Originally posted by tohyi:
Does it occur to anyone that we are paying over the odds for P&O. it is an expensive deal. the arabians can afford expensive shopping cos they have money from oil what. while temasek is playing with singapores reserves and savings lor. its mine and your money the CEO of temasek is going shopping with.
buying ports overseas tend to help the local economy in those places, ports tend to employ vast amounts of people and create many more jobs in supporting industries, the business of port management or terminal operator can be very lucrative and yes in the end the profits do go back to PSA.
But if you look at a different angle, our port in singapore is very important to our own local economy. We are one of the 4 main regional hubs because we have a vast host of services and facilities available and also industry recognized efficiency many shipping lines like to use us because we can handle their cargoes faster and time means money in the shipping line a delay could mean losses or eat into their profits. If too many delays were to occur then shippers will move elsewhere to use other port operators.
The port itself employs 7000 workers and another 90,000 workers in supporting industries, if you count those in marine ship repair then the figure can be even higher. Now all these services and effieicncy can be copied or countered by some country like malaysia or dubai, they have lots of land or lots of cash they could just pour money to build or replicate what we have, or pay high wages to attract "foreign talent" from EU or even singaporeans to train or boost up the efficiency of their local workers or start dishing out freebies like free use of land for a number of years.
If we lose the hub status to malaysia or dubai shippers will start using their services then a lot of people here going to be retrenched because due to the loss of demand for the local services here so no need to employ so many, the only way to counter this is to build something like a brand, implement your own home country system model in overseas ports with some fine tuning here and there so that at each port of call that the shipper makes he will tend to use our services because he is already familiar with our system and he knows we are good value for his money and handling his cargo fast.
If PSA makes money overseas then there will be demand for services and a reason to continue to keep these jobs at home.
But the problem with building a brand is the astronomical cost and takes forever to build up facilities and train workers. Another alternative is to buy over an equally efficient rival like P&O with modern facilities and trained workers already there and all PSA needs to do is just to put the computerised system they want in place then more or less can start running.
The problem with that is other rivals will want to prevent PSA from doing it. So hence there will be a bidding war.