Was waterfront strip worth billionaire Ng’s $165.8 mil?

Singapore billionaire Ng Teng Fong's S$165.8 million ($107 million) winning bid for a downtown waterfront site will help him secure a hold in the key corridor of the city's financial district, analysts said. The developer, who bought the site through his Hong Kong unit Sino Land, plans to build a luxury boutique hotel with restaurants, shops and entertainment outlets, the government said in a statement. Ng owns the Fullerton Hotel and One Fullerton entertainment complex, located next to the site.

The price also exceeded the S$110 million it paid for the Fullerton site in October 1997, a property that's five times larger in size and sold at the start of the Asian economic crisis. Securing the site now allows the developer to build complementary properties instead of competing with the Fullerton.

The purchase price is 53 percent higher than a rival bid by Park Hotel Orchard, which offered to pay S$108.3 million. Sino Land's price works out to S$16,580 per square meter for a site with a 60-year lease, compared with the Fullerton's S$2,188 per square meter price on a property with a 99-year lease.

Sino Land said in a statement the new development would complement what it has in the area, and envisions a “Fisherman's Wharf” type project to draw tourists. Singapore sold the site for an attraction to help its target of doubling the number of overseas visitors to 17 million by 2015.

The new site costs 7.5 times more per square meter than the 99-year leasehold Fullerton site and only comes with a 60-year lease. It was $57.5 million or 53 percent higher than the next bid. Did Ng pay too much? There will be further parcels up for sale in the first half of next year. Will this affect the pricing of those land parcels?

Let us know what you think.

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Could tax revenue from IRs decrease need for GST hike?




Tax revenues from the two integrated resorts could reach up to S$3.1 billion a year. According to a Citigroup analyst, the government can expect the money influx within the first two years of operation.

Chua Hak Bin, Director, Asia Pacific Economic and Market Analysis, Citigroup, said, "When the two integrated resorts come onstream in 2010, they are expected to generate some S$2.7 billion in value-add for Singapore's GDP, and create 35,000 new jobs."

"I think that if you do some estimation of the possibility of the betting duties that can be raised from that, and looking from the experience of Macau, that can be quite substantial."

Many observers believe that the Singapore government can expect gaming tax revenues from the two resorts in the range of S$1.5 and S$3.1 billion.

"I think betting duties in Singapore now is S$1 billion, but there's a possibility of it going up to about US$2 to US$3 billion. For example, in Macau, it actually tripled over a span of three or four years. So looking at that, that's actually equivalent to a 2 to 4 percent GST hike, and that's quite substantial," said Mr Chua.

The assumption by Citigroup is based on 10 percent of the Singapore population visiting the integrated resorts per year. Membership fees for the casinos are projected at S$2,000 each for locals, and entry tax at about S$100 each.

With these numbers, Citigroup argues that gaming tax revenues could be equivalent to the proposed two percentage point hike in the Goods and Services Tax. Thus, there may be less of a need for a GST rise.

Mr Chua added, "We did have Hong Kong come out to say that the GST hike on their side is not a possibility now. That, therefore, rules out the possibility of Hong Kong also cutting their corporate tax rate. Does this mean that there's less need for Singapore to increase the GST as a consequence?"

The government plans to raise the GST to 7 percent from the current 5 percent to build up its resources for the future and fund social programmes for the elderly and lower income.

It has also said there will be an assistance package for the lower income that will more than offset the effect of the GST hike.

The government is set to gain huge amounts revenue from the resorts. A good proposal would be to actually increase the projected GST hike at a lower rate since there is expected revenue for the government from another source.

I believe what Singaporeans ultimately want to see would be the revenue from the GST increase as well as the revenues from the resorts be put back into them. They want to see tangible and transparent proof that the money has been invested back to the people. If this can be achieved, then all will be smiles.


It's hard to keep everybody happy, but with that kind of expected income, I bet the Singapore government would not disappoint. What are your opinions on this?

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Internet war heats up in Singapore as free Internet access begins


Singapore will extend its plan to provide free wireless high-speed Internet access to three years from two as part of government efforts to raise the city-state's competitiveness and increase technology exports.

Access in areas known as Wi-Fi hotspots will be provided from Dec. 1, one month ahead of schedule, the Infocomm Development Authority of Singapore said in a statement. Users can connect to the Internet at speeds as fast as 512 kilobits per second at these hotspots, which will number 5,000 by September, from 900 at present, the regulator said.

The Wireless@SG service is part of Singapore's plan to improve its technology infrastructure and boost competitiveness against countries in the region. The government forecasts technology-related exports to rise threefold and 80,000 jobs to be created in that industry within the next 10 years under its Intelligent Nation 2015 plan.

SingTel, Southeast Asia's largest telephone company, iCell and Qmax will invest in and operate the wireless network. They are jointly spending about S$100 million ($65 million), while the government is contributing as much as S$30 million.

