Manifesto Of A Singaporean

Call it what you like. A fool's errand or a firebrand challenge. Ruling party may take it as unsolicited feed-back. Opposition parties may consider it support ammunition. As for me, I'm just wishing for stuffs in my Xmas stocking.

With election round the corner, it's time to survey the political landscape and see the offerings. In Singapore, political party ideologies are not well defined as in the West. On the political spectrum, the PAP is on the Right, polishing the meritocracy medal with their ethos of every man for himself, to each his own efforts. On the Left are all opposition parties with their bleeding hearts for more-re-distribution to benefit the poor.

To be fair, nobody's on the extreme Right or Left. Whilst the PAP is all globalist capitalism and ensconcing elitism, it tries to build social safety nets, although many will question its adequacy given the rise in poverty and cost of living.  Neither are opposition parties ideologically socialists simply because they want to see the poor better taken care of. They are not Robin Hood, out to take from the rich to give they poor.

A vote for PAP is a vote for status quo, a bowing to a supercilious elitist oligarchy who has made life very good for one segment of the population - the rich, the well-connected, the business owners, and the well educated who are gainfully employed. A vote for the opposition is a protest vote by Earth-scorchers, people prepared to see a change, any change is better than the PAP for various issues that irk them. The battle lines are issue specific. Opposition parties have laid out the issues they are fighting against. One thing the opposition is not, and that is riding on populist lines the way many other countries have been torn apart. "Singapore first', or 'take back our country' ought to be legit cries in a tiny country where 4 out of every 10 residents are non-Singaporeans and 40% of the workforce are foreigners.

Some opposition parties have published their manifesto or spoken out on issues. However,  many have been simply generalisations, such as abuse of power, incompetence, loss of freedom of speech, non-accountability, loss of jobs to foreigners, shifting goal post of CPF withdrawals, eroding value of HDB, rising cost of services, neglect of the poor, etc.  I would like to see more specifics of which I list below, not necessarily in order of priority.

1. Set up a Truth Commission:
   The commission to be tasked with investigation into possible past wrongdoing of state and non-state actors in the past with the objectives of (a) setting historical records straight, (b) pursuing restorative justice where transgressions have been discovered, (c) improve on weaknesses of regulation or legislation if any.
   The specific areas to focus:
   - Who were the state actors who purchased pre-war properties
   - The truth about Operation Spectrum
   - The charges against Phey Yew Kok
   - The truth about ex-president Devan Nair
2. Statement of Family Members by MPs:
   On assuming office, MPs to provide SFM to 2nd degree of consanguinity.
   To obtain from MPs past and present SFMs for the purpose of (1)(3)(4)(5)(6)(7).
3. Statement of Assets and Liabilities by MPs:
   On assuming office, MPs to provide SAL.
   To obtain from MPs past and present SALs from start date to 2019
   Deemed ownership includes those of children and spouse. Holdings far in access of their capabilities require explanations.
4. Bonus shares of GLCs:
   List bonus shares issued to all political appointees and connected actors.
5. Cabinet member salaries:
   Re-evaluate salaries of MPs and cabinet members.
6. Depoliticisation of actors and institutions:
   Depoliticise the civil service, PA, CCC, grass-roots organisation, HDB, GLCs, social institutions, trade unions etc. The role of PA and CCC to be reviewed. These 2 institutions of non-elected actors have operated on the basis of partisanship and acted with great bias towards wards run by opposition.
7. Dismantle the spider web of political connections in various institutions:
   The political domination of the same ruling party for 54 years have seen an incestuous network of the politically connected and their relations embedded in all aspects of life in the country. We need a breadth of fresh air into this suffocating environment. Where necessary, political appointees and connected persons whose only reasons for being in the position is their connection, to be removed. 
8. Town councils:
   MPs to refocus on legislative responsibilities and no direct involvement in the running of town councils.
   Doctrine of exclusiveness as regards access to state resources to be ceased. All electoral wards to have equal rights to state resources notwithstanding which political party runs the ward.
9. Privy Council of UK as Final Court of Appeal:
   Re-instate the right of final appeal to the Privy Council of UK. This is not a regressive step but a bold statement of the independence of the Judiciary. The reason is, with a small population of 3.5m citizens, we have too small a base to produce brilliant legal minds. As Singapore establishes itself as an international centre of excellence, this will certainly have the endorsements of all denizens of whatever nationalities.
10. Libel case laws:
    Repeal all precedents of local political libel cases and re-subjugation to universal libel case laws. The PAP will reel in horror of this suggestion if they win the election, but likely to support this idea if they loose. 
11. Review POFMA:
    Some form of curtailing online falsehoods is acceptable but the current arrangements are open to abuse by Ministers. A proper review is necessary and this time, to really allow participation by all stakeholders.
12. Referendum:
    Legislate a requirement for a national referendum on amendments to the Constitution, the powers of the President, and Presidential Elections Act.
13. Presidential qualification:
    To review the criteria for qualifying candidates in presidential elections. The current bar is too high. Just imagine if other countries had adopted the same principles, there can never be a Mandela, Deng Xiao Ping, Winston Churchill, and others.
14. Strengthen the Law Society:
    The Bar Association is a mainstay of democracy in a country. This is called the Law Society in Singapore. The shackles for voicing dissent or criticism of legal matters must be thrown away. The Society must regain it's rightful role as a staunch and fierceless voice of conscience for the people.
    
15. Change in Companies Act:
    Private exempt companies to file financial returns. Not doing so allows illicit and improper corporate activities to hide behind a veil of ACRA exemptions.
    Practice of nominee shareholdings to be abolished. This is an antiquated practice of the past where physical scripts were required. Nominee shareholdings is an affront to an open market. It facilitates the concealment of improprieties. 
16.  Freedom of Information:
    An FOI Bill should be introduced.
17. Smaller government:
    Rationalise and shrink the government which has been bloated over the years in abeyance to Parkinson's Law. More specifically, abolish the practice of layering approach of the government which has resulted in duplication and higher costs. The Doctrine of Subsidiarity should be practiced. Why should the government, through its various agencies and institutions, be running small little business like childcare and others.
18. Review CECA:
    Produce a Balance Sheet on CECA and review the bilateral agreement.
    Conduct an inquiry into who wanted the article of labour mobility inserted and why.
19. Temasek & GIC:
    Conduct independent financial analysis and report on the state of affairs.
    Re-install full governmental control.
    Report on executive compensation paid.
    Re-evaluate on the principles for sovereign wealth fund investment. Should it be wealth maintenance or profit maximisation at high levels of risks. To reign in the increasing move towards leveraged investment.
20. Incentive grants:
    List all the commercial grants and incentives provided by the government indicating the quantum and the recipients.
21. CPF:
    Restore CPF withdrawal rights on the basis of what the contributors signed up. If a contributor started CPF contribution in a particular year, he should be allowed to withdraw according to the standing regulations then. The goal post should not change since people make their long term plans based on the parameters when they signed up.
    
22. Wealth transfer tax:
    Death duties and capital gains tax to be re-established. It should not be crippling, but a progressive rate should apply.
23. Social redistribution:
    To make a proper detailed study of the state of poverty in Singapore. Metrics currently available are insufficient. To establish metrics on citizens as distinct from just residents. To establish a poverty line. Determine the real state of affairs and to consolidate all safety nets available to one coordinating agency. Determine the quantum of assistance to be raised.
24. HDB Pricing:
    Conduct a public inquiry into the basis of HDB pricing. To determine if HDB pricing strategy was the benchmark used to prop up the private real estate which distorts price discovery. HDB must return to its proper role of providing public housing, its determinant utility is affordable public housing.
25. Public transport and electricity:
    To re-evaluate the cost effectiveness of nationalised and deregulated services. Singapore market seems too small for full deregulation, the benefits of which are lost through duplication and faux competition.
26. 5G implementation:
    A proper health review has to be conducted. There is no need to rush to be number #1 in 5G technology. The public needs to understand the health issues - what's proven, what's possible, what studies have been made.
27. 10m population:
    To be rejected outright. What an irony to save and struggle and pour so much resources into all those land reclamation projects in the past so that we have more breathing space, only to bring in millions of immigrants and turn on the pressure cooker again.

