the counter trading tightly range-bound for slightly more than two months.

During this period, SMRT has also kept to a lower profile with the announcement of work completion from its Internal Investigation Team as the only major development.

Ahead of the upcoming earnings release at the end of the month, we continue to stress that SMRT is likely to see an upswing in fuel costs, following the run-up in prices as well as the additional train runs commissioned in the face of higher ridership and public pressure.

Coupled with higher staff costs related to seasonal merit increments and additional headcount to meet service requirements, we are likely to see the weakest quarterly performance for FY2012.

In terms of fallout from the December 2011 service disruptions, we do not expect any incremental costs at this juncture as the more important inquiry by the Committee of Inquiry (COI) has yet to be completed.

While SMRT’s FY2012 results are likely to stay uninspiring, the counter’s attractiveness as a dividend play remains its key selling point. SMRT’s management has maintained and reiterated its commitment to maintain its dividend payout policy.

Although its prospects going forward will be challenging – COI findings, no fare increments – SMRT’s ‘customer’ base is still growing.

Ridership levels continue to grow especially with support from the current trend in COE prices, while rental and advertising yields are naturally competitive given the high foot traffic locations of their stations.

With this backdrop and earnings support and stabilisation in SMRT’s price, we continue to call for an attractive entry point for SMRT.

Maintain ‘buy’ at an unchanged fair value estimate of $2.04.

ComfortDelgro: Int’l value investor kept selling

In Infrastructure on 18/04/2012 at 6:59 pm

Obviously it is not impressed with ComfortDelgro getting $733m or 67% of the $1.1bn package despite paying the state only 20% in dividends over the years*

Silchester International Investors LLP sold 21.49m shares in Comfortdelgro Corporation on March 30 at an estimated price of $1.56 each. This reduced its holdings by 15% to 123.893m shares (5.92%).

It had sold 42.62m shares from Nov 8 to Dec 12, 2011 at estimated prices of $1.425 to $1.44 each and 63.37 million shares from October 2009 to February 2011 at estimated prices of $1.62 to $1.54 each. Overall, the fund manager’s stake is down by 127.48m shares or 51% since October 2009.

Note the 13% rise in the share price since the second half of December 2011 from $1.385.

——

*The S’pore Labour Foundation (a statutory board affiliated to the NTUC which has 12%) has received dividends of roughly $150.46m from FY2003 to FY2010 (Comfort and Delgro merged in 2003, and SLF had a stake in Comfort.

Oh what a tangled web we weave: MRT, ComfortDelgro and the Government

In Infrastructure on 02/03/2012 at 5:58 am

According to the Christian doctrine of the trinity, there is only one God but God is three persons: the Father, the Son ( Jesus Christ) and the Holy Spirit. But each person is God, whole and entire.

Well our public transport system is some sort of trinity: the government*, ComfortDelgro and SMRT. Except while they are legally separate entities, in practice there is a kind of blending. This makes the Christian doctrine of the trinity easy to understand by comparison.

I’ll use the flow of funds between the companies and the government to illustrate an example of S’pore’s unique trinity at work. Using back-of-the envelope calculations and figures in annual reports, since it was listed SMRT (over a decade ago) has paid S$562.79m in dividends to Temasek, and ComfortDelgro has paid the S’pore Labour Foundation (a statutory board affiliated to the NTUC) dividends of  S$150.46m*since 2003 (Comfort and Delgro merged in 2003, and SLF had a stake in Comfort). The amount that ended up with the government was S$713.25m, with SMRT contributing 79%. But ComfortDelgro is likely be the main beneficiary of the S$1.1bn bus plan**, given that, at present, SBS Transit (a listed co 75% owned by ComfortDelgro) provides most of the buses. Taz an example of how messed up things are.

The funds’ flows also show that the government is putting back all the dividends it received from these two companies and then adding 35% more. So it’s wrong to say that the SMRT and ComfortDelgro are getting free lunches. At most the government is subsidising their lunches by 35%.

The government should get credit for ploughing its share of the “loot” (as the proponents of nationalisation would put it and MPs Puthu, PAP, and PritamS, WP, might put it), but it doesn’t. Taz how messed up are.

(Incidentally, one could reasonably argue that the other shareholders — and the minority shareholders of SBS Transit, remember ComfortDelgro owns around 75% — are getting a free lunch while the government returns its share of the dividends. But let’s not get into that today.)

What a mess. Even the government implicitly accepts that the present “rojak” system of organising the public transport here is not something that it would have introduced, if it had been prescient:

— it is is now planning to publicly funding the bus fleets of Comfort Delgro and SMRT with S$1.1bn; and

— in 2009, the then transport minister, a private sector PAP “catch” (“retired’ after the 2011 general election when the WP almost won the GRC he was helming) that joined the government was trying to fix the system while not admitting that the system was broken even then. (Thank Alex Au’s write-up on this for reminding us what that minister said in 2009.)

So it is no surprise that the the WP’s call in its 2011 general election manifesto to nationalise the public transport system**** is getting a lot of support (the nationalisation, not the WP’s call) from netizens. There may be merit in a nationalised public transport system: instead of being run for shareholders who are only interested in profits, and dividends, the system is run for the benefit of commuters. One of these days, I may run through the arguments. But don’t hold your breath. I think the debate is sterile as it all depends on one’s assumptions and definitions.

Sorry, back to the “rojak” system:  in the short-term, there is a problem of overcrowded buses. And this problem needs fixing. Nationalising the system ain’t as easy as passing a law. Shareholders have to be compensated and this requires valuations to be made, and agreed upon, or adjudicated. And it ain’t as though the shareholders are FTs. As mentioned earlier:

— Temasek owns 54% of SMRT; and

— The S’pore Labour Foundation, a statutory board linked to the NTUC, holds 12% of Comfort Delgro. SLF is Delgro’s single largest shareholder.

(Incidentally these stakes especially Temasek’s controlling stake shows how absurd the system is. S’pore has public transport private monopolies that are partially owned and controlled by the government. And the government regulates the fares and the routes. And as mentioned earlier, the government’s share of the dividends are now ploughed back and added to, but not appreciated by the public.)

Meantime, who is to run the system, and fund the fleet expansion? Public has to wait while these issues are sorted out? It’s OK for those critics who don’t use public transport that often, especially those who have one car per family person. But most S’poreans are not that fortunate.

To me, the government spending on the buses is a pragmatic quick fix both for the public and itself. The commuting public (self included when forced to travel during peak periods, admittedly a rare occurrence) gets less annoyed with the government, while the government is seen as publicly responding positively on a matter of public unhappiness.