SingTel and iCell will also offer Wi-Fi Internet access of as fast as 1 megabit per second for S$9.90 a month. An average song takes about 40 seconds to download at 1 Mbps.

That's cheaper than planned services from MobileOne, the smallest of Singapore's three mobile-phone companies. MobileOne yesterday said it will offer wireless high-speed Internet access for S$22 to S$68 per month from Dec. 6. The company will use high-speed downlink packet access, or HSDPA, to offer the nationwide services, rather than relying on hotspots.

"Our tariff plans for the M1 broadband service are very competitive, given that we provide islandwide coverage, with speeds of up to 3.6 megabits per second," MobileOne spokesman Chua Swee Kiat said in an e-mailed statement.


With 4000 more hotspots expected by September 2007, accessibility to the internet is getting easier. How much of an impact would the Wireless@SG service have on home users? How low will Starhub and MobileOne have to set their internet rates to retain their customers?
What do your think?

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Singapore's REIT market expected to grow 200% in five years

Singapore's S$10 billion ($6.4 billion) real estate investment trust industry may triple in market value in the next five to 10 years as more assets become available, the city-state's biggest developer said.

CapitaLand, which manages three of Singapore's 13 property trusts, said tax breaks and other incentives helped boost investor interest in the industry. The developer sold shares in the first Singapore REIT, CapitaMall Trust, in 2002.

Singapore has “deregulated our rules and regulations,” Liew Mun Leong, CapitaLand's chief executive officer, said in an interview. “There are a lot of properties and assets that can be put into REITS. If we have our way, we can do much more.”

Singapore will probably retain its lead over Hong Kong as the biggest REIT market in Asia excluding Japan and Australia in the next four years because it has the most “liberal” tax policies globally, Goldman Sachs Group said in June. The city-state decided to forgo taxes for REIT payouts to individuals and cut taxes on dividends for overseas investors.

Singapore developers are adding variety to REIT assets to continue attracting investors. Property prices are rising as well. But for how long? Is it a bubble waiting to burst?

Let us know what you think.

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Singapore budget carriers circling around result of Changi-KL route

Singapore said it's waiting for Malaysia's decision on whether to allow discount airlines to fly the route between the island state and its neighbor's capital city, Transport Minister Raymond Lim said.

Lim, who is also the second minister for foreign affairs, said Singapore hasn't heard from Malaysia, which has completed a study to allow budget carriers to fly the route. “We await their proposal,” Lim said. “We have been ready to expand air services agreement for quite some time now and it's timely to do so. It's a great pity that we have not revised this particular agreement for the past 20 years.”

Singapore Airlines Ltd. (SIA) and Malaysian Airline System Bhd. (MAS), which currently dominate the flights between the city-state and the Malaysian capital of Kuala Lumpur, in September 1988 agreed to divide their combine revenue on the route.

“The route, a cash-cow for Malaysia Airlines and Singapore Airlines, is in the sights of Tiger Airways, AirAsia and Jetstar Asia, which all promise to offer significantly lower fares,” Peter Harbison, executive chairman of the Centre for Asia Pacific Aviation said in a Sept. 6 bulletin.

Although it may mean a dip in revenue for state carriers SIA and MAS, greater access between the two countries will boost tourism, benefit their economies and fuel traffic at their airports. The move may also hasten a 2008 air services agreement, where the 10-member grouping of the Association of Southeast Asian Nations, or Asean, must allow carriers freer access in the region.

MAS is strongly opposed to opening up this route.

So will it happen? Liberalisation is important but would Malaysia protect MAS? Would we see SIA and MAS step back for Tiger and Airasia to take centrestage?

Let us know what you think.

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Singtel set to tackle Starhub for EPL licence

As the Reds of Manchester United toppled Chelsea off the summit of the EPL in recent weeks, another red seeks to do the same, here in Singapore. With its bid to air the highly popular EPL matches as well as its application for a commercial cable-TV license, Singtel is set to challenge Starhub for dominance of the local cable-TV market.

The soccer matches it plans to broadcast will be those held between August 2007 and May 2010, Singtel said in a statement. It also plans to use its existing infrastructure for the new service, the company said.

"Our intention is to offer pay-TV services to deliver high definition content over Singtel's telecommunications network," the phone company said. “We are also working with other content partners to provide entertainment services."

The license, if granted, would break Starhub's monopoly as the sole commercial cable-TV operator in the island-state of 4.4 million people. The two companies are already competing in areas such as fixed-line and wireless phone services, as well as offering Internet connections to consumers.

But Starhub is unperturbed. "We have always said that we welcome competition when the competition brings fresh content and a variety of new channels to the market," Jeannie Ong, Starhub's spokeswoman, told Bloomberg. "We are certain that our competitor is aware that entering the pay-TV business will be a difficult venture, and is likely to be loss-making for a long time."