These are just my first few priorities. No doubt the reader will have his/her own list. My list covers almost all current issues contributing to the angst of the people struggling to live dignified lives in the most expensive city in the world. What I have glaringly left out is the issue of diminishing value of HDB apartments and associated inadequacy of retirement funds. The reason is simple. I do not share the views of many that they have been cheated and lied to about their HDB flats. It is understood leaseholds have depreciating values. If a person has emptied his retirement funds in his CPF to purchase a leasehold property, the consequences are obvious. My only concern in this regards is whether HDB pricing is fair and that changes to CPF terms should only apply to new entrants to the fund.

CECA - the shocks of labour mobility

Singapore-India CECA was first mooted in 2003 as any Free Trade Agreement between two countries desiring to improve bilateral trade relations . By 20 June 2005, when it was inked with articles for enhanced labour mobility for PMETs (professionals, managers, entrepreneurs, technicians) across 127 specified job titles, CECA was no longer a plain vanilla FTA but a binding treaty facilitating the flow of Indian workers into Singapore. Adding to the planeloads of incoming Indian workers, favourable immigration policies allowed those that hit home base to sponsor direct family members over, and in turn, spouses may find jobs.

Singapore has a 3.5m home citizens on a tiny 721 km2 space and is a magnet for immigrant workers. India is a behemoth with 1.3b population in 3.2 million km2 land, and high unemployment. With such disparity, an FTA allowing high labour mobility must be the most lop-sided bilateral trade agreement ever signed in the world.

"An economic shock refers to any change to fundamental macroeconomic variables or relationships that has a substantial effect on macroeconomic outcomes and measures of economic performance, such as unemployment, consumption, and inflation. Shocks are often unpredictable and are usually the result of events thought to be beyond the scope of normal economic transactions. Economic shocks have widespread and lasting effects on the economy..."  Investopedia

In simple layman term, shocks are the impact on macro and socio-economics that the influx of Indian PMETs wreak on Singapore. In going to bed with Goliath, can David stand up to the shocks?

Much of what is written here is based purely on personal observation and internet chatter. Hardcore statistics are hard to come by and official data is suspect for its inability to drill down from residents to citizens and non-citizens. With a population of 5.6m of which 2.1m are non-citizens, and where 40% of the workforce are foreigners, statistics that shy away from citizen specific do not tell the real story. The government has a high trust deficit here having been outed on several occasions for presenting statistics skewed to fit its narrative.

The open labour mobility of EU supports the theory of ‘Optimum Currency Area’ that people move from areas of increasing unemployment to where the jobs are. It acts as a stabilisation mechanism in smoothening out employment and population distribution. For the EU, this has consonance with its political and economic integration objectives. It is also facilitated by shared western cultural background. The Singapore-India arrangement has none of these.

Experience has shown the receiving country of immigrant labour, being a higher cost economy, ultimately faces the shock of depressed wages. Employers have no reason not to welcome a source of cheaper workers and the government is certainly happy to push GDP numbers on the back of competitive labour. Yet official statistics show Singapore median wages have grown both nominally and in real terms. How is that so? Without a breakdown of data to show the status of citizens, it remains to be proven that the lot of the locals have actually improved. In the absence of citizen specific data, it is not within the bounds of reason to suggest that the median wage has risen due to a structural change in labour composition. The new high technology economy has caused a paradigm shift of more head counts in a higher skilled sector whose wages has the effect of pulling up the median numbers. The average Singaporean feels wages have not increased sufficiently and resigned to a lowered standard of living.

The shock of unemployment is inevitable as cheaper Indians displace Singaporeans across the board. Local PMETs above 40 years of age who, having hit glass ceilings, are the most vulnerable. There has been a glacial  displacement of local PMETs at a time when they are just beginning to build a family and paying for big ticket items like a home mortgage loan. Lateral mobility is almost impossible for this category of job seekers. Many resorted to work as Grab share cab drivers, security guards, private tutors, insurance or real estate agents, or whatever freelancing or gig jobs that come by.

Not only are PMET jobs taken over by Indians, but increasingly, the C-suites (CEO, COO, CIO, CFO) are also going to the Indian nationals. These pay scales are reckoned to be on levels higher than Hongkong and other cities. Singaporeans find themselves displaced and high paying jobs out of reach.

The shock of welfare tourism is not significant for Singapore since it does not provide unemployment benefits and immigration is work-pass dependent. Nevertheless, permanent residency status has its benefits in subsidised medical, child care, education, right to retire in Singapore, and right to purchase public housing. Many immigrant workers use Singapore as a springboard to move to their country of choice, namely USA or EU.

The influx of hundreds of thousands of Indian nationals present a social and cultural shock that is evident everywhere. Infrastructure and public services are stretched to the limit. Public transport, especially the mass rail transit, are jammed-packed like Tokyo rails. Hospital beds are crowded out, and waiting time stretched long. Public spaces are taken up by Indian nationals. Go to Changi Business Park where it feels like downtown Mumbai. Go to the popular coastal stretch on the East Coast Park and its Indians, Indians, everywhere, Singaporeans are black cats in a coal cellar.  Indians are crowding out locals in selective condominiums such as Mandarin Gardens and social tension is inevitable. Adding a magnitude of Indians on a tiny land of 721sq metres is mind boggling. It is an understatement the demographic landscape has changed radically.

The shocks of labour mobility as a consequence of CECA need to be seriously studied, understood, adequately explained and managed. Hiding behind skewed data, oxymoron statements from Manpower Minister such as 'new job creation increased and unemployment also increased', and Minister of Trade & Industry's view of taking criticisms of CECA as subversive, are not helpful at all. The EU experiment offers a lesson. The same shocks of labour mobility suffered by the British fueled the 'take back our country' cry and was one of the key reasons for Brexit.

See related blogs :

CECA : The Dangers Of Labour Mobility

The Government Thinks Singaporeans Are Too Stupid For Lots Of Jobs

Aqua Munda to buy Hyflux's accounts payables

Strange happenings at the beleaguered Hyflux. The blog title needs a double-take. Yes it's accounts payable, not accounts receivable.

1. Newly minted company Aqua Munda goes to Hyflux to buy out water/power production company's Accounts Payable -- namely some bonds, unsecured creditors and some contingent liabilities. Should'nt Aqua go to bondholders and creditors to buy out their Hyflux bonds and Accounts Receivables instead?

2. Aqua is actually making an offer through Hyflux. So there is no actual direct offer by Aqua to creditors and bondholders?

3. State media say Aqua is making a tender. It's asking sellers to quote their price. Aqua retains the right to accept or reject any offer, without the need to explain why.

4. Just imagine the administrative hassle. Supposing Aqua buys Hyflux's Accounts Receivable. It deals only with Hyflux to buy the debts on their books (an asset). But here, Aqua has to deal with the hundreds or thousands of retail bond holders and sundry creditors to buy what Hyflux owes them. It's unheard of.

5. How does this deal affect Hyflux? Absolutely nothing. They still owe the same amount of money, (about S$1.7B) but to a different party is all.

6. What's in this for Aqua? They take on Hyflux credit risk. So if they buy from bond holders and unsecured creditors at a good price and Hyflux manages to pull out of their crisis, it's boom time Charlie for Aqua. Since Hyflux is now suspended and its financial distress seems insurmountable, it can only mean Aqua knows something the market does not know.

7. The mystery deepens. Acra information shows Aqua's principal activities are water treatment, waste treatment and oilfield chemicals.  It is then in the same line of business as Hyflux. Does it intend to go into business?. If so, why take over the liabilities and not ownership?. Is it a precursor to taking over the company? Resolve the messy retail bonds and unsecured creditors first and then to make an offer to shareholders? If that were so, surely the egg must come before the chicken. Aqua must have reached some agreement with major shareholders and secured creditors as pre-conditions. That begets questions of non-compliance of disclosure requirements by Hyflux.

8. If Aqua was recently registered as a company seeking to go into water treatment business, nothing is known of the personalities involved. Are they from the industry? Why are these people so coy? Surely they ought to step right out for public confidence. 