As to the concern that the system is being fixed to bring more FTs in, let’s reserve judgement on that. Too early to even speculate. To even speculate, shows the level of mistrust that some people have of this government. I’m not one of them.

So while longer term, nationalisisation may be the best way to run a public transport system, it ain’t a short-term fix. The short-term fix is what the government is doing, throw money at the problem.

Critics should focus on whether the fix is the most cost-effective means of solving an immediate problem, not focus on a possible long-term solution. They should be making a case (not juz asking) for ComfortDelgro and SMRT to make massive rights issues to fund bus fleet expansion. Or asking for detailed details on what taxpayers get in return? Or how to ensure that the other shareholders don’t get a free lunch because of the S$1.1bn package.

Plenty of things to do to keep the government on its toes.

BTW, the full quote in the title is:

Oh what a tangled web we weave,
When first we practise to deceive!

——-

*I’ve simplified: there is a universe within the government — including the Land Transport Authority, the Ministry of Transport, the committee that fixes train and bus fares, the S’pore Labour Foundation, the Minister of Finance (owner of Temasek), the Singapore Civil Defence Force and the police force.

**Dodgy this calculation as I’ve used a dodgy, lazy assumption, but near enough for all but CFAers, or investment analysts, or myself when analysing an investment)

***The government has allocated S$1.1bn to the purchase of 800 new buses, 550 of which will be paid for by the government (that is, through public funds), with the remaining 250 paid for by the PTOs. The S$1.1bn is also to fund running costs over the next 10 years. More on the use of the money, and an assurance that the operators will not benefit because it is a subsidy for us commuters. [Last sentence is an update on @ March 2012 at 9.00am]

****Unless the WP has quietly ditched this too like its benchmarking of ministers’ pay to the poor. I am not being mean or nasty. In January 2012, Gerald Giam had to be reminded in a private conversation where I was present that nationalisation was in the party manifesto for the 2011 general election. GG seems to have difficulty remembering things. He had some problems in parliament during the ministers’ salaries debate.

SMRT: Stating the obvious

In Infrastructure on 01/02/2012 at 11:20 am

At SMRT’s 3Q financial results briefing yesterday, chief financial officer Catherine Lee said that, while “expenses arising from the recent MRT disruptions incurred this quarter were not significant … the profitability of the train operations will be impacted by the consequential costs” in the next 12 months. SMRT has to wait for the Committee of Inquiry to complete its investigations into the recent train disruptions and release its findings before SMRT can make an assessment on how this will affect profits, she said.

For the record — “SMRT posted S$37 million in net profit for the three months ended Dec 31, a 13.9 per cent decline from S$43 million in the corresponding period a year ago, even as revenue rose 10 per cent to S$268.2 million.
The increase in turnover was driven by higher train and bus ridership, higher taxi rental revenue, as well as higher rental and advertising revenue, the SMRT said. But costs surged due to higher headcount after the opening of Circle Line stages 4 and 5 and increased train runs as well as higher energy prices.” Quote from Today.

News submerged in “ponding”?

In Infrastructure, Political governance on 25/01/2012 at 6:12 am

The u/m news report appeared in ST’s Breaking News on 21 January 1012. And a much more detailed version in ST.

=============

Better model to predict floods likely in the near future

It will include 3-D land-height map of Marina catchment area for a start

Published on Jan 21, 2012

National water agency PUB could be using a better flood-prediction computer model in the near future.

It will include a 3-D land-height map of just the Marina catchment area for a start, to predict the direction in which rainwater will flow at ground level during storms, and where flooding might occur.

Such a map, which the PUB has commissioned, will depict land height in that area to within 10cm accuracy.

Computer models now in use only predict how rainwater flows within drains and canals, and the intensity of rainfall they can handle.

=================

So it seems that no detailed studies were done on the catchment area that resulted from the new Marina Barrage.  So how can it be claimed by the authorities that the barrage did not cause the “once in 50 yrs” Orchard Rd floods. They occured twice in two months in 2010. And late last year, parts of Orchard Rd were “ponded”. 

No wonder this news came out on a day when S’poreans  were at the start the CNY hols? It was a gd day to “pond” the news? So did the same PR people who advised the use of “ponding” advise releasing the news on a day it would disappear without trace? If so, VivianB should kick the PUB’s new CEO again, juz as he did over the use of “ponding”. [The last two sentences were only added at 9.00am, hrs after the original posting.]

BTW, the “50-year flood” minister (“Speak to me in English” Yacoob) is now in charge of taming the Internet Tsunami. Can’t solve “ponding”, so moved to handling a tidal wave. Taz meritocracy S’porean-style? He is also a poster boy for a “sacrificing” minister. He was an associate professor at NUS earning at most couple of $100,000. He then became junior minister, with a starting salary of abt a million. Wow some sacrifice!

Investing in Water

In Infrastructure on 14/01/2012 at 9:12 am

 

http://www.reuters.com/article/2011/12/13/uk-waterfunds-investments-idUSLNE7BC01B20111213?feedType=RSS&feedName=hedgeFundsNews

 

Three Cheers for VivianB, Pls Go Yaacob

In Infrastructure, Political governance on 04/01/2012 at 5:31 am

No, I’ve not gone wacko like Quan Yifeng on the three occasions she was found guilty of mischief (twice) or criminal violence (one). (Err wonder if the tea or teas she was promoting had the effect of lowering or raising her wacko EQ?).  But despite all my previous rants abt VivianB, I think he deserves credit for acknowledging that there is a problem with the flood control system along Orchard Road. I mean the new CEO of PUB was in late December still in denial over the matter (S’poreans were complacent according to him, imitating SMRT’s CEO), witness the “ponding” media release.

This was shumething Yaacob refused to acknowledge even daring to claim that the flooding at Orchard Road was the fault of a 50-year flood. Yah great excuse. Two such floods in less than two months.

No but thaz not reason why he has to “move on”. As Arts minister, he is responsible for allowing one Melvyn the Dodger to perform at a venue that belongs to the state. The National Musuem website even had this

Dreaming Debussy : Melvyn Tan, Piano Solo

Venue Exhibition Gallery, Basement
Date Thurs 5 Jan & Fri 6 Jan 2012, 8pm.

Melvyn Tan opens the series …

DPM Teo rightly said years ago , Whether such NS defaulters, who have answered for their offences in Court and paid the penalty, should be eventually accepted back into our fold, is not something that MINDEF can determine. It is for society to decide. And society will also look at whether such individuals, apart from having paid a penalty, are sincerely contrite for having failed to serve our nation, and whether they have attempted to make amends.

