Good News Day
Today Singaporeans are greeted by another piece of good news. The 3 power companies will be sold to commercial operators who have promised to improve the system and bring down the cost. There will be another first in introducing a new meter and electronic payment systems. New meters will be introduced to measure usage. Meter cost has come down. Users will have to pay upfront to help them manage their usage. While introducing all the new processes and equipment, the new operators will have to bid with other interested parties for the gencos. Obviously they will have to pay a premium for the right to buy and operate them. Unless the existing gencos are going to sell them below cost, which is unlikely, they will have to invest quite a substantial sum initially. Their sunk cost and operating cost cannot be lower than the present operators. With all these costs and with profits in mind, it is amazing that they can reduce the cost of users and the present gencos cannot, and make profits some more. It must be the efficiency of privatisation and competition between 2 or 3 operators. You can be sure that it is a free market and there will not be any cartel or price fixing. Singaporeans can look forward to more efficient and cheaper power supply.