9. Here's something that might give a clue. The shareholder of Aqua is Singapore citizen Mr. Bambang Sugeng Bin Kajairi.  A Google search shows Bambang has been associated, at various times, as officer, director, CEO or shareholder with Geylang United FC, Reem Investments (UAE), CapitaLand Amanah Pte Ltd, some corporations in UK, Credenze group (sports, real estate, fund management) and senior management positions in the Ministry of Foreign Affairs.

10. So, Mr Bambang is no water industry guy.  He is a PAP guy. Does he know something no one knows? Or could he be the PAP face in a government attempt to sort out the Hyflux debacle?

11. Could this be a government bailout disguised as an open market transaction? This makes sense. It's a political play to bail out local retail bond holders and small businesses. A Hyflux arrangement with bond holders will need to fix a single compensation rate which is almost impossible to satisfy all uncles and aunties. An Aqua tender allows individualised rates which should be palatable to all. Aqua has the right to accept or reject any offers. It is thus possible for a selective bailout of only the local retail investors and SME creditors at acceptable prices. Is this a smart way for the government to remain anonymous in bailing out small time local investors and ride out a high octane outpouring of anger unfairly directed at it, whilst at the same time, avoid setting a precedent for the market to seek the administration's support for investments gone bad?

12. Lastly, here is a trivial which may not mean anything. Mr Bambang is listed in the Panama Papers and has shareholdings in 2 offshore companies -- Bartley Development and Lindbergh International, both registered in Virgin Islands. Of the several associated personalities disclosed in Panama Papers is a Malaysian Mr Pang Shun Pen. He seems to be from the oilfield chemicals industry, one of Aqua's principal activities.

19 December 2019

Addendum:
States media mentioned Hyflux made some filing with SGX regarding Aqua's proposal. This is so strange. Aqua offers to purchase from the aunties and uncles their holdings of Hyflux bonds, and from SMEs their Hyflux debs. Hyflux is not privy to such transactions. It has nothing to do with them. So what SGX filing is required of Hyflux?

20 December 2019

No country for old men

This Tommy Lee Jones movie is a story of an aged Sheriff Ed Bell trying to catch an assassin on the trail of a young man on the run with some drug money he found.  The movie has a very western feel to it. Very few actually understand the ethos of the movie is about generational change, an old sheriff feeling his inadequacy and trying to make sense of a changed world.

I have a strong feeling many of the older generation in Singapore have fallen into the same rabbit hole. There is a strong bewilderment of what the hell happened from the wealth of the 1980s to a struggling existence today, and seeing a detached government that is unwilling and unable to fully address their plight.

When Speaker of Parliament Tan Chuan-Jin said "Singapore can become the best place in the world to age in"  and I was deciding on a Fairprice housebrand loaf of bread or a Gardenia's, I can't make sense of the comment. Of course, one cannot appreciate a comment without knowing the audience to whom those words of wisdom were spoken. Not much money left in my bank account, but I'll wager to the last dollar he was speaking at a 12 course dinner for the well-heeled CBD crowd.

"In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of." ...Confucius

After 10 years overseas, I thought I return to a very wealthy and well governed country. To my shock and utter dismay I see more homeless folks sleeping in odd places than I witnessed in Makati, Philippines. I see frail and bended old folks clinging to their last vestige of pride, refusing to go begging by eking a living making a few cents from collecting cardboards and selling tissue papers. But I cannot understand why ministers said these old folks are taking the opportunity to exercise.

When one travels and see these disparities of wretchedness in a rich country, one does not need to do research to know something is terribly wrong. The hundreds of millions of $ that the government pours into Formula 1 races in order to showcase Singapore to the world is diminished by one single photo of haggard old folks pushing a cardboard cart, now an ubiquitous sight, part of our landscape. Simply google 'singapore, cardboard collectors, images' and you see despair. I can't make sense of the willingness to pour millions of tax payers money into a single  project that prospers one Ong Beng Seng, the F1 organiser, but so unwilling to relief the burdens of the aged poor.

The government can boast of the many social services and aid programmes that have been rolled out but never admit these have been negated by the high cost of living and the many official left pocket to right pocket trickeries that locals deride as  'give a chicken wing and take back a whole chicken' policies.

"...any woman who is married to a citizen of Singapore may, on making application therefor in the prescribed manner, be registered as a citizen of Singapore if she satisfies the Government — that she has resided continuously in Singapore for a period of not less than 2 years immediately preceding the date of the application; that she intends to reside permanently in Singapore; and that she is of good character."... Singapore Constitution (123) (2)

I want to hightlight a small segment of Singaporeans whose lives have been devastated or made terribly intolerable by an uncaring and non-compassionate leadership. For one reason or another, many Singaporean males find a foreign-born partner late in life. Some took on the government's challenge to venture forth in foreign lands and found romance. Many find difficulties in bringing their spouse into Singapore.

The constitutional rights of these men are abrogated by subsidiary executive regulations that prevent any easy path of entry for foreign spouses. They are left to using tourist visas of one month, followed by an application for extension for 2 months. At the end of the 3rd month the spouse returns to her home country for a week or so, and then repeats the process. There is the extra cost of visa extension application and the one month return ticket which is sacrificed. The worse part is upon each entry, the spouse faces the trauma at passport checking counter. Often viewed as woman of ill-repute trying to enter our sacred golden country, the never-smiling ICA counter staff will call up an equally non-smiling bunch of ICA security personnel to rudely haul her away, in front of long queues of their fellow travellers from their home country, to the interrogation office. At the office, the same questions will be asked, as if ICA does not have the best computer data bases to rely on.

Well meaning friends will suggest approach the MP, apply for long term visit pass etc and will be told been there, done that. Their plights have been raised before, and standard ICA respond peters down to one standard line - they assess applications for LTVP on various criteria, one of which is the ability of the sponsor to support the applicant. The $ sign flashes on all doors to government offices.

Call me stupid, but there are 2 things I don't understand the line of thought here. Does the government give out financial aid to foreign spouses? NO. Are the sponsors asking for aid? NO. So why should the presupposition of aid be a criteria? In any case, LTVP is renewable bi-annualy and thus easily terminated. What then is the issue?

Allowing a foreign spouse in means one less work permit or employment pass to issue. Is that not better for official statistics? In the choice of giving a job to a foreign spouse or a foreign worker, our government chooses the latter.

Government policies discriminate the folks caught up in this situation. They cannot rent HDB apartments, whether from HDB or from the public. They cannot register as new applicants for HDB flats except for the studio apartments. An even for the studio apartments, the 'subsidy' is reduced by a higher charge for the flat.

I had a friend from Canada who spent some time here on tourist visa. He was invited to apply for Permanent Residency. Let me make it clear, he did not apply for it. Many took advantage of PR status to buy subsidised HDB flats, subsidies that our government prefers to give to PRs than to citizens with a foreign spouse. My mind cannot compute all these.

It is pure and simple discrimination of a segment of Singaporeans by the government.

I have had some discourse with folks online who are quite happy with the status quo in Singapore, espousing on the clean and green, best housing, best education, law and order, good jobs and clean government routines. My responses to them have been: Good for you. Let me guess, you must be in your late 20s-early 30s, graduate, chasing the corporate ladder, low to mid level management, probably staying with parents. Wait till you are in your 40s, with your salaries heating glass ceilings, with a wife and kids, making payments for big ticket items - a car and HDB, maybe condo or landed property, and employers wondering why they should'nt be bringing in a young MBA from India at half your cost.

You may then realise, like Sheriff Bell, that this is no country for old men.

PAPsmear - the big lie about the AIM saga

The controversial 'sale and leaseback' of the town council management software by PAP wards in 2010 cannot die the natural death the government wants. It has resurfaced with the Alujnied-Hougang Town Council vs Worker's Party leaders court case. Deep is the public distrust after thousands of questions and unsatisfactory answers.

My motivation for this blog is the distaste I find in pro-PAP online posts and comments that lash out at those who question. They dump down on the latter by reposting Dr Teo's media statement of 2 Jan 2013 as their gospel truth. It reflects absolute non-critical thinking capability, of wide-eyed and open-mouthed PAP supporters who slurp up every sliver of explanation dished out without distilling fact from fiction, the credible from the incredulous.