(Note that DPM Teo admitted that the Dodger had gamed the system, Melvyn Tan’s case has highlighted an inadequacy in penalties for those who have defaulted for so many years that they are no longer able to discharge their National Service obligations in full. Perhaps MINDEF should have acted earlier. I concede that. But MINDEF will now be acting to address this inadequacy by asking the Prosecutor to press for jail sentences in serious cases of NS defaulters. This will help to send a clear signal that defaulting on National Service is not acceptable.

By allowing Melvyn the Dodger to perform in the National Museum (albeit the Basement), Yaacob is saying, on behalf of the cabinet, that dodging NS is acceptable. Will he and Mrs Yaacob grace one of these nights to show S’poreans that NS is for losers? And as a sign that his sons will give two fingers to their NS liabilities?

Yaacob kanna snookered? As I’ve written, Melvyn … gave two fingers to S’pore, and now to the performing arts elite, he is a heloo. What is beyond me is why the performing arts elite want him back? To put the noses of ordinary S’poreans out of joint? Or because he charges nominal fees because the elite treats him as a heloo, not as the pariah he deserves to be treated as? And why does the government allow this elite to get away with this? Hey PM, the voters have spoken. One FT MP sneering NSers is enough.  Voters also don’t care for self-appointed elites too much.

He was back last year for a concert, but ST didn’t cover his return, so only the artistic elite knew he was back. This year, the elite is determined to make us S’poreans eat crow over him?

SMRT: Ask judge to step down?

In Infrastructure on 03/01/2012 at 5:38 am

PM did the right thing by us S’poreans who use public transport* by appointing a judge that regularly commutes by train as the chairman of the Commitee of Inquiry that willl look into recent train breakdowns. But is this appoitment open to challenge by SMRT?

If SMRT were keen on shareholder value it should ask the judge tasked to lead the Commitee of Inquiry, Chief District Judge of the Subordinate Courts, Mr Tan Siong Thye, to step down because he was reported by ST as saying:

As a daily user of the MRT myself, to and from work for more than 10 years, I share the concerns of many who want to know what went wrong and how to restore confidence in our MRT system.”

He said the breakdowns on Dec 15 and 17 were “quite unprecedented”, adding that “they caused significant disruption and inconvenience to hundreds of thousands of commuters”.

“Such incidents can also potentially pose a public-safety issue if they are not well managed.”

SMRT’s lawyers could cite the legal principle, “Justice must not only be done, but seen to be done”. They could point out that if the judge has been commuting for over 10 yrs (What no can afford car or cab to work meh?), he would have personally experienced the increase in overcrowding and congestation over the years, and that this would prejudice him against SMRT.

(I was an occasional train user but I tried avoiding the trains for the last  few yrs because of the congestion in off-peak hours.  Only since the May GE, have I resumed using SMRT trains during the off-peak periods given the government’s assurances that the trains are less crowded. But it’s all relative. My 88-year mum recently tried taking the SMRT on Saturday mornings around 7.00am. She has returned to taking the bus because she can’t always get a seat even at this time on the train. The bus is almost empty at 7.00 am. If anyone is wondering, she can afford a cab.)

But if SMRT’s lawyers make such a challenge, we could have riots if S’poreans decide to show SMRT and its controlling shareholder, Temasek, what they think of SMRT.

Looks like SMRT is the stock from hell for the time being, just like  Quan Yifeng is the “artiste” from Hell. Buy ComfortDelgro or SBS instead?

*shumething can be right and popular, PAP. Juz because shumething is unpopular, diesn’t mean it’s right, PAP.

“F” word banned by PUB?

In Economy, Infrastructure, Media, Political governance, Tourism, Wit on 27/12/2011 at 6:03 am

Trust a former President’s Scholar to come up with the solution to prevent floods in Singapore. VivianB got PUB to rename “flooding” as “ponding”. Why didn’t Yaacob do this instead of calling a flood a 50-yr event. Well there were two 50-year events in less than two months last year.

Seriously, I don’t think it was VivianB’s idea. Likely to be the new CEO of PUB that is behind the renaming. He after all blames us for the floods, saying S’poreans took things for granted*. I say to him, “Don’t try to deflect blame like SMRT’s CEO who told us to guard the trains when there was a security break-in. PUB did not do it’s job.

Ain’t this renaming juz daft and misleading? PUB said of the heavy rain last Friday “there was no flooding at Orchard Road … However, water ponded at the open area of Liat Towers, the underpass between Lucky Plaza and Ngee Ann City, and the basement of Lucky Plaza due to the sustained heavy downpour”.

Sorry PUB, these places were flooded. The ponds were at least ankle deep, at Starbucks, customers walked on chairs to get out, and shops had to close**.

I’m glad that MediaCorp didn’t buy into this euphemism. They called these “flash floods”, as they used to. As to ST, they tried to be truthful, while keeping VivianB and PUB onside. No wonder SPH is such a good dividend payer, while unlisted MediaCorp continues to struggle financially.

If VivianB and PUB were doing their very best to ensure that tourists are not scared off (Remember that the retail trade is tourist dependent to keep profitable and that the overall economy is heading for a slowdown, if not a recession), they failed as far as Malaysia is concerned.  Bernama reported:

Flash Floods In Several Parts Of Singapore Including Orchard Road

Flash floods hits several areas of Singapore including the republic’s most famous shopping alley, Orchard Road, following prolonged heavy rain in the southern and central parts of the city state Friday …

Nice try guys. But better for the economy, retailers and S’pore’s image if the PUB improved its “ponding” prevention measures, not try to play word games.

—-

*”But maybe we have also become victims of own success. Because we have been so successful, alleviating floods, that we have not seen a flood situation for a long time. So when it came, it did catch Singaporeans by surprise.”  Channel News Asia

**How Today reported the situation

The underpass between Lucky Plaza and Ngee Ann City remained closed yesterday evening. Some shop owners at the ground floor of Lucky Plaza said that water levels were ankle-high, but the situation this time was better than during previous floods.

At retail store Giordano, store in-charge Lyn Molino estimated losses of up to S$7,000 and said that customers were not only deterred by the wet floors but also by the stench from yesterday’s floodwaters. “This is supposed to be a good opportunity for us to have extra earnings but it has all been affected,” she said.

The floodwaters also washed out business at Starbucks and fast-food restaurant Wendy’s, among other establishments, at Liat Towers. Wendy’s manager (marketing and branding) Seng Woon Fa estimated losses of about 60 per cent of the day’s earnings. “We are now just busy cleaning up and hope to resume business as soon as possible … we are still checking if any equipment is spoiled,” he said.

