Sembawang and Temasek losing $685 millions?
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Is it true that Sembawang Corporation or Temasek again lost heavily to the tune of $685 million due to certain delays in vessel conversions.
It is economic commonsense that all our decision makers running GLCs and Temasek have to have that uncanny extraordinary ability to feel the market directions as well as the strong hands-on implementation ability to contain quality-time-cost aspects of managing such companies.
Have they ever learnt enough that in running Sembawang Corp and investing people's monies in such industrial and technology knowledge applications, all these key personnel have to posssess that business acumen equivalent to the best in the industry.
Unfortunately, based on assumptions about scholars and academic talents too many GLCs are exposed to this kind of risks without anyone seemingly in control over such diverse major decisions in running the GLCs.
Are the ministers going to tell us how they are going to safeguard our surpluses so that they are not wiped out by such poor decision making as seen in these innumerable fiascos.
In the face of the latest investment losses by Sembawang and Temasek, it is time again to reexamine our past policy assumptions that our ex-civil servant highflyers are fit to run the GLCs.
These people have been constantly praised as people who know how to make decisions.
Ministers should tell the people whether they can still entrust the running of GLCs to the ex-army captains and all the ex-MPs and ex-ministers by pushing them to take up posts in these companies after retirements.
Is the kind of naive underbidding as has happened in this instance under some form of psychological crucible test to see if these scholars might sacrifice shareholders and public monies just to secure projects of certain nature to win names and reputations. Or do they have the attitude that the monies belong to the public and therefore do not regard them as at risk. If they make wrong decision, do they have to take the rap as happened in the private sector.
How do our engineering GLCs compete with companies like INTEL if Chip design is revolutionalised every three years with values multiplied per function increasing by 100 times over 10 years.
If our MM/SM/PM do not understand such matters, being not trained to succeed in such businesses before how do we trust them to invest our monies in all the businesses with this kind of repeated mistakes.
The EDB and finance minister have on records implemented many economic restructuring exercises since 1980s. What happened to achieving our target of value-adding and technology-based new economic model as announced? What have they achieved by way of new technology start-ups to catch up with other Asian tigers since the Asian Financial crisis and subsequent prolonged recessions of 1997-2002.
What is needed badly is more practical implementation abilities and not all the scholar-managed GLCs for show. How will the scholars compete with China and India or are they mentally giving up and regarding them as too competitive and we cannot do anything to compete.
Sadly, at every crisis, ministers are found to be in the habit of pushing away problems to the people with some finger pointing only at workers and not their won lack of implementation abilities. Workers have been subjected to all the relearning and retraining going on at SPRING and EDB all the past twenty years and yet the leaders are still slamming them for not doing their part. So who can lead better, workers who should try harder and perhaps not the leaders. -
This $685m is not an investment loss. It was liquidated damage that Sembawang Bethleham (Sembcorp Subsidiary) had to pay Allseas for the failure to deliver a conversion project "Solitaire". The failure to deliver was due to a major accident in which 5 persons were killed and there was a Committee of Inquiry.
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Talking about liquidated damages, I am just wondering 685 million is the full amount or the minimum amount stated in the contract.
If it is the minimum amount, that mean...the full amount could be 10 times more. (if term is the same as local contract). -
Anyone who sign that contract need to be question and explain the set back !Originally posted by Archie_boy:This $685m is not an investment loss. It was liquidated damage that Sembawang Bethleham (Sembcorp Subsidiary) had to pay Allseas for the failure to deliver a conversion project "Solitaire". The failure to deliver was due to a major accident in which 5 persons were killed and there was a Committee of Inquiry.
I expect the answer is "Yin si Wo de, Suu si ni de" ! -
Will GLCs be properly run with able people to avoid such heavy losses like $685 million in the Allsea vessel conversion delays. This evening, it was reported on TV that Sembawang is involved in another of a series of fatal accidents. Is this latest case not enough to cause more review and investigation on how the GLCs should be set up and run.
In the final analysis Sebawang's losses are people's losses. If they continue to lose this kind of monies citizens may one day have to forego more jobs, economic restructuring shares or even pay more taxes and GST.
The most crucial issue here is whether government GLC mangement structure can be set up on sound base by having army officer or top civil servants transferred over to run them like civil servants. GLCs cannot be run like private or commercial businesses and any loss may be affect the pocket of these civil servants or ex-army or ex-MPs.
For example, when the economy is bad and Sembawang civil servants may be risking retrenchment or scaling down and be driven into clinging any under-bid deals which might be detrimental to the whole company to safeguard the continuity of their own jobs with Sembawang. In such a situation, Sembawang civil servant employees might well sacrifice the interest of our monies as their own job continuity may be at stake so they might be driven to cling on any bad deals.
This sacrificing of company interests is clearly seen in many cases of heavy losses in the past where company is run by proxy employees and not run closely by the stakeholding entrepreneur bosses owning major shares and directly running the company e.g. CAO,
Singaporeans have to ask their ministers who are in charge of our GLCs and who can better safeguard our citizens' monies. -
The Republic of Singapore President Nathan is the only Singaporean should ask on behalf of Singaporeans of these Super Losses !Originally posted by robertteh:Will GLCs be properly run with able people to avoid such heavy losses like $685 millionsssss
Singaporeans have to ask their ministers who are in charge of our GLCs and who can better safeguard our citizens' monies.
They did promised this safe-guard, what's now ? Purely Lips Service ? Again ? -
They wont be paying the full sum their insurer will have to foot bulk of the bill if I am correctOriginally posted by Archie_boy:This $685m is not an investment loss. It was liquidated damage that Sembawang Bethleham (Sembcorp Subsidiary) had to pay Allseas for the failure to deliver a conversion project "Solitaire". The failure to deliver was due to a major accident in which 5 persons were killed and there was a Committee of Inquiry. -
Yes, it's partly covered by insurance. They had in fact projected the amount to be at $815m for the liquidated damages and was already factored into their balance sheet over the years. That is why their share price is not much affected and trading around $3.44 today.Originally posted by seancannot:They wont be paying the full sum their insurer will have to foot bulk of the bill if I am correct
So for those who trade, with the concluded "Solitaire" case, analyst is projecting the shares to go up to $3.98. It's your take if you want to try your luck.