Originally posted by maurizio13:
At the end of the last century, the P4P government has initiated a plan for the privatisation of our public services (e.g. public transport, telecommunications and public utilities). These are all essential services for the livelihood of Singaporeans.
I think the ultimate reason behind it is deniability.
Most profit generating company would be priced according to their expected future cashflow.
e.g. If a company makes a free cashflow (approximately equivalent to profits)of $10 million a year for 50 years down the road. With a current interest rate of 5% and assuming the final value of company is $0. The discounted present value of this company would be around $182 million.
So what the government does is, increase the profits (approximately equivalent to profits) for the first few years (listing requirements of SES), so that the public company like 5|ng@p0re P0VV3R shows a very good profit. Good profits and cashflow means higher share value. Which means the government can profit more from selling the company.
Subsequently when the company goes public (listed in the stock market), it is no longer within the control of the government. Thereafter, if the company charges a high price for it's essential services, the citizens can't point a finger at the government for high cost of essential services. Afterall, it's business and the profit motivated companies need to make a good profits to survive.
Meanwhile the government would have cash in on their Net Present Value (NPV) or fair value of their investments, absconding themselves from their public duty of providing her citizens with an affordable cost of living.
Citizens' assets and infrastructures at the point of privatizing of these essential government services originally run by the government with taxpayers' monies were valued at a certain price and transferred to the newly privatized Government-linked companies who bought over the taxpayers' assets and infrastructures at such valued prices.
Who collected the sale proceeds from sale of assets and infrastructures to the privatized GLCs so obtained? Check out with MediaCorp for answer. Originally the assets including licence fees (Radio & TV) collected from the citizens were used to run the Media Stations.
What happened to the TV/Radio Licence Fees at the point of privatization? There is no doubt that you will find that these licence fees were kept by the Media Development Authority for its own purpose and not transferred over to Mediacorp to run the stations.
Also check with SBS and Singapore Post etc what happened to all the assets and equipment owned by them before the privatization using taxpayers' monies.
For example, SBS owned a large fleets of buses, the depots, lands and car parks (as government services) purchased or acquired using citizens' monies before the privatization.
Singapore Post and Singapore Power etc also owned many assets acquired with taxpayers' monies before privatization.
The answer is very simple - government simply pocketed all the privatization sale proceeds and these privatized GLCs have had to charge higher fees and charges all over again to recover such assets costs by amortizing them as depreciations which are then priced into the fees charged one more time .
Privatization resulted in double taxation so to speak as happened in TCS's privatisation to MediaCorp, SBS, Singapore Power, Singapore Post and more.
No wonder our citizens are unable to survive having to pay all the double taxations for everything from Excise Duty to COE to ERP, from double TV licence fees and double-land costs to SBS etc.
All the fees charged by all the GLCs have to be set higher in order to recoup their new acquisitions which actually were already paid by citizens but pocketed by the government quietly as surpluses or extraordinary gains in their consolidated accounts,
Citizens at the lower income groups will have to keep struggling to pay such double taxations caused by privatization. Those who are earning S$1,000.00 pm will have to pay between 40% and 60% of their family incomes towards these GLCs for essential government services which were previously financed from taxations.
This is the root cause of our all rising costs of living which up to today is still not being represented by our MPs or oppositions to parliament on our behalf.
Sigh...........