SMRT: Waz missing from board’s apology?

In Infrastructure on 22/12/2011 at 6:34 pm

The directors did not apologise for the racist remarks of a member of their PR team that “one of the reasons for SMRT’s unpreparedness to deal with the disruptions last week was … the bad command of English by SMRT’s Malay and Indian staff.”*

The original allegation was made by a PAP MP and he has not retracted this statement, even though he has apologised for his personal remarks on the quality of English spoken by Malays and Indians. https://atans1.wordpress.com/2011/12/22/smrt-racist-pr-team/

As neither SMRT nor the directors have denied that an employee made this comment to the PAP MP, and the MP has not withdrawn the allegation, the public has to assume that the MP is telling the truth.

They have not also apologised for or clarified or disassociated SMRT from the remarks made by SVP Goh Kong Chee, the head of communications, from which one can draw the reasonable inference that SMRT property must never ever be damaged to save lives even if the emergency systems do not work.   https://atans1.wordpress.com/2011/12/18/smrt-svp-is-great-believer-in-shareholder-value/

https://atans1.wordpress.com/2011/12/17/smrt-another-commuters-can-choose-comment/

SMRT is dysfunctional from the board down.

———

Update on 23 December at 9.05am

BlogTV has come out to both deny that a PR person made a racist remark and at the same implied that the MP was hard of hearing. Either that or, a reasonable inference is that Seng Han Thong is a casual racist to this bones in missing the word “Chinese”.

“A comment was made by SMRT’s Senior Vice President for Communication and Services Goh Chee Kong in response to a question on how SMRT planned to improve its communication with passengers.” This was broadcast over the radio:

““What we’re mindful of is that our people, our staff at the stations and in the trains may not be making sufficient announcements and also good enough announcements. And that’s because our staff of different races, it could be Malay, Chinese, or Indians or any other race, they sometimes find it difficult to speak in English. However we’ve encouraged them to make the announcements and not to worry about that……………………”

— BlogTV Facebook

SMRT: Racist PR team?

In Infrastructure on 22/12/2011 at 9:13 am

Hey S’poreans, don’t juz “blast” PAP “Flame on” MP for his racist comments, “I noticed that the PR mentioned that some of the staff because they are Malay, they are Indian, they can’t converse in English good, well enough, so that also deters them, from (sic) but I think we accept broken English.”

Remember, he was also quoting SMRT (SVP Goh “You die first, don’t damage SMRT property”?). According to Yahoo!, “During the latest episode of “Blog.TV” on Channel NewsAsia on Monday, the MP for Ang Mo Kio GRC had said one of the reasons for SMRT’s unpreparedness to deal with the disruptions last week was, according to the company’s public relations team, the bad command of English by SMRT’s Malay and Indian staff.”

If SMRT does not come out to deny that one of its PR  persons made the racist comment, then we have to assume that the remark was made. Juz like the assumption that SMRT places a higher priority on its property than commuters dying or being put in distress. Remember SMRT never clarified SVP’s Goh comments on damaging its property to save lives if the emergency syatems did not work. They were not working when SVP Goh made his remarks about not ever damaging SMRT property.

https://atans1.wordpress.com/2011/12/18/smrt-svp-is-great-believer-in-shareholder-value/

https://atans1.wordpress.com/2011/12/17/smrt-another-commuters-can-choose-comment/

Phew, glad I’ve not bot SMRT shares yet. What a bunch of inept managers. According to Senang Diri, there are possibly several ex-SAF colonels in SMRT. Our neighbours must be watching with amusement. We may have the “betterest” weopens, but are our officers any gd? Looks not judging by those ex-colonels in SMRT.

Still keep an eye on SMRT. If senior managers are culled, and new gd ones brought in, the stock could be interesting. I’m putting it on my “watch” list.

SMRT v Delgro: Who treats us better?

In Infrastructure on 22/12/2011 at 8:48 am

Depends on what you mean by “us”.

Usually when I have to go to and from Raffles City or Place, or Shenton Way, I take the bus, as it is the most convenient means of transport (driving included).

On Tuesday at about 4.20pm, I was at Outram and decided to take the train to Eunos and then switch to a bus to return home. When I boarded the train, it was full. I was very fortunate to get a seat as I had a heavy load (I had juz bot six books). When it got to Raffles Place, more people entered than departed. But the number entering was light (The slaves don’t leave until 5.30pm at the earliest). But at Raffles City, the train became very packed as masses got in, and not so many left. The train got less crowded at Bugis. But until Eunos it was full (but not packed), standing room only, as more people got off than in And this was at 4.20- 4.40pm!

Now at 4.20 –  4.40pm if I were at Raffles Place or City, I would have no problem getting a seat on the bus. The bus would only be at best three-quarters full of sitting passengers.

Draw your own conclusions.

As an investor, I can draw the conclusion that Comfort Delgro is not extracting full value from commuters. This could affect shareholder value? Management should learn from SMRT. Maybe bring in SVP “Better you die than my train or bus gets damaged” Goh Kong Chee from SMRT*

*OK, OK. I exaggerate a little, but not that much

https://atans1.wordpress.com/2011/12/18/smrt-svp-is-great-believer-in-shareholder-value/

https://atans1.wordpress.com/2011/12/17/smrt-another-commuters-can-choose-comment/

SMRT: Another dumb statement

In Infrastructure on 22/12/2011 at 5:30 am

Is SMRT the place where foot-in-mouthers find jobs. Seems like it.

Here’s another silly, dumb statement that SVP Goh must take responsibility for since he is head of communications. Last week, when SMRT raised its taxi fares it said, “our drivers need a more substantial level of income, not just lower costs or rental rates, in order to cope with the increasing cost of living and higher diesel prices, and continue their businesses”. Also, it had to “keep pace with the fare revision by other taxi operators”.

Juz wondering. Has SMRT tried lowering costs and rentals before raising fares? And if not why not? And ever heard of competing by increasing demand via lower fares?

Also if Mr Goh is the kind of person one gets when one hires a retired SAF colonel and MINDEF spokeman? Trying to justify the need for another FT PR or public communications head, rather than a true blue S’porean.

SMRT: Waz int’l best practice benchmark?

In Infrastructure on 19/12/2011 at 6:11 am

When SMRT, its regulator, LTA, and the government were in denial about

— overcrowed trains; and

— security,

the CEO, Ms Saw Phaik Hwa , was allowed by all three to get away with remarks like, “Not as crowded as in Tokyo leh”*, and “Other places got security lapses too”* and “People can board the train, it is whether they choose to” despite the howls of upset commuters.