But first, let me dwell on the inconvenient truth of AIM that nobody talks about. What we know of AIM:

- Year Registered: 1991
- Object: IT consultancy
- Physical address : None
- Paid up capital: S$2
- Year Delisted :2015
- Key Officials:
  Lau Ping Sum (one share since 1991, director since 1998)
  Chandra Das (one share since 2004/director since 2010)
  Chew Heng Chin (director since 2010)

My 30 years banking experience during which time I kept a keen eye on financial frauds both locally and internationally, tells me a $2 company, especially a long dormant one, always smells like a rat. If it smells like a rat, it most probably must be a rat. Alarm bells should be ringing.

Back in the late 1980s there were many stories of MPs trying to get onto the boards of private businesses. One MP proposed to join my family's small interior furnishings business, promising to bring in all POSB new branch projects. We never got past talking to his emissaries. It was not worth it. Another that I know of was an MP considering to join the board of a company of Oh Choon Woo. I cautioned against this because the company was under investigation by IRAS. Obviously, the MP was brought in to smoothen the company's tax problems. Eventually IRAS raided the company, and Oh Choon Woo went into exile under mysterious circumstance. But that's another story.

Do not kid ourselves that self-interest ideas never enter the brains of men in whites, million dollar salaries notwithstanding. Remember the MP who sat on the board of 74 companies?

In the centre of the AIM saga is then MP Chandra Das whose integrity is'nt exactly impeccable. In the 1980s when he was either Advisor or Consultant to public accounting firm Deloitte & Touche, he advocated very strongly for bank auditors to be appointed on a rotational basis amongst the top few audit firms. He failed to mention that Deliotte had no bank clients in Singapore and that he had business interest in the firm. This is also the guy who had a thick folder of complaints on him that LKY reviewed and had him removed in 1996. Remember his sudden resignation?

There is a strong suggestion AIM was never a PAP created animal but a vehicle set up by MPs to pursue personal interests. The circumstances seem to support this. It was first set up by Ng Pock Too. The only activity was the 2010 purchase of this software of the town councils. A very prominent personality in IT industry, John Wong Weng Foo, joined the board initially. John would'nt be doing pro bono in a low-key PAP enterprise for sure.  Most likely he was to drive the IT business, perhaps to develop a solution for town councils, a niche market in late 1980s when MPs took on the responsibility of running their wards. The government has big time IT company NCS why would PAP be bothered with a startup like AIM.

Why AIM was never a PAP owned company? Because it's the law. All political associations, which comprise all political parties registered under the Societies Act, and any organisation whose objects or activities relate wholly or mainly to politics in Singapore, are forbidden to participate in business.

Now the brilliant men and women of PAP cannot be so naive that they did'nt understand the law. Of course they do. So why then did both Minister Khaw and Dr Teo said in Parliament 13 May 2013 that AIM was set up by the PAP? Because the AIM saga exploded into public prominence. No longer able to cover tracks, PAP had to shield the misdeed and assume ownership of AIM. Then the moment it is conveniently possible in 2015, AIM was delisted. Case closed.

If AIM was indeed a party-owned entity, they need to answer to the Societies Act on its breach. They can monkey round the issue that technically, the shareholders are just two individuals, and since the PAP is not a legal entity, thus do not own AIM. It is the spirit of the law that has been breached.

If AIM was never a PAP company, then they lied big time in parliament and are covering rogue MPs. It is collusion of a corrupt act.

The PAP cannot have it other ways. It is one or the other and that is the inconvenient truth.

Let's dive right into Dr Teo's media statement. There is a lot of goobledygook going on. My humble experience with systems management and development allow me to understand what's going on.  As the saying goes, the devil is always in the details. Follow me as I demolish Dr Teo's assertions para by para.The para numberings are mine.

