S'pore government to remain in critical sectors of economy
S'pore government to remain in critical sectors of economy
Agence France-Presse, Singapore
Singapore will retain control of companies it deems critical
to the economy such as airport, seaport and utilities, but is
willing to dilute its interest in other sectors, the state
investment arm said Wednesday.
Temasek Holdings Ltd. said it will play a more active role in
its stable of companies to help them expand beyond the small
domestic market, even if its shareholdings are reduced in the
process.
Temasek will divest its holdings in companies which have no
potential to grow beyond Singapore.
"Government needs to own and control companies for various
reasons. These include critical resources -- where ownership of a
resource is critical to Singapore's security or economic well-
being," it said in its newly unveiled charter. It cited water,
power and gas grids as well as the airport and seaport.
The government also needs to have a controlling stake in
companies such as public broadcasting, gaming, healthcare,
education and housing to enable the state to achieve "specific
public policy objectives".
Businesses in these sectors were categorized into a Group A
where the government "will continue to hold majority or
significant stakes... for as long as there is specific
requirement for government ownership or support."
Other Temasek businesses such as port operator PSA Corp. and
DBS Bank, which are defined as those with the potential to become
regional or global players, were categorized under Group B.
"Temasek is open to Group B companies partnering other
companies or shareholders to regionalism or internationalize
where it makes strategic or commercial sense," the charter said.
"Temasek is prepared to dilute its stake through the issuance
of new shares or mergers or acquisitions in order to support the
long-term success of these companies as regional or international
players."
Temasek chairman, S. Dhanabalan, would not give a time frame
for divestment nor identify specific companies.
"We have no time frame because to tell you the number of
companies or which companies and the time frame, will be to
actually destroy value for them," he told a news conference.
"We don't want to destabilize the staff, the customers, we
don't want to give some advantage to competitors.
"There are many issues that need to be taken into
consideration before we divest, but those (companies) that are
not relevant as defined ... we will divest at an appropriate time
when the market is right," he said.
Temasek executive director Ho Ching, the wife of Deputy Prime
Minister Lee Hsien Loong, said that in areas where the government
has a "natural monopoly", it was up to the state to decide the
extent of its involvement.
She cited the seaport where Prime Minister Goh Chok Tong has
directed the Maritime and Port Authority to draw up a competition
framework to allow competitors to PSA Corp.
"When such a framework is ready, I think the government will
likely see less and less requirement for it to hold a majority or
controlling stake. So there are different ways of playing the
game and we will have to see what will make sense in each of the
cases," Ho said.
"There have been arguments before that the airport should be
corporatized or privatized, but this is something where the
government has to take a long hard look at its own needs from the
total Singapore perspective before it comes to a decision."
Government-linked companies, including those in Temasek's
stable, contributed about 13 percent of the gross domestic
product as of 1998, the latest reported valuation.
There has been criticism that government influence in the
economy was crowding out the private sector and hampering the
expansion of domestic companies.