Well now that we have three serious disruptions (one “immensely serious” according to the transport minister) of service within the space of four days (And the second breakdown in three days on the North South Line. Whoever said, “Lightning never strikes twice on the same spot”?), shouldn’t S’poreans be told what are the international benchmarks of best practice when it comes to disruptions of service for a city the size of S’pore in the developed world? And what are the benchmarks in Hong Kong and Shanghai? And the frequency of breakdowns in HK and Shanghai? And what the train operators in other cities pay for maintenance, as a % of their pre-tax income.

True as this is S’pore (not Ms Saw’s beloved country, Malaysia**), we should aim to better these benchmarks. But, if we want to beat them, we should know what they are. After all, if the CEO can make comparisons with other cities when it comes to overcrowding and security, it is only fair that other comparisons be made.

Hopefully, the SMRT, LTA or the government can tell us what these are. If not, then what about the constructive, nation-building local media? If not then the netizens of the Wild, Wild West have to do their part, as usual.

Trumpets pls. I was right,  “Commuters have a choice. They can have more trains or less breakdowns. They can’t have both.” (See our MSM reports, “MRT trains to go slower, frequency reduced”.)

https://atans1.wordpress.com/2011/12/16/commuters-have-a-choice-they-can-have-more-trains-or-less-breakdowns/

————————————————————–

*Not her exact words.

**She loves M’sia so mich that despite living here since her school days (she is 58), she is still a PR.

Sorry she is 57 going to be 58 soon.

SMRT SVP is great believer in shareholder value?

In Infrastructure on 18/12/2011 at 2:03 pm

Juz wondering if anywhere in any other first world city transport system got someone so dedicated to shareholder interests  like senior vice-president for communications and services, Mr Goh Chee Kong, who said last Friday, “If you are stuck inside a train, never smash the windows or force the doors open. Stay calm and wait for help”.

But what if passengers are in great discomfort or suffocating to death in the dark because the back-up system that was supposed to activate emergency lights within the carriages and provide ventilation was not working? And passengers don’t know when help is arriving because the driver is not authorised to tell them, or he doesn’t know?

Still no smash windows to breath fresher air, Mr Goh?

The reasonable implication of what Mr Goh says is that SMRT (remember he is SVP) prefers S’poreans to suffer great discomfort or die rather than damage SMRT property.

Shareholders will be pleased that they have someone, like Mr Goh managing SMRT, who is so concerned about shareholder value that he would rather people die than damage SMRT property.

I’ll go buy some SMRT shares tomorrow. With managers like him, nothing for shareholders to worry about neh?

SMRT: Another “Commuters can choose” comment

In Infrastructure on 17/12/2011 at 11:08 am

So another failure, the third in four days, and the second breakdown in three days on the North South Line. Whoever said, “Lightning never strikes twice on the same spot”?

And here we have SMRT’s  head of communications telling people, “If you are stuck inside a train, never smash the windows or force the doors open. Stay calm and wait for help. … Senior vice-president for communications and services, Mr Goh Chee Kong, said that in the event of a power failure, there is a back-up system that will activate emergency lights within the carriages and provide ventilation”,  ST reported.

What the FISH! We should be told why the, “back-up system that will activate emergency lights within the carriages and provide ventilation” didn’t work. After all the commuters were suffocating.

Commuters should not be told that they must suffocate to death or suffer in the dark stale air, rather than damage SMRT property, if the back-up system fails to work. The head of corporate communications should know better what to communicate.

Is there any good manager at SMRT?

 

“Commuters have a choice. They can have more trains or less breakdowns.”

In Infrastructure on 16/12/2011 at 6:18 am

Juz wondering whether the recent breakdowns be due to the strain of running more trains during peak hours to appease commuters’ anger abt crowded trains? If so, Ms Saw should come out and say, “Commuters have a choice. They can have more trains or less breakdowns. They can’t have both.”

Could the breakdowns be due to skimping on maintenance to maintain profits in the face of higher oil prices? I mean if SMRT was skimmimg on security, why assume it was not skimping on routine maintence of the system?

If the government will be using NSmen to provide additional security to protect SMRT’s revenue, why not use SAF technicans to help maintain trains and network?

Wonder if the CEO’s and other senior executives’ bonuses are subject to clawbacks? What about the bonuses of senior LTA executives? And whether the bonuses that Raymond Lim received as transport minister will be clawed back too?

Finally wonder what if these breakdowns had occured juz before May GE or presidential election. Potong Pasir would be still in SPP hands? And a GRC or two would have fallen? And would the PAP even get 55% of the popular vote? And Tan Cheng Bock would be president?

The “FTs are betterest” policy is coming to roost.

Comfort Delgro: Give CEO and PR people credit

In Infrastructure, Wit on 08/12/2011 at 8:37 am

Amid all the rubbish and abuse thrown at them, let’s remember that the CEO and his PR team are not like those of SMRT. I hear the lady in charge of public communications, an ex-ST biz editor (must be a rare breed) is one smart lady who likes Victoria’s Secrets underwear.

Taxi users have not been told, “You have a choice. Don’t like our fare hikes, talk a walk, train or bus, or buy a car.”

Instead of complaining so much, if you use taxis and buses a lot,  think of buying Delgro shares to hedge against taxi and bus fare rises. Management in Delgro are smarter than the average SMRT managers.

Update at 10am 8th December 2011

Profit boost for ComfortDelGro unlikely: analysts. Fare hikes not likely to see immediate cab rental revision, they say.

DBS bullish on China infrastructure play MIIF

In China, Infrastructure on 29/11/2011 at 6:19 am

In a note dated 25 November 2011, DBS is bullish on MIIF. Interesting as there is current net cash of about S$115 m and  prospective yield of about 10.5% assuming mgt is correct. My previous post in January this year https://atans1.wordpress.com/2011/01/11/miif-unnoticed-china-play/ reflects my concerns about this stock. But it could be I’m wrong, and DBS is correct. Anyway, nearly a year has passed.

International Infrastructure Fund (MIIF) is now leaner, fitter and wholly Asia-focused … MIIF has divested its non-Asian assets, and repaid corporate level loans with the sale proceeds … a cleaner balance sheet with current net cash of about $115 million.

The sale of stakes in other funds also eliminated the black-box problem (assets with limited financial visibility) and the fund now focuses purely on key Asian infrastructure assets.

MIIF’s three key investments

Taiwan Broadband Communications (TBC), the third largest cable TV network in Taiwan;

— Hua Nan Expressway (HNE), a 31 km urban toll road in Guangzhou, China; and

— Changshu Xinghua Port (CXP), a multipurpose port in the Yangtze River Delta region of China.