Media statement by Teo Ho Pin 2 Jan 2013 (1) On 28 December 2012, I issued a press release in response to Ms Sylvia Lim’s statement on the website of the Aljunied-Hougang Town Council. Ms Lim had made various assertions in her statement. However, her statement was made without citing the relevant facts. I now make this further statement to set out fully the relevant facts. I am the co-ordinating Chairman of all the PAP-run Town Councils (“the TCs”). The PAP TCs meet regularly and work closely with one another. This allows the TCs to derive economies of scale and to share best practices among themselves. This improves the overall efficiency of the TCs, and ensures that all the PAP TCs can serve their residents better. In 2003, the TCs wanted to harmonise their computer systems. Hence, in 2003, all the TCs jointly called an open tender for a vendor to provide a computer system based on a common platform. NCS was chosen to provide this system. The term of the NCS contract (“NCS contract”) was from 1 August 2003 to 31 October 2010. There was an option to further extend the contract for one year, until 31 October 2011. In 2010, the NCS contract was going to expire. The TCs got together and jointly appointed Deloitte and Touche Enterprise Risk Services Pte Ltd (“D&T”) to advise on the review of the computer system for all the TCs. Several meetings were held with D&T. ----------	Comments: (1) Misleading information on the old software. Was it LIES or ignorance. But it influences the thinking process of those trying to follow this AIM saga. The system they purchased was Oracle Financial 11 (OF11). It is an off-the-shelf business application software. Users buy it and customise settings to suit their needs to the extent the various suites of the package allow. . The NCS contract is NO BIG DEAL. NCS did not develop anything. They do not meddle with the software, having no source code. All they did was maintain changes to settings, not the software. They are simply the outsourced IT dept. The town council (TC) team had no IT capability to handle customisation of settings. The NCS contract is nothing but a systems support contract. Which means anyone with OF11 knowledge and understands TC's needs, can replace them. I would think there are many in the market. Be very clear - the support contract was going to expire, but the OF11 application can still function.
(2) After a comprehensive review, D&T identified various deficiencies and gaps in the system. The main issue, however, was that the system was becoming obsolete and unmaintainable. It had been built in 2003, on Microsoft Windows XP and Oracle Financial 11 platforms. By 2010, Windows XP had been superseded by Windows Vista as well as Windows 7, and Oracle would soon phase out and discontinue support to its Financial 11 platform. ----------	(2)This is serious MISINFORMATION. All application software has a life-cycle. The profitable ones live on. But they constantly upgrade as hardware platforms change. OF11 has moved on and I think the current version is OF11i. What Oracle meant was it will no longer support the software version running on old hardware operating systems. Meaning they will stop making any improvements to features in OF11.  Users can continue to use OF11 on all those old Windows OS.
(3) The TCs were aware of and concerned about the serious risks of system obsolescence identified by D&T, and wanted to pre-empt the problem. In addition, as the NCS Contract was about to expire, they sought a solution which would provide the best redevelopment option to the TCs, and in the interim would allow them to continue enjoying the prevailing maintenance and other services. ----------	(3)Users have a choice -- upgrade hardware and migrate to new version of OF11i. Oracle and all other developers, normally allow existing users a cheaper upgrade path. Upgrade has distinct advantages -- familiarity and migration of databases. Or users take the opportunity to change software, particularly if they find the old one does not meet their needs. User should not lag too far behind technology changes. Obviously with Windows OS changing, TCs need to keep pace. But the situation was not as urgent as they make it out to be. The role of Deloitte & Touche: There is something snaky. I mentioned above how Chandra Das tried to get the central bank to adopt a of policy change of rotational auditors for banks, but never declared his dealings with D&T and the fact the firm had no bank clients. We wonder if his D&T link is still there.
(4) As Coordinating Chairman of the TCs, I had to oversee the redevelopment of the existing computer system for all TCs. It was clear to me that the existing computer software was already dated. The NCS contract would end by 31 October 2011 (if the one year extension option was exercised). However, assessing new software and actually developing a replacement system that would meet our new requirements would take time, maybe 18-24 months or even longer. We thus needed to ensure that we could get a further extension (beyond October 2011) from NCS, while working on redevelopment options. ----------	(4) No comments
(5) D&T also raised with the TCs the option of having a third party own the computer system, including the software, instead, with the TCs paying a service fee for regular maintenance. This structure was not uncommon. We decided to seriously consider this option. Having each of the 14 individual TCs hold the Intellectual Property (IP) rights to the software was cumbersome and inefficient. The vendor would have to deal with all 14 TCs when reviewing or revising the system. It would be better for the 14 TCs to consolidate their software rights in a single party which would manage them on behalf of all the TCs, and also source vendors to improve the system and address the deficiencies. ----------	(5)There are various ways and means, if the TCs develop their own software. Except for TCs, there are political wiretraps in centralised ownership. What happens when PAP losses a TC? I'm sure Deloitte & Touche never considered politics a factor in their thinking. Of course for the 15 MPs they thought the wards belonged to them in perpetuity. (They were 15 wards before they lost Aljunied).
(6) The TCs thus decided to call a tender to meet the following requirements: a). To purchase the software developed in 2003, and lease it back to the TCs for a monthly fee, until the software was changed; b). To undertake to secure extensions of the NCS contract at no extra cost i.e. take on the obligation to get an extension on the existing rates, until the TCs obtained new or enhanced software. This was put in to protect the financial position of the TCs; and c). To work with the TCs to understand their enhancement and redevelopment needs and look for a suitable vendor to provide these upgrades. ----------	(6) INCREDULOUS! a). Dr Teo is pulling a fast one here. They have NOTHING to sell. They never owned the Oracle Financial 11 software. They were mere licencees. b) Support contract with NCS - OK no problem here. NCS is a GLC, pally with PAP. c) What 'upgrades'? It's a new system they wanted to develop.
(7) Under the tender, the TCs sold only the IP in the old software. The ownership of the physical computer systems remained with the individual TCs. We wanted to sell the IP rights in the old software because it had limited value and was depreciating quickly. Had we waited until the new system was in place, the IP to the superseded old software would have become completely valueless. The TCs advertised the tender in the Straits Times on 30 June 2010. Five companies collected the tender documents. These were CSC Technologies Services Pte Ltd, Hutcabb Consulting Pte Ltd, NCS, NEC Asia Pte Ltd and Action Information Management Pte Ltd (“AIM”). I am aware that NCS considered bidding but in the end, decided not to do so as it was of the view that the IP rights to software developed in 2003 on soon to be replaced platforms were not valuable at all. Another company withdrew after it checked and confirmed that it was required to ensure renewal of the NCS contract without an increase in rates. The company did not want to take on that obligation. The others may also have decided not to bid for similar reasons. In the end, only AIM submitted a bid on 20 July 2010. ----------	(7) I REPEAT, THEY HAVE NOTHING TO SELL.   What Intellectual Property right was Dr Teo talking about? They were merely licencees of the OF11 software. Oracle never gave them IP over the software that is damn well for sure. The fact that of the 5 companies that collected the tender documents, only AIM submitted a bid is no surprise. They saw through the scam. Assuming the TCs have an IP to sell (which I absolutely don't believe), why would management go about a tendering process when they are faced with more crucial tasks -- attending to develop a new system? Well there is a reason -- if they can monetise it for big money. But see Dr Teo's math below -- they expect to net a miserable $8,000). And even in this, Dr Teo got it wrong. See below. Is this PAP narrative believable? - Go through a hustle of a tender to sell a software for a net gain of $8,000? - Go through such a hustle when they were going to ditch the software to develop a new one?
(8) We evaluated AIM’s bid in detail. First, AIM’s proposal to buy over the software IP would achieve our objective of centralising the ownership of the software, consistent with the model suggested by D&T. AIM was willing to purchase our existing software IP for S$140,000, and lease it back at S$785 per month from November 2010 to October 2011. The lease payments to AIM would end by October 2011, with the expiration of the original NCS contract. Thus after October 2011, the TCs would be allowed to use the existing software without any additional lease payments to AIM, until the new software was developed. This meant that the TCs expected to gain a modest amount (about S$8,000) from the disposal of IP in the existing software. ----------	(8) Why did AIM offer $140,000? Because politicians who try to play businessman NEVER PUT IN A RESERVE PRICE. Talking about protecting residents interest! They don't really know how. Once again Dr Teo gets it wrong even with this simple maths. During this time, there were 16 TCs, not 14. The real math: $140,000 - ($785 x 12 months x 16 wards) = ($10,720) DR Teo, you actually lost $10,720. You conveniently ignored Aljunied + Hougang also had to pay up. You were doing a belated narrative so such details get lost. Understandable.
(9) Second, AIM was willing to undertake the risks of getting an extension of the NCS contract with no increase in rates. This was the most important consideration for us, as it protected the TCs from an increase in fees. ----------	(9) NCS, AIM, 14 TCs -- all one happy PAP family. What's the big deal? Is Dr Teo saying AIM are better negotiators than 14 MPs?
(10) Third, we were confident that AIM, backed by the PAP, would honour its commitments. ----------	(10) Aha. now we're talking! But note, this was 2 Jan 2013, so Dr Teo had to say "backed by PAP". It was only on 15 May 2013 that Minister Khaw said AIM was owned by PAP.
(11) Given the above considerations, AIM had met the requirements of the tender on its own merits. We assessed that the proposal by AIM was in the best interests of the TCs, and thus awarded the tender to AIM. Under the contract with AIM, the TCs could terminate the arrangements by giving one month’s notice if the TCs were not satisfied with AIM’s performance. Similarly, AIM could terminate by giving one month’s notice in the event of material changes to the membership of a TC, or to the scope and duties of a TC, like changes to its boundaries. This is reasonable as the contractor has agreed to provide services on the basis of the existing TC- and town-boundaries, and priced this assumption into the tender. Should this change materially, the contractor could end up providing services to a TC which comprises a much larger area and more residents, but at the same price. ----------	(11) A $2 company with no physical office nor staff wins a tender. Only PAP IBs understand this. The rest don't. AIM's right to terminate on events - 'material changes to the membership of a TC",  borders change, area gets bigger and more residents. None of these events impact the support services for a software. ABSOLUTELY NOTHING. So who proposed this clause? Why did'nt you protect residents' interests? Was it meant to FIX the opposition at all cost, screw the residents? Dr Teo, please speak simple English. This is a service denial clause. If the TC goes to an opposition party, AIM will strike the TC out. Now at that time, Aljunied was a PAP ward. So the AIM contract really protected the interest of residents, only in warped mind of Dr Teo. The real clause should read : "If you vote opposition, screw you"
(12) Since winning the tender, AIM has negotiated two extensions of the NCS contract until April 2013, at no increase in rates. The first extension was from November 2011 to October 2012, and the second from November 2012 to April 2013. The TCs received a substantial benefit in terms of getting the extensions from NCS beyond the original contract period, without any increase in prices. ---------	(12) Wow what fantastic valued added by AIM. Since AIM has no staff, they could by magic make NCS toe the line what 14 MPs were unable to do. What Dr Teo really meant was 14 PAP MPs were so inutile they cannot talk to a PAP owned GLC. OK let's re-do the math: (This part inserted 25 Oct 2019) (Assumption -- Aljunied + Hougang no longer under AIM contract after 2011 Election (last month Jul 2011) Nov 2010-Jul 2011 : 16 TCs paid $785 x 8 mths x 16  = $100,480 Jul 2011-Apr 2013 : 14 TCs paid $785 x 33 mths x 14 = $362,670 Sold $140,000- Paid  463,750 = LOSS of $323,150 What is the logic of Dr Teo for the sales & leaseback? Notice how cleverly Dr Teo did'nt mention this in his pata. This is the bottom line of the AIM fiasco: TCs paid $323,150 to AIM for what? - For negotiating with NCS to extend their support contract to TCs with no increase in rates. UNBELIEVABLE!!!!!
(13) AIM has also been actively working with several vendors to explore new software options and enhancements for the TCs. AIM has identified software from a number of possible vendors, and has invited them to make presentations to the TCs in order for a suitable option to be chosen.	(13)Chee that's fantastic. That a $2 company with no physical office or staff can do such a remarkable job that 14 MPs with $16,000 monthly allowances cannot. That AIM, with no working staff, knows better than the property management company of the town councils. That AIM, having inserted themselves into TC software management business, did their best to get a vendor that will kick them out.

Note: I edited comments above 25 Oct 2019. There are 16 town councils including Hougang & Aljunied. I have also expanded comment (12) to redo the math. This is an important part and I forgot - my bad).

