10/22/2008

Preventing supernormal profits

Ho Geok Choo wanted to know why the govt did not set up an independent body to regulate electricity tariffs after the 21% hike. Iswaran's reply is that too much regulations mean that there will be regulatory risk. And 'If there's more regulatory risk, you must expect that electricity generating companies here will expect a higher rate of return than what they currently have.' And because we don't have independent regulatory body, 'Singapore Power...does not earned a "supernormal rate of return".' SP only earned $1 billion in profit last year. With independent regulatory body, they could probably earn $2 billion or more and the tariff hike could be more than 21%. Whew, Singaporeans are so lucky.

10 comments:

Anonymous said...

With these people in power, bandits also can be heros.

Anonymous said...

Did he say that? Too much regulation means that there will be regulatory risk and higher expected returns, so can we expect a lower rate of return for the power generating companies if we remove all regulations? Hmm, it should be the case, right?

redbean said...

sounds logical.

Anonymous said...

So no regulation = losses?
:?

Where's this guy from? Pluto? Hairdo really hairdo.... buay tahan.

Anonymous said...

TO CONVINCE SINGAPOREANS, Iswaran will have to EXPLAIN HOW HONG KONG IS ABLE TO REDUCE ELECTRICITY TARIFF in contrast to the Hike of 21+% in Sg, AS HK IS NOT A OIL PRODUCING STATE.

He too will have to tell us why flexibilities in hedging and paring are not within the abilities of the Power Company, now that oil price is about US$70.


Consumer Rights Organizations and Human Rights Organizations should look into this particular issue and see if the Local Consumers have been exploited and fleeced.

patriot

Matilah_Singapura said...

One thing that brings me great comfort and peace, is that I know I'm right when I believe that every thing the government does ends up failing.

The "bonus" entertainment occurs occasionally when the government announces that it is going to regulate itself — by bullshitting people that "private" corporations which are state-owned can be regulated by an "independent body" (WTF?!?) pulled out of some bureaucrat's crusty arsehole.

Fuck. Fuh-nee lah! Laugh!

redbean said...

i don't know whether to laugh or to cry. the best i can say is that this is called creative reasoning or maybe power reasoning.

and you can see that the reasoning was so well received in parliament that everyone was happy after that. no further question.

Matilah_Singapura said...

The best part is that you cannot even stand outside parliament... let alone stand there and shout "Liars Liars!"

Sekali the police come, next thing you know you're in a kangaroo court — which must have been built by aliens because it looks like a space ship!

Anonymous said...

Be very careful Matilah. We know you are on a beach somewhere and not here. Cannot simply say "kangaroo". You could be haul up to meet the Judge and she will throw your arse in jail or beat you on your backside.

Matilah_Singapura said...

> she will throw your arse in jail or beat you on your backside. <

Oh wow! Bondage AND Discipline. kinky!