We visited these …  impressed by the management and operations … fairly confident of steady organic dividend growth from CXP and TBC, though traffic growth at HNE could face some near-term roadblocks. MIIF [has] used its surplus cash (from the sale of prior investments) to increase its stake in TBC from 20 per cent to 47.5 per cent …  higher dividend receipts from TBC.

MIIF paid out a three-cent dividend for FY2010. After restructuring its portfolio, MIIF is now guiding for a dividend per share of 5.5 cents for FY2011, based on expected cash flow generation plus existing cash reserves (2.75 cents already declared for H1 2011). We expect this is achievable and given the healthy implied yield of close to 10.5 per cent at current prices, we are reinstating coverage with a ‘buy’ call and TP of S$0.64, based on a discounted cash flow valuation of underlying assets. The share buyback programme … provides further support …

Not expecting perfection, minister

In Infrastructure on 22/11/2011 at 7:46 am

Responding to Mr Giam’s question on whether the authorities plan ahead of time, Mrs Teo said that “there is advance planning but projecting demand and ridership is tricky business and hard to get 100-per-cent right.”

Err minister, going by the transport ministry’s and LRT’s track record, no-one is expecting them to get things 100% right. They, after all, makes whoppers like underestimating the traffic on the newly opened Circle Line by 100%.  If analysts in the private sector makes such misjudgements, they’d be sacked immediately, not given another chance ofto goof up.

No, minister, we expect them to make simple correlations. For example if the population of S’pore grows by a factor of X, expect overcrowding by a factor of A in W years, if no new trains are ordered, or signaling improved, and plan accordingly.

All we want is some common sense.

Update on 22 November 9.45am. Corrected misspelling. Apologies.

 

Why are trains overcrowded, but not the port or airport?

In Infrastructure, Political economy, Political governance on 17/11/2011 at 6:21 pm

When I read on Wednesday that Singapore is improving the International Cruise Terminal with the aim of seeing the number of berths double by the second quarter of next year, it reminded me of the constant planning and work that goes into upgrading S’pore’s links with the rest of the world, which I contrasted with the reasons (excuses?) given for the overcrowding on our trains, which according to a media report on Sunday would take up to 2018 to resolve, and which led to the usual howls from netizens that there was bad planning by a government that didn’t care about commuters comfort.

I remembered a few years ago analysing how forward looking was S’pore when it came to developing the airport. S’pore was always planning to grow the airport so that it would never get congested. This was unlike Thailand. A few months after the new airport was finally open a few years back after failing to be completed on time, the new airport was working beyond its planned maximum capacity, resulting in congestion and delays.

I remembered remarking in a report that this could never happen here. S’pore was always expanding capacity, knowing that it took time to build infrastructure. It never wanted the airport to look like a congested, overcrowded slum. It gave a bad impression to visitors.

Likewise the port.  It is  always expanding capacity and erring its projections on the side of overcapacity rather than congestion. And it’s doing the same for the cruise terminal. Singapore is investing heavily in cruise infrastructure to ensure the industry becomes a driver of growth for the tourism sector.

If the government errs, it errs on the side of overcapacity, not undercapacity. It feels that the demand would be there, and even if it didn’t materialise as planned, the spare capacity would attract demand.Contrast this spending with what happened in public housing and trensport. In this Donald Low explains why the government became wary of building more public train lines and public housing. It all has to do with projections that went wrong in the 1990s.

The contrast in the spending patterns seem to show that comfort and well-being of S’poreans are not as important to the government as securing the engines of economic growth? In the name of latter, building to meet possible demand seems to be in order, but not when it comes to the former? Why not?

Note that the plans for development of the rail, sea and air transport links are made within the transport ministry, whose spending plans are scruternised by the finance ministry. Yet the approach seems different between domestic and international links.

SMRT: CEO stupidity discount?

In Infrastructure on 08/11/2011 at 6:00 am

Wonder if analysts will be building into their models, the assumption that SMRT chief executive Saw Phaik Hwa will continue making stupid remarks that upset commuters, thereby making it harder for SMRT (and Delgro) to get their desired fare rises? Will they also make the assumption that such gaffes reflect her inability to manage a public transport company?

In a recent ST report, the SMRT CEO commented that the MRT system is “still reliable compared with other systems” and “I don’t see anything significant” in the number of disruptions and delays.

She attributed the train breakdowns to higher service frequency, new trains that “need to break in”, and more rainy days in Singapore. She cites the newly installed platform screen doors at surface stations, which need to synchronise with train doors, as another factor in train disruptions.

Maybe by M’sian Chinese standards (she refuses to become a citizen, preferring to be a PR), comparisons with third world cities and even NY, London and Tokyo are in order. But she should not forget that she is the CEO of a transport company in a city that has aspirations to be a leading edge global city. If our ministers can set the global bench-mark paywise, SIA for premier service or or our local banks for solid balance sheets,  why can’t she set the global city benchmark disruption-wise when it comes to MRT systems?

Her other verbal gaffes: The SMRT chief had annoyed commuters last year when

— the issue of overcrowding was raised, “People can board the train, it is whether they choose to”; and

— she told commuters that they had a role in ensuring that trains were properly secured when there was a break-in at a train depot. She want us to volunteer to guard her train carriages.

SMRT CEO still does not get it

In Infrastructure on 23/08/2011 at 8:07 am

True, she says, “We cannot have another incident”. But Ms Saw said that in the rest of the world, graffiti on trains is quite a normal occurrence. “What has happened here is not the only time in Asia that you have penetration and graffiti on the train.

She still thinks we are upset because of graffti.

I hope it doesn’t take a few hundred deaths caused by bombs planted by terrorists  to make her realise that the issue is public security and safety not graffti.

SMRT: Another reason for selling

In Infrastructure on 20/08/2011 at 10:30 am

It’s amazing to read that it only found out that security guards were not patroling the fence perimeter at its Bishan depot after the break-in.

What this shows is that management is not only complacent abt security, but is incompetent. It found out the failure to patrol after reviewing CCTV footage. Shouldn’t a review of the tapes be routine?

Update on 21 August at 9.20am

It gets worse. The security company claims that it didn’t patrol the area because SMRT didn’t allow it to. And if it could have patroled the area, it would not have detected any intrusion because there were no lights in the area. SMRT says it is asking its lawyers’ opinions.

Our Muslim minister should do a Haj to thank Allah that terrorits didn’t spot this flaw. Hundreds of commuters could have been killed, and with them S’pore’s reutation as a safe place to live and do biz in.

SMRT: Third time unlucky?

