Monday, April 08, 2019

Solutions to Solve Hyflux Saga

Solutions to Solve Hyflux Saga

There are a couple of ways to solve the Hyflux saga but the PUB getting FREE water plant is definitely NOT one of them.

As I have put it, PAP government has played a big role in manipulating the market which eventually result in the Hyflux crisis. Hyflux also tried to be Smart Alec, thinking they could undercut others in pricing their water by cross subsidies from selling electricity.


Whoever takes over the integrated plant will face the same problem because the contracts have been fixed while the oversupply of electricity due to EMA’s irresponsible manipulation is here to stay.

The only way to get out of this situation is to change the terms of the contracts. PUB should not fix water price for 25 years because this is totally unreasonable terms as energy price is volatile and nobody could possibly hedge it without incurring huge cost over 25 years.

A new pricing formula which will allow Hyflux to earn a reasonable profit should be renegotiated.

On the other hand, the Vesting Contract which EMA gave other power plants should be made available to Hyflux. Or that, Hyflux will have to renegotiate it’s contract on gas purchase.

The only way for Hyflux to stay afloat is to have consistency in all the pricing... from water, gas to electricity pricing. To have a mix of fixed and high volatility in some pricing will be a perfect formula for disaster. Worse, thinking that one could fixed a lower than cost water price while betting on cross subsidizing it via a volatile energy market.

By reconstruction or renegotiating water and gas contracts, government do not need to come up with huge amount of money to buy over the plant. It will just have to settle with a lower profit from dealing with Hyflux.

Hyflux will earn a reasonable profit (covering depreciation for 25 years) from this new arrangement but its profitability may be fixed within a range.

This is the viable option available but need political will to execute it.

Retail investors will not lose all or most of their investment. They could even continue to get their yearly interest when the new formula of contracts allow Hyflux to earn profits from its Tuaspring.

Goh Meng Seng

16 comments:

Anonymous said...

The AGC also noted that Mr Lee Hsien Yang had PUBLICLY said the last will was drafted by Ms



Kwa Kim Li of law firm LEE & LEE. Ms Kwa had DENIED this.


LOW CLASS!

Anonymous said...

We may have superstar airport; if the people are fugly; the country will still be considered ugly! A kind and gracious population will deliver beautiful results.

Anonymous said...

World class airport and facilities. Caning and death sentence sure not world class? Hypocrites!

Anonymous said...

Sunday visit to Lucky Plaza. Walk across to Paragon.

Anonymous said...

Quotes About Lawyers
“A lawyer with a briefcase can steal more than a thousand men with guns.” - Mario Puzo


“You win some and you lose some, but you get paid for all of them.” - Anonymous



“You cannot live without the lawyers, and certainly you cannot die without them.” - Joseph H. Choate


“A judge is a law student who marks his own examination papers.” - H. L. Mencken



Tribunal dismisses complaint of possible overcharging against senior lawyer over S$8.8 million legal bill.

Anonymous said...

DRIVING DEMAND FOR CROSS-BORDER MARRIAGES STEMMING IN CHINA FROM THE ONE CHILD POLICY ERA THE SKEWED BIRTH RATES. TOUGHER FOR CHINA'S ELIGIBLE BACHELORS DUE TO INBALANCE SEX. MALE TO FEMALE NOT UNIFORM.

Extreme makeover said...

On a scale of one to ten, how comfortable are the people with TCB would be 5.5. The realty is he need not find fault with the G but concentrate on the lives of the people. Unifying,by not taking sides and focusing on agreeing at a level with the common people, not what the festers of a handful on social media. People are not interested on what Ho Ching earns, they are only interested in what they can earn. Please do not remain clueless. TCB must not repeat the concept of the other oppositions who had failed miserably. His strategy must be sincere with good intentions and centered around being different and unique, otherwise its just going to be another Tan.
TCB need to implement change to the other opposition parties. This may be his first and last chance. Act wisely. Please eliminate nonessential politics.

Anonymous said...

Some earn $9.50 an hour serving customers and they collected $3.50 in GST for a $50 meal.

Some just want to invest in a 2nd property to park their money other than the bank. They not only collect $40,000 in stamp duties for one million dollar but also $120,000 on ABSD.


Some just want to sell their HDB to downgrade or upgrade, resale levies come in.


The Indian construction workers are very kind and helpful.


The Japanese are very polite and non confrontational.

MRT and buses are

Anonymous said...

Last time ha people will said this is Singapore it wont happen here. Now all kinds of things beyond our imagination are happening because no more iron hands just money hands.

Anonymous said...

Mahatir should in Guinness Books of Records. He is the one and only who is able to take down the wicked.

Anonymous said...

If they had respect the humans; they would not approve 450 sq ft. housing where animals are cage.

Anonymous said...

Things sometimes may just look simple.

Anonymous said...

In fact, things were never quite that simple-We cannot and do not know every single thing. No idea, theory or concept is sacred and beyond challenge. Reason why some leaders are only giving us part answers?

M Raffi Bashir said...

Love & Peace the best way forward

Anonymous said...

Husband: Company's not doing well, half of the staffs have been put three and half days week.
Wife: In that case I need to buy lots of money-plants to put in the house.

Near the end of the month, husband went trimming some overgrown creepers.

Husband: Wifee, I have been a big help around the house. I have been cutting the money-plants that has been creeping.
Wife: How dare you cutting my money. Since you are taking less pay home, go cut your own money. Go buy your own money plant. Mine will remain the same.

Anonymous said...

I'm not an avid reader, but I do enjoy the Monday's Business Times " Views Fromm The Top." They give out varieties in terms of balancing views & prospective. They added spice and differing marinates.