Dr Teo's statement is dripping with inaccuracies and nonsense. It is nothing but doublespeak to defend the indefensible.

Not too sure what the new system that NEC tendered for about $16m is like. If they adopt the D&T suggestion of a separate entity to own the software, a new version of AIM, then the PAP is setting the ground for future disputes. What happens to any of the remaining 14 wards if the opposition takes over? Will IT services be denied just like Aljunied? Are residents' interest really served? $16m is a lot of money, paid out by residents. Is the message to residents actually "If you vote opposition, screw you". They way they screwed Aljunied.

A loosing PAP MP is petulant and juvenile if he takes the line, as done before, that having managed a ward, they have the right to withdraw whatever initiatives they put in. Residents don't belong to PAP. In the same way, a company does not belong to the CEO (unless he happens to be the sole shareholder) and so a departing CEO hands everything over log stock and barrel to an incoming CEO.Shame on you PAP MPs, if you think otherwise.

Singapore MRT model to blame for fare unsustainability

The previous blog debunked PAP's narratives for train fare increase and posited they are red herrings to hide the real cause for fare unsustainability. The elephant in the room is something the PAP does not understand, will not admit because it points to incompetence, or perpetuates because it suits their 'prosper the elites and pauper the poor' policies. Any of the 3 is totally unacceptable.

The Singapore system has been good fare-wise in the past, but at the expense of neglect in engineering and maintenance. With attention now refocused on maintenance, going forward, the fares will be locked in a spiral of upward adjustments. Mass rail transit systems are operating in deficits in most cities all over the world. Singapore will be no exception because we are based on more or less the same type of model used in other cities that are struggling.

The Hongkong model:

To explain why the Singapore system guarantees future fare increases, the best way is to show the Hongkong experience and why HK has the most profitable mass transit system in the world. The HK model is a bundled vertical structure where one single entity does the entire functions of a MRT system, namely infrastructure, rails, rolling stock, controls & signals, maintenance, and the running of the train service. The HK government does the planning of the mrt routes and everything else is left to MRTCL which is run, and funds itself, as a commercial enterprise. The government leases all the land required to MRTCL which builds the infrastructure.The land around mrt stations will increase in value naturally. Such surrounding land are also leased to MRTCL which develops them in partnership with property developers. MRTCL thus has a share in revenue whether real estate sales or rents from property development. The table below shows MRTCL revenue segments.

In 2015 for example, almost 60% of MRTCL revenue came from property and commercial related activities. Farebox contributed only 37% of total revenue. MRTCL is thus able to cross-subsidise fares thus ensuring upward pressure on fare adjustment is contained.

MRTCL has a small contribution of about 4% from global business, which is from managing mrt operations in other cities. It is able to do this having operated as a purely business enterprise and developed strong specialist skills in the business. Singapore, on the other hand, relies on a retail executive and generals, and continues to loose homegrown specialist and engineering skills as local PMETs are dropped off in preference for cheaper foreign labour.

Singapore model:

Singapore adopts a fully unbundled vertical structure. Infra building and train operation are separated. The government plans the routes and builds the infrastructure fully funded from budget. Infra management and the rest of the functions of running the mrt are in the hands of a multi-modal duopoly of SMRT and SBS Transit. These 2 entities operate the mrt and bus systems as well as handling the renting of premises in the stations and advertisements. Farebox revenue is the only significant revenue. Commercial activities contribute some, and zero from property development. Both SMRT and SBS Transit are therefore unable to cross-subsidise fares.

Mass rapid transit business require heavy maintenance and investments in hardware upgrading in order to offer a safe and high quality in service delivery. The weaknesses in the model are:

• Operators take full risk for farebox revenue. They can apply for fare increase using an adjustment formula which has a cap. A capped fare formula disincentivises operators to invest in maintenance and upgrades. 
• The operators have no ability to cross-subsidise from non-train service revenue.

Now that the PAP has finally got the idea that maintenance is important, the operators' expenditure will go north perpetually, which calls for fare revisions. The 2 weaknesses of the model guarantee upward pressure for fare increases into the future. Do note that PAP recognition of maintenance and safety issues was never driven by service delivery but by political concerns from backlash from the many breakdowns and accidents.

The use of SMRT and SBS Transit is the government's way of demonstrating competition. Nobody is buying this faux competition as it is public knowledge a cabal of PAP connected networks are deeply entrenched in the system, actually, in all spheres of socio-economic institutions in the country. The use of 2 operators is consistent with PAP layering approach mentality which negates the benefits of economies of scale and duplication of a lot of functions thus detrimental to the cost structure.

Why Hongkong model superior to Singapore's: 

The fact that the HK model is superior is seen in MRTCL's profitability. This is further reinforced by the Tokyo mrt system which has more or less same features as HK and is equally profitable.

The heart of the matter lies in something called Land Value Capture. It is a fact that land surrounding the mrt stations will rise in value. Who captures this appreciation in land value? In the HK system, LVC is fully cornered by the Public Private Partnerships of MRTCL, a public owned company, and property developer partners. This ensures MRTCL a continued source of revenues in rentals and property sales. In Singapore, LVC accrues in layers -- firstly to the government from land sales or leases and property taxes, then to property developers, on to property owners who collect rent, or final home owners who benefit from future price increases. Unlike MRTCL, Singapore mrt operators have zero share in this vast wealth creation by mrt stations. In HK, a large chunk of the LVC flows to the public indirectly in MRTCL and directly in cross-subsidised fares. In Singapore, LVC flows to the PAP locked away in reserves, and to a layered rich.

The PAP's paranoia for building reserves is why we ended up in this most inequitable way. Government land sales end up in the reserves, but future increase in land values are captured by the rich. It is the poor who form the bulk of mrt pax that contributes to the system, but the rich who milks the system. Look around and it is easy to see the REITs capture all the malls and spankling condos around the stations, the few family-owned and foreign property developers laughing all the way to the bank.

The Singapore model comes off the brains of million dollar salaried elites, of helicopter view people who cannot see the ground. The PAP's boast of competency falls flat in the Singapore model for mrt. They were unable to see 10 years ahead.

In 2000 HK govt floated MRTCL in the HK Stock Exchange and sold just 25%. By law the govt has to retain 50%, but they divested only 25% which earned them billions. The MRTCL counter has continued to climb northwards and it has a very prominent place in HK economy because of its role in land development around mrt stations.

On the other hand, Singapore has nothing to show but grand fumbles.  In the same year 2000 Singapore floated SMRT on the Singapore Stock Exchange. The counter garnered not much investor interest. In 2015 the government had to buy it back and privatise it, putting it under Temasek. In all those years, passengers had to live with breakdowns and accidents because the scrimped on maintenance to chase profits. Even the great Ho Ching, the most powerful woman in Singapore, is unable to do anything to improve profitability.

HK approach has basically been government hands off, letting MRTCL to run professionally as a private business enterprise. It has blossomed. On the other end of the spectrum, Singapore is a place where the PAP knows best in everything. Singapore's experience is a matter of too many officialdom's hands all over the place. It is suffocating when bureaucrats pretend to be great businessmen. In an effort to improve non-farebox revenue streams, they conducted a review in 2017 to see if commercial activities of existing mrt lines could be out-sourced rather than left in the hands of operators. In other words, PAP bureaucrats think they can be better businessmen than SMRT and SBS Transit. In the coming new Thomson-East Coast line, the LTA has out-sourced this in some complicated ways. What is happening is simply yet additional red tape and messy layering of production activities. These are efforts to unbundle a train operator's revenue stream to an outsourced entity at a time when fares are not sustainable. We just have to hope there is no S$2 corporation cornering some contracts like the shameful AIM episode.

The need to increase train fares is due to the nature of the business which requires heavy investments in infra, maintenance and continuous ungrading. Farebox revenue is insufficient to sustain a mass rapid transit that meets acceptable safety and service delivery levels at affordable fares. Subsidies of one form or another is inevitable. The HK model shows how this can be achieved. The Singapore model is a renter economic approach, where wealth created by the mrt stations in terms of value adding to the land, is captured by the government and the rich. The PAP has no empathy for the poor who needs to dig deeper into their pockets for higher fares. They will not explain the real reason mrt operations are not sustainable without fare increase is due to either their incompetence in adopting a poor systems model, or their elitist policy of letting the rich corner land value capture.