In Infrastructure on 19/08/2011 at 8:31 am

Investors should seriously consider selling their SMRT shares.

There has been another serious of breach of security at a train depot. This after security was supposedly  tightened after last yr’s break-in that went undetected for days. This time the break-in was detected within hours. Even so the vadalised train was on the tracks before being recalled.

SMRT (and commuters) have been lucky twice. The break-ins resulted only in vandalism. But will this luck hold?

We have been told that Muslim terrorists have targeted S’pore because it is a friend of the West. So SMRT (and commuters) could be the victims of a bomb blast if SMRT continues being unconcerned with security.

If commuters are killed in a bomb blast resulting from explosives being planted in a carriage after a break-in at a depot, SMRT will be sued for tens of millions. And fined tens of millions by the government.

So selling yr SMRT shares now, may be a gd idea.

Keppel Telecommunications & Transportation

In Infrastructure, Telecoms on 27/06/2011 at 7:41 am

DBS issued a “Buy” on KT&T last week when it traded at S$1.32. The interesting fact is that  the stock is trading at a 35% discount to DBS’ sum-of-the-parts-based target price of S$1.65. Too bad yield is only 2.65%.

The Next Generation National Broadband Network and growth in cloud computing are fuelling demand for data-centre space in Singapore. Keppel Telecommunications & Transportation (Keppel T&T) is the only listed player in Singapore with significant exposure to data-centre business and is among the top five players in Singapore.

Besides, Keppel T&T is positioned to benefit from the increasing trend of logistics outsourcing to third-party players in China and South-east Asia. The recently acquired Keppel DigiHub data centre in Singapore and the newly built Nanhai Distribution Centre in China are the key growth drivers for 2011.

Keppel T&T has set up a dedicated fund (initial closing of US$100 million) to invest in Syariah-compliant data centres globally in an alliance with Saudi Arabia-based Al Rajhi Holding Group. Ever since the appointment of new management in January 2010, Keppel T&T is focusing on growing its data centre and logistics business with less emphasis on the legacy business of network engineering.

Core business is deeply undervalued. Excluding M1, Keppel T&T’s core business is trading at only 6x estimated 2011 full-year earnings, based on our conservative estimates. Global data centre players such as Equinix and Digital Realty Trust trade at 40-50x earnings, reflecting higher growth in the sector. Initiate with ‘buy’ for 35 per cent upside potential to our sum-of-the-parts-based TP of S$1.65.

DBS bullish on Hutch Port at US$0.95

In China, Infrastructure on 02/06/2011 at 6:29 am

Find it difficult to poke holes in DBS’ analysis. But note DBS was one of the IPO mgr and that HPH is trading below its IPO price of US$1.01. DBS says:

Firm prospects over the short and medium term. We like HPH Trust for its stable and growing earnings profile, which we believe will be driven by continued rising trade volumes into and out of the Pearl River Delta region, translating into an annual growth of 10 per cent in distributions to unit-holders for the next few years.

HPH Trust is due to report its interim results by mid-August, and we are expecting a distribution per unit (DPU) of about 1.8 US cents to be declared.

Maintain ‘buy’ and US$1.15 TP. Given that HPH Trust seems to be well on its way to meeting our projections in FY2011 and FY2012, current FY2011 and FY2012 yields look very attractive at 6.6 per cent and 7.2 per cent, respectively; expect DPU compound annual growth rate of 10 per cent up to 2013.

Our target price implies a total return potential in excess of 30 per cent at current prices. Among Singapore-listed Reits, business trusts and high yield plays, HPH Trust offers one of the highest combinations of yield and DPU growth.
BUY

SGX: Things can only get worse

In Infrastructure on 21/04/2011 at 8:11 am

DBS lowered its target price from S$11.50 to S$10.50 while Deutsche Bank revised it from S$10.50 to S$9.50.

Credit Suisse said when maintaining its “Neutral” call, “The SGX lacks near-term organic catalysts and is also exposed to M&A risk after the failed ASX-SGX merger.” IIFL issued  a “Reduce” call on the stock and lowering its target price to S$7.40.

Hyflux: Qns to ask?

In Infrastructure on 19/04/2011 at 12:23 pm

Why is Hyflux willing to pay out dividends of 6% per annum on the pref shares when it can borrow at 3.85% annum? This is a premium of 56%.

Is it lowering its debt to equity ratio from 75% to 25%, only to raise it again in the near future? If it does this would affect the risk premium of the preference share in future, thereby affecting its yield.

Six per cent is a gd rate but think of the risks which includes projects in the Middle East.

Hutch Port listing: I goofed

In Infrastructure on 08/03/2011 at 10:15 am

I blogged that I doubted it could happen because HK would change its rules and allow the listing there.

Funny HK allows a highly leveraged Russian co to list, but doesn’t allow “Superman” to list this trust. Buyer beware.

China Water Play: and its not an S-Chip

In China, Infrastructure on 08/02/2011 at 9:44 am

United Envirotech is owned by local blue chip UEL

OCBC likes the stock despite revising its value downwards by 5% to 0.65. When report was issued on 2 February, the stock had closed at 0.455. Read the rest of this entry »

Water, the new oil

In Infrastructure on 02/02/2011 at 2:45 pm

AGRICULTURE and water investments will be the best performers over the next 10 years, according to BlackRock founder and CEO Larry Fink.

“Go long agriculture and water and go to the beach,” said Mr Fink, whose creation was now the biggest funds manager in the world, with $US3.5 trillion ($3.07 trillion) under management — more than the GDP of Germany.

“Put those investments in the bottom drawer for 10 years. It’s unlike anything else we have in the world.”

Agriculture and water would even beat energy investments, he said.

“They’re finding lots of ways to find new energy — Israel’s going to be an exporter of natural gas and I’m hearing there’s more oil under Iraq than Saudi Arabia, for instance, although it’s not secure.”

Part of WSJ story

Well on SGX, we got Hyflux and at the shitty end of water plays we got CitySpring and Asia Water.

Suzhou IPO: Missing from media reports

In China, Infrastructure, Media on 14/01/2011 at 5:49 am

The local media reported that the company managing Suzhou Industrial Park (SIP) could be slated for an initial public offering (IPO) of at least 4.5 billion yuan ($883.3 million), going by conservative estimates.

The project started off with Singapore taking a dominant 65 per cent stake and the Chinese taking the minority interest of 35 per cent. But its shareholding reform in 2001 saw this structure reversed with China taking the majority 65 per cent. Singapore’s interest has since been pared down to 28 per cent following capital injection by new investors.

