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Carl A Trocki
In Singapore, where the business of government really is business, the globalization of Singapore's government-controlled companies continues to be one of the government's major policies. Failing to nail down an 'open skies' agreement with Australia's Qantas Airline, Singapore Airlines (SIA) was encouraged by Australian Trade Minister, Mark Vaile, who said he would support a possible merger of Qantas and SIA. SIA had hoped to gain access to the lucrative trans-Pacific route between Sydney and Los Angeles, which has been monopolized by Qantas and United.
SIA's efforts were not entirely without success. They recently concluded an open skies agreement with Hong Kong. Now both have unlimited access to each other's routes.
SingTel too, came up short in a bid to acquire a 26 per cent share in Pakistan Telecommunication Co. Ltd. when its offer of US$1.2 billion was topped by the US$2.6 billion bid from Etisalat of the United Arab Emirates. SingTel, which depends on overseas investments for growth has been expanding its interests in South Asia. Earlier this year they acquired 45 per cent stake in Bangladesh's number 3 telecommunications company and before that they increased their stake in Bharti TeleVentures, India's largest mobile operator.
Singapore itself continues to have difficulties with foreign investors coming to Singapore. In May the government was forced to reverse its decision to place a revenue limit on the two casinos to be built in Singapore. Gaming companies from South Africa, the USA, Australia and Malaysia had objected to the rule that only 50 per cent of their income could be derived from gambling profits. The government had ruled that the other half had to come from hotels, shops, theme parks and condominiums.
Steve Wynn, US casino magnate had complained: 'There is an awful lot of control and direction in the documents we've received, frankly speaking, is unsophisticated. Its control and direction given by people who've never done this before. I don't think it's appropriate to tell someone: give us an attraction that's irresistible, that will reach into India and China - but we'll tell you how to design it.'
Although the 50 per cent limit was dropped, Singapore retained the requirement for a S$100 entry fee for Singapore citizens and permanent residents.
In its endless petty squabbles with its northern neighbour, Singapore is now faced with the need to find a resolution to the question of whether they will permit a 'crooked bridge' to replace the 80 year-old Causeway linking the city-state with Johor Bahru. Malaysia has begun construction of a large Customs, Immigration and Quarantine complex (CIQ) whose location will require a curved bridge, if it is to link with the highway and other complexes on the Singapore side of the Strait.
WATCHPOINT: Look for Singapore to push for further in-roads in the Australian aviation market.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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