The PAP cabal that preaches a $0.10 or a $0.07 increase in fares is no big deal is no longer relevant to the Singapore poor who has to suffer for the mistakes they made.

See Debunking PAP's reasons for train fare increases

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Debunking PAP's reasons for train fare increase

Singapore train operators claim fares are unsustainable and need to be re-adjusted. That may be true. But without identifying the true nature of the problems, a fare hike is just a knee jerk reaction, not a long term solution.

PAP has provided 4 reasons which are fallacies of arguments from authority. They should be debunked:

Fallacy #1: Inflation pushes cost up -- manpower is a prime cost but has been contained by importing cheaper foreign labour and suppressing wages.

Fallacy # 2: High price of oil -- Energy cost is heavy but price of oil has never been cheaper since coming down from the heights of 2007-2014.

Fallacy # 3: Fares have not been raised for many years -- This really shows crap mentality. The fact that fares have not been raised for years is not a cause to increase it.That fares have not been raised were due to 2 reasons:
(1) Train operation contract provides for a regulated pricing formula with a price cap. Operators take full farebox revenue risks. Fares cannot be increased beyond the contracted cap. Operators can apply to increase fares yearly, but it cannot go beyond the cap.
(2) During 2002-2012 under Saw Phaik Hwa' watch, neglect of maintenance meant a  lot of cost savings which led to good profits. Short term good bottom lines traded for long term systems deterioration. But shareholders were pleased and the CEO got her bonus shares. So well done, there were good profits, no need to increase fares in those years.

Fallacy #4 : Singapore train fares are very affordable. This is so silly. The fact that fares are affordable is not a reason to raise it. The Palovian report by the Straits Times in October 2018 that Singapore has the 2nd most affordable train fares is the same old Machiavellian move of the PAP to soften the ground before they move in for the kill. It was a report by the Nanyang Technological University commissioned by the regulating authority, PTC. The finding was Singapore has the 2nd most affordable train fares out of 12 cities surveyed. The NTU report can be argued against in so many ways. It looked at an affordability index based on certain criteria which did not take into consideration many other critical factors that differ from city to city -- like cost of living, like alternative private vehicles are the most expensive in the world. It was also based on the population above the 2nd quintile household group, the very people who can afford some price increases. Should'nt the focus be on those below the 2nd quintile?

The government owes it to the people to provide satisfactory account on two issues:
(a) Increased density of population over the years must have improved economies of scale significantly. From 2008 to 2018 daily ridership increased by 100% to 310,000 trips. Given that the major variable labour cost have been contained by importing cheaper foreign sources and price of oil has fallen, where did the benefits of improved economies of scale and doubling of farebox revenue go?

(b) Ten years of neglect in maintenance under CEO Saw Phaik Hwa caused serious systems deterioration leading to breakdowns, accidents, and poor service delivery. The increase in running cost in the last 3 years is mostly attributable to heavy maintenance refocus to plug the long term damage done under CEO Saw.  The PAP should do the right things:

• Stop the juvenile jibes of 'if you want better service, be prepared to pay more". Their people caused service deterioration due to sacrificing maintenance for profits.
• Admit increased cost of operation is due to beefing up maintenance. 
• Explain who made M/s Saw Phaik Hwa CEO in 2008. She was a round peg in a square hole -- a retail executive with zero experience in urban rail transit operation. Folks will remember her lavish lifestyle, her Ferrari, Mercedes, close to S$2m salary, and share options. Most of all, we remember her famous quote:
  

"People can board the train - it is whether they choose to."

• Convince commuters why they think another army general CEO is not yet another round peg.

The PAP's narrative is but a collection of red herrings to deflect focus on the real cause for the non-sustainability of train fares. Serious mistakes have been made, but the PAP will make no admission. The root cause is the failure of the Singapore model for running a mass rapid transport system. Period.

A follow up blog explains why PAP's model for Singapore mrt is the root cause of fare unsustainability and why it guarantees a perpetual upward revision.


See Singapore MRT model to blame for fare unsustainability

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Foreign interference - a Pan El reminder

Executive paranoia was on full display recently. The government and PAP sycophants, ie those PAP spin masters and internet brigades, are one in this. One foreign employee working as journalist in an online alternate news site is going to take down our country. Some foreign friends investing in online alternate news site is foreign interference.

Yet the state's mouth piece Straits Times is a public company whose ordinary shares can by acquired by foreigners. OK, I get it, there are restrictions in place to prevent management and ownership falling into foreign hands. Online news media too, can have management and ownership structures in place that ensures no foreign participation in its operation. So let's call a spade a spade, there are foreign investors in ST. 

While the elites are fearful of foreigners brainwashing the low caste people living in the Mariana Trench of Singapore, should we, the low lives to them, worry that foreign interference can take place at the highest level of our society? Here's something to ponder.

The older generation may well remember the Pan El crisis in the 1980s, millennials may be too young to understand. Pan Electric group comprised of 3 companies listed on the Singapore Stock Exchange. At one point Pan El was on the verge of financial collapse, then along came a white knight in Tan Koon Swan who pumped in S$40m interest free loan to keep Pan El afloat.

Tan was then a prominent Malaysian politician and a shrewd corporate strategist. He was leader of the Malaysian Chinese Association, a component in the 3 race-based party coalition government of Malaysia. Tan's political star and MCA controlled corporations via Multi Purpose Holdings were so hot it threatened the Malay components in the ruling coalition. His ascendancy was viewed by some as destabilising the racial politics of the country.

Using his proxies Tan Kok Liang and Peter Tham, who were directors in Pan El,  Tan then went on to play up Pan El group shares through a web of forward contracts, selling to the public, and intra-group arrangements. When shares were purchased in SGX, they had to be paid for in 7 days time. Forward contracts was the game played by selling the shares before settlement date ie a buyer sold the shares before he had made payment and taken delivery. That meant a share can be turned around several times which left the system exposed as in the back end, the amount of outstanding settlement was several times the number of scrips in the market and a string of buyers with ownership not yet legally transferred. If the musical chair stops, it will be a mess.

To facilitate the game, Tan worked through two dedicated brokers. One was Associated Asian Securities (of which Peter Tham was also a director) and Alpha Securities (ran by Goh Kian Chee, son of Dy Prime Minster Goh Kheng Swee).

The musical chair stopped when Pan El defaulted on a S$75m loan. All hell broke loose and SGX was forced to close the exchange for 3 days. In 1986 Tan faced 15 charges. The prosecutor was Singapore crime buster PP Glenn Knight, an upstart young civil servant very much in Lee Kuan Yew's sight.

Initially, bail was set at S$20m, which was a world record at the time. As additional charges were slapped on Tan, a further S$20m was imposed. Tan posted bail and was back in Malaysia where he was assured by Prime Minister Mahathir that it won't be a major problem and he should go to Singapore to stand trial.

Market perception was that Tan will get away with some fine. He was after all, not even a director of Pan El. Singapore securities legislation and the Companies Act then were not airtight. As prominent Malaysian politician Lim Kit Siang pointed out, the defence lawyer never protested at the extremely excessive S$40m bond, an indication that some agreement had been reached. That had credibility as as the PP proceeded with only a single charge of abetment of criminal breach of trust, the rest were taken into consideration. Tan pleaded guilty and waited for the sentencing.

Lai Kew Chai (J) gave Tan a shocker and sentenced him to 2 years in jail and S$500,000 fine.

At the time, Malaysia was in the process of calling for an election, thus colouring a political background that was extremely sensitive. The timing of the trial had implications for the election date. The Malay component in the ruling coalition, UMNO, wanted Tan out of the picture, whilst the powerful MCA of course wanted Tan unrestrained. Singapore thus had a difficult task of maintaining judicial sovereignty, whilst the government obviously had some foreign diplomacy considerations. To deny that such a situation never existed is to be naive. The reality was Singapore found itself in an accidental position to influence Malaysian election.

Around the time, Mahathir made a trip to Singapore. Speculation was ripe that Singapore did its northern neighbour a big favour. Tan was in prison, and out of Malaysia politics, something that Mahathir could never have done himself.

Was there an ignominious sentence to placate Malaysia. A small sacrifice of principles which pleased a noisy neighbour, perhaps for some quid pro quo, and at the same time, demonstrating Singapore's judicial sovereignty in the jailing of a top Malaysian politician. In other words, was there foreign interference in our domestic affairs?

A possible answer to this may be found in the book "The Prosecutor" which Glenn Knight wrote in 2012. In it he covered several high profile cases where he was prosecutor. On Pan El, he made reference to CJ Yong Pung How's comments in the 1996 case of Cheam Tat Pang vs PP. Based on that reading of the law, Knight's conclusion was the charge against Tan was "technically wrong". In other words, Tan was wrongly charged. (That does not mean he committed no crime).

Knight's revelation was a big puzzle. He himself was charged in 1991 for some minor offence and was disbarred in 1994. He was out of favour, the reasons are top secret to this day. Knight spent years in the doldrums until he was given a reprieve and re-instated to the bar in 2007. Having had the powerful elites going for his throat once, what was Knight's motivation to denounce a misstep by the judiciary? My point in bringing this up is to tantalise the possibility that it's a coded way for a participant in the Pan El trial to suggest there was something not quite right. Could it be an interference with the court. A foreign interference?
      

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Addendum:

Tan Kok Liang and Peter Tam went to jail. Goh Chee Kian was never charged.

The 'technical error' Knight referred to has to do with the interpretation of one important provision section 157(1) of the Companies Act which prescribes that a director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office.

CJ Yong Pung How's comment was in the problem of measuring honesty -- whether subjectively or objectively. Whole books can be written on such legal semantics. Indeed, the Attorney General's Office objected to Knight's reference to Pan El's 'technical mistake' with a press release. You can read it here.

I don't understand the high falutin legal arguments. My simple mind asks only this - why the charge under 157(1) when Tan Koon Swan was never a director of Pan El in the first place?

Hey Singapore, there's an easier way to settle libel

A few hundred years ago, people settled personal disputes with duels. If someone was insulted, or his girlfriend was molested, or his reputation was tarnished by gossip, he did not go running to a lawyer. He would have thrown a grove at the transgressor. That is a challenge to a duel.

Despite the fatal outcome, the duels were conducted in very gentlemanly ways. One does'nt challenge someone who is much older and physically weaker, nor did nobility force it on the working class. A noble man challenged only their kind.

Never were they in it for the money. They sought no damages. It was'nt about integrity. It was all about honour. If one's honour was impugned, they sought redress to reclaim their honour by a duel.

The tradition of duels was universal although it is very much romanticised in the West, especially in the travails of the Three Musketeers. Many noblemen, unfortunately, perished in such duels. One such example was Evariste Galois, a French mathematician who died from his wounds in a duel in 1832. He was only 20 and had just written his Galois theory that provides a connection between field theory and group theory. It's left to wonder what he could have contributed to the world of mathematics had he lived longer.

There were persons known as 'seconds' who acted as intermediaries These were usually close friends of the duelists, who met to discuss and see if the dispute can be settled without a duel. When this failed, then the duel proceeded. But for these 'seconds' the world could have been different had they not stopped the duels between Abraham Lincoln and state auditor James Shields in 1842, and in 1864 the duel between Mark Twain and a newspaper editor.

If the duel was to proceed, in their gentlemanly ways, they agreed on the details. Most notably on the choice of weapons, the time, and the honour field, which was the place where the duel was to take place.

Despite the deadly serious business, there were some morbid humour. In 1860 Otto von Bismark challenged Rudolf Virchow to a duel in which the latter chose as the means of the duel, two pork sausages, one infected with roundworms. The two would each choose which sausage to eat. Bismark declined. There was also the case of two Frenchmen who fought in balloons over Paris, each attempting to take pot shots at the other's balloon to bring it down.  Two other Frenchmen won hands down with this challenge -- they dueled by using billiard balls to throw at each other.

Today, a political libel suit in Singapore is a power play. The recently concluded suit brought by blogger Leong Sze Hian against the Prime Minister Lee Hsien Loong serves to underline this. The plaintiff's lawyer spent 1-1/2 hours arguing his case. The prime minister's senior counsel sat quietly without uttering a word. The judge threw Leong's case out and awarded cost of $23,000. That's more than 1 year's salary of the working class.

Today, it's not about honour, it's about damages. The more the better to bury the defendant with.

Today it's not a gentlemanly challenge of nobleman vs nobleman. The king will thumb down on the lowest digit in the economy if he dares to point out the emperor's clothe.

Today, the weapons are the senior counsels who count their earnings by the minutes. They are not like the 'seconds' who were there to help settle disputes as in the old days, but to 'duel' in air-conditioned comfort using the safety of words as weapons. They are there to fight, not to help prevent duels.

Today, it's a money game. The 'seconds' aka legal counsels, walk away with hundreds of thousands of dollars in legal fees, the privileged winners are awarded millions of dollars in damages, and tax payers have to suck up the cost of the judiciary process -- the electricity cost of the air-conditioned court room, the judges' salaries, the salaries of other judiciary employees, etc.

Today, the political libel suits are meant to be firstly vindictive - bankrupt the other party and prevent him his livelihood; secondly to instill fear in the low life mediocre mass of the population by cowering them to curtail the exercise of freedom of speech. It is being weaponised to protect the elites and the powerful.

Today, the 'field of honour' where the duels are conducted is the courthouse. It no longer is a private battle between the antagonists, but where proxies are used and the outcome depends on the intellectual capacity and the impartiality of an uninvolved entity in the form of the judge.

The deluge of political libel suits in Singapore warrants a more out-of-the-box approach. Why waste tax payers money going to a mandatory 'field of honour', ie the court, where universal libel doctrines crafted over 800 years since the signing of Magna Carta in 1215 do not apply. Uniquely Singapore autochtonous doctrines on libel assure outcomes are never a surprise, making court appearances a waste of time and resources. It is high time those in power cease and desist wasting tax payers money each time they are pissed off by somebody who does something that irks them.

There are easier and more fun ways to settle defamation disputes. We can have duels that do not break any laws, and the public have fun watching the fight. Afterall, let's be frank about it, a spectacle is what we want, so that wannabe dissenters can be cowed. Let's stop wasting public money on court battles. Let's have it out in public in a fun way. The antagonists have the right to choose the way the duel is to be conducted. I have a few suggestions :

• Let's have a money game, since it is all about trying to exact compensation. Have stacks of Singapore dollar currencies bundled and in sacks. Have these sacks placed at Supreme Court building. Opponents will carry these sacks and run from Supreme Court to Parliament House. Winner is the one who can carry the most number of sacks within one hour.
• Let's have a challenge of car polishing. Have two Mercedes Benz and see who can make their vehicle shine best. If one does'nt own a Benz, go find a Grab driver who has one. Advertisers are allowed to place their products on display at the same time. Proceeds from advertising goes to the neighbourhood senior citizen cardboard or garbage bin pickers.
• Or how about showing who has the bigger bank account. Needless to say, the one who has the biggest balance wins the duel. For this purpose, offshore bank accounts qualify.
• Or how about an ungentlemanly way. Opponents put their wife to the task. Who has the more intelligent wife wins. Of course, in Singapore, intelligence means the capability to earn more. Let's open up CPF and IRA returns as the basis.
• Here is my favourite idea. Have the antagonists sit in Parliament to answer the queries of members of parliament. Make it mandatory for MPs to query. That ought to solve the perennial problem of MPs falling asleep in the House and poor attendance. Outcome depends on a vote in the House. The reader will cry foul as the majority ruling party will surely mean a skewed result. To which I should point out that it makes no difference with a court ruling, historically speaking.

A Time Capsule of more than a hundred years old in Paris was recently opened. In it, amongst many other old stuff, was an article by National Geographic. It was a satire on duels and the antagonists were two frogs. The article became known as 'The Battle Of The Frogs'. The satire pokes fun at humanity and tells us that we are after all, simply humans and everyone has their follies and mistakes in life. Whyfor the haste to duel?

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