MM in 2004 listed out four success indicators for the SIP. They are attracting businesses and investments; urban planning and development; ‘software’ transfer; and finally, a public listing. (Extracts from BT, but others too covered story)

Funny none of them reminds us that S’pore Inc invested US$147m in the park as of 2000, and that the losses then were US$90m. Sumething ST reported years ago.

Could it be because the 28% S’pore Inc owns could be worth US$153m (after dilution)? Financially S’pore Inc could have made some money (US$6m), not taking into account its share of the US$90m accumulated loss. If the loss is taken into account, it would have lost US$52m.

Either way a marginal gain or loss (I’m assuming S’pore Inc didn’t invest more), taking into account, if true, the goodwill that our teaching “tai kor” would have generated among the Chinese, something our ministers and our media constantly like to remind us of.

And S’porean self-haters (many on the internet) would be banging their balls in frustration that S’pore Inc didn’t lose big time. Though they would be consoled a lot of ministers and senior civil servants spent plenty of time on this project.

So it’s very strange that our “constructive, nation building” media did not report this triumph of S’pore Inc? Or am I missing sumething?

But then our media is not first world class, only fourth world class. Everything must be “betterest”. Another example

The economy did 14.7%, highest in Asia. This was trumpeted by our MSM last week.

If our stock market was tops (or near) in Asia, there would be the usually trumpets.

But our mkt as measured by STI only did 10.1%. Read the rest of this entry »

MIIF: Unnoticed China play

In China, Infrastructure on 11/01/2011 at 5:45 am

Macquarie Int’l Infrastructure Fund has transformed itself into a China play with infrastructure assets in China and Taiwan. In 2010, it sold all kinds of investments like nursing homes in Canada.

It promises to be a Asian infrastructure play.

It’s latest presentation (Nov 2010) says it has 37cents in cash, RNAV of 80 cents a share, and no borrowings at MIIF level. But if it’s share of its investments borrowings are included gearing is 57%. Taz the catch.

Got to find out how its investments are valued and its plans for its cash.

Let you know. Wary as MIIF has been a dog with fleas. And if one annualises its Sept dividend payment, it yields abt 5%. Bit low for trust that was promising gd payouts at IPO time.

MIIF prior to the restructuring showed the problems of the model that Temasek and CitySpring mgt aped. Macquarie group was a pioneer of the model of using lots of debt to buy boring utility assets, and then spinning the assets off into trusts. Investors got income, Macquarie got fees at every level. Then the economic crisis struck and all lost out.

CitySpring: The problems of borrowing up to the eyeballs

In Infrastructure on 11/01/2011 at 5:23 am

When it listed a few years back, and even nowadays, CitySpring makes two points abt itself:

— Its very high level of debt (94% of debt, 6% of equity at listing*) does not matter because most of the debt is non recourse project financing. If it defaults, CS is not liable to repay because the lenders can only seize the assets and sell them. if there is a shortfall, tough for the lenders.

— It’s the cashflow, stupid. “We measure our performance using cash earnings, instead of accounting profits or losses. Cash earnings is a better indicator of our performance to our Unitholders on the basis that this more accurately reflects the cashflow generated by the businesses, and removes the effect of the accounting treatment of non-cash items on our financial statements.”

Investors now know that while these statements are true, there are nasty side effects to high debt levels.

Debt has to be refinanced periodically and the market may demand a higher interest rate to refinance, and shorter durations. The former has already happened.

And cashflow can be reduced by operational issues and higher interest rates. These happened too. These will effect payouts.

CS shows that the investment model of buying boring utility assets that have strong cashflow with lots of debt only works when credit is easily available and cheap, and there are no expectations of change. Too bad for investors in CS that Temasek decided to follow this model juz before the benign environment was to turn nasty.

Putting in more equity is not the solution because it reduces the yield to unattractive levels.

As to Temasek injecting another asset, this will only help if the trust can get very long-term project financing at very fine fixed rates.

Bottom line for shareholders  — pray for a return the benign conditions prior to 2007/ 2008.

Earlier posting

*Bit like residential property loans?

CitySpring Infrastructure Trust: a TLC dog with fleas

In Infrastructure on 08/12/2010 at 5:21 am

As regular vistors to this blog will know, I’m a sucker for yield and NAV plays. So I was starting to think abt CitySpring Infrastructure Trust which offers a prospective yield of abt 7%. It is also a Temasek-linked trust and could possibly be trading at a discount to NAV.  An investing sweet spot.

Fortunately before I even got to reading up the basic data on the trust, I chanced across a Kim Eng Eng Research report dated 30 November, which called the trust a ” sell”.

To forestall a credit rating downgrade of the three bonds issued by Basslink, CitySpring Infrastructure will set aside A$20 million (S$25.4 million) in an escrow account for this asset before next January. Although this move may resolve the CreditWatch placement by Standard & Poor’s (S&P), a capital structure plan involving an equity cash call seems inevitable in our view. So, while the forward yield of 7.1 per cent based on the previous DPU guidance appears compelling, there is no denying the risk of dilution.

… The bonds, worth a total of A$866 million, face a potential ratings downgrade that will trigger a cash lock-up at Basslink and affect CitySpring’s distribution policy … CitySpring will still need to submit a capital structure plan that will satisfy S&P’s stringent risk assessment. It plans to do so by next September. As one of the options, Basslink’s cash flow may be applied to reduce debt … A capital structure plan involving an equity recapitalisation seems highly possible in our view, given the presence of other debt obligations, such as the $142 million corporate loan due in August 2011 and the $130 million City Gas loan due in 2012. Even if Basslink continues to pay a distribution, unit-holders’ yield may still suffer a dilution.

We cut our DPU forecasts for FY March 2012 and onwards from 4.2 cents to three cents to factor in the removal of Basslink’s contribution. Our TP is lowered to $0.52, reflecting our assumption of a capital injection of $100 million to reduce gearing. Downgrade to ‘sell’.

Looks like the perfect storm. And I’ve found out that it’s last reported NAV is 0.34cents.

But I’ll monitor the trust, waiting for the capital raising exercise which I agree must come. It might then be like AIMAMP industrial reit or Fraser Commercial* — gd yields and discount to NAV to compensate for the overhang of units created by the rights issue. BTW, for waz it’s worth, I read in Monday’s ST that OCBC’s reit analyst and DBS’s  head of asset-backed structured product like industrial and office reits.

Investors in the Mapletree s-reits may want bear in mind that this trust was once a high-flying investment trading way above NAV, and giving gd yields. Until it the managers went walkabout in Oz Outback. Being part of the Temasek stable doesn’t mean that one can “close eyes and buy and hold”.

*office and malls (here and in Oz)