It seems that the battle of cable-TV providers has just begun. And like the EPL, it is a mouthwatering prospect, with the possibility of new channels and lower prices for all. But will Singtel still be able to win the masses over to its cable service even if it doesn't get the EPL rights? What can Starhub do to protect its patch of grass? What can Singtel offer that Starhub doesn't already have?

Stay tuned.

And tell us what you think.

- Zaky Jailani

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The Music Industry sets out to sink piracy

In the past few weeks, more than 8,000 new legal cases have been launched against illegal music downloaders across 17 countries, the International Federation of the Phonographic Industry (IFPI) revealed. The industry-sponsored IFPI has been at the forefront of the battle against pirated digital music with its aims of redirecting the billions of dollars that currently line the pockets of pirates into legal, bonafide channels.

Singapore is in the thick of the action as the Recording Industry Association of Singapore (RIAS) has reported 25 new cases of illegal music file-sharing and downloading to the authorities. This comes only days after the police raided the homes of seven illegal music downloaders. RIAS says that the new cases involve users who are illegally downloading and sharing music files via international networks like Limewire and Gnutella. It has filed these cases with the police, in line with international efforts to deter copyright theft.

In October last year, over 800 instant warning messages were sent to illegal music file-sharers. That number dipped to 32 last month alone. In February, two Singaporean men were jailed four months and three months respectively for distributing hundreds of pirated digital music files through an Internet chat program. They were the first to be punished in Singapore for a non profit-making offence under the city-state's Copyright Act. A third offender, who was only 16 years old, received a formal warning.

With the net tightening further around the pirates, the question remains for how long music piracy can continue to flourish here? Does this latest round of arrests finally herald the boom of the legal online music industry? Or will Pirates find ways to clean up their tracks with more sophisticated software? Let us know what you think.

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Stalled for takeoff- SIA still waiting for 380 delivery, but for how long ?

Airbus' launch of the much anticipated super-jumbo A-380 is shaping up as a text book case of how not to manage a new product launch. And with Singapore Airlines as its biggest customer the impact of Airbus' failings may well be felt here. It was just a few years ago that SIA announced it would be the first to purchase and the first to fly the new super plane - capable of moving up to 800 people in one flight. But the announcement on October 2 that the A380 would again be stalled must put into question the roll-out of the A380 especially as capacity demands on the Singapore to Europe route are fairly full and SIA will be looking to find replacements for the A380 should it not be delivered on time. Many people are beginning to wonder if the miracle of modern engineering is actually a lame duck or worse, a titanic mistake. SIA for its part is still in the dark on when the planes will actually be delivered, with spokesman Stephen Foreshaw telling reporters: "We're awaiting details from them to advise us of the delays on the delivery positions."

Which of course begs two questions. Firstly, just how much does SIA really know about the extent of the delays and when they can expect to press the planes into service? It seems that the answer is not much. The second is then how much Airbus really knows about the length and nature of the delays? Again, it seems like not much. Which is really troubling for Airbus customers like SIA. It is not as if Airbus has not known there are delays in its program - this is the third time they announced delays. What is troubling is what it doesn't know - namely when it will finish the planes. With SIA having the biggest order of A380's among Asian carriers and such an uncertain future in terms of deliverability of the aircraft, might it be time to look to alternatives? SIA already has six Boeing 777-300 ER's coming online later this year which will ease capacity fears, and will raise the fleet size to 90 planes, of which 85 are made by Boeing. So the A-380 was Airbus' big opportunity to snare one of the world's most important carriers, but it is so far proving unable to deliver. SIA has an order for 20 new Airbus A350s with an option for 20 more due in 2012, but surely the hitherto Boeing shop will have to look carefully at Airbus as its partner. Faulty wiring is rumoured to be the latest reason for the third delay in scheduled production completion, which has angered customers and sparked the departure of two top executives from EADS, the shares of which have plunged 29 percent this year. The A380 was conceived by Airbus in an attempt to stay ahead of its major competitor Boeing. Now, it looks like Boeing may be able to cash in on Airbus' inability to deliver. Just four A380s are now expected to be ready next year, less than half the number predicted. Singapore Airlines, which has the biggest order for A380s among Asian carriers, (Emirates is the largest customer with orders for 45 planes) ordered nine more of the superjumbo in July, taking their total to 19. The first delivery is scheduled for December, more than six months behind the initial schedule.

Operations will probably not be disrupted by the A380 delay because Singapore Airlines is due to take delivery of 777-300ERs made by Boeing Co. by the end of this year, however reputational damage is potentially enormous.

So will the delays affect SIA, will they buy more Boeings instead, or lease planes until the A380s come on-line ? Tell us what you think.

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