Li and Lee

Why is Hong Kong tycoon Li-Ka-shing pouring so much resources into Singapore?

Today, his foundation and listed companies pumped a record S$100 million into the Lee Kuan Yew School of Public Policy at the National University of Singapore. The school is, of course, named after his good friend -- Minister Mentor Lee Kuan Yew, who was also Singapore's longest-serving Prime Minister from 1959 to 1990.

They also have great things to say:

“Globalization posts new complexities for governments worldwide. Policymakers everywhere need to develop policies that embrace the importance of diversity and integrate it within a structure of unity. This is certainly an important task and a formidable challenge. By bringing together policymakers from different countries to think about these issues together, I hope the scholarships might sow seeds of perpetual prosperity and peace.”
Li Ka-shing

"Dr Li Ka-shing and I are old friends. By his generous donation of S$100 million to the LKYSPP, I am happy that his name will be on one of the three blocks of buildings on the campus of the school that is named after me."
Lee Kuan Yew

Apart from the generous donation, the Hong Kong tycoon has given S$20 million to another university in Singapore, and is part of the consortium that is spearheading the development of the New Downtown in Singapore.

Of course, Li's port business has forged close ties with PSA International, which is part of Singapore government investment arm Temasek Holdings.

Last year, PSA paid US$4.4 billion for a "20% equity and loan interest in Hutchison Whampoa Limited’s portfolio of ports." The deal, which was PSA's biggest investment, came shortly after it failed in the bidding war for UK's P&O Ports, which was snapped up by Dubai's DP World for an even more staggering US$6.8 billion.

Will we see more partnerships between Singapore and Li's empire?

Hiccup in Singapore-Brunei Ties? Part 2

Singapore port operator PSA International's premature termination of its management contract of the Muara Container Terminal in Brunei seems to have created some rumblings in the neighbouring country.

Singapore's Today newspaper, which cited The Borneo Bulletin and other sources, today highlighted unhappiness among some Brunei port workers. This came shortly after PSA's decision to return Muara to the local government on Jan 24. The termination of the contract itself was rather unusual as the two countries enjoy very close political and economic ties as mentioned earlier.

Something unusual is definitely brewing in the sultanate.

Brunei port workers worried
PSA's premature exit shocks transport sector; workers fear job loss
Monday • February 5, 2007

EVEN as PSA International makes its foray into the emerging market of Vietnam, its premature exit from Brunei — where it recently cut short a 25-year deal after just six years — has sparked worries among port workers there.

Rumbles of unhappiness and confusion were heard shortly after PSA said it would hand back the running of the container port — Muara Container Terminal — to the Brunei government this April.

The Borneo Bulletin, which reportedly received calls from the terminal's workers who were worried about job losses, said the surprise move "stumped the transport sector".

"The news came as a shock to me. I didn't hear it from the company but saw it reported in a newspaper," said a worker speaking on the condition of anonymity.

There was little insight into why the relationship was cut short — at least from the Brunei side.

PSA had maintained that it has transferred operational knowledge and expertise to the Brunei Ports Department over the past six years. It has also trained port managers and workers to operate the terminal efficiently.

On Saturday, The Borneo Bulletin again lambasted the Brunei government for lack of transparency in the whole affair, saying it owes the 52 locals and 40 foreign staff an explanation.

"Can Brunei do it alone in the face of stiff worldwide competition? Is the Brunei Port Authority better than PSA, which is a world class operator?" the periodical asked.

The deal was estimated to be worth $100 million by industry sources and was the first major privatisation project by the Brunei government.

But it may not be the end game for PSA, which operates 20 ports in 11 countries, in the sultanate.

In its earlier statement, it said it looks forward to participating in future terminal operating opportunities that may be available once the longer-term vision of the Muara Port is firmed up.

When contacted by Today, a spokesperson from the Brunei Economic Development Board (BEDB) said it was in the final stages of discussions on this second terminal. Further details will be announced in the second quarter of this year.

"Whatever the structure of Pulau Muara Besar, we will engage companies in an open tender. What happens with Muara Container Terminal and the PSA will not have any impact on BEDB's decision to develop Pulau Muara Besar, which will be focused on export-based activities in various key areas. These may include the export of halal products as well as oil and gas," he said.

Hiccup in Singapore-Brunei Ties?

Could Singapore be having problems with Brunei -- one of its best friends -- in the midst of its stand-offs with three other bigger neighbours?

In an odd development on Wednesday, Singapore's state-controlled port operator PSA International said it was returning the operations of the Muara Container Terminal in Brunei to the local government prematurely. PSA had only managed the greenfield port in Brunei for six years although the contract was supposed to run for 25 years until 2025. The ostensible reason by PSA was the achievement of its goals and Brunei's on-going review of Muara's longer-term capacity needs.

But it sounds more like a clash of the vision for the port industry in Brunei although PSA had worded the statement nicely. The possible clash could be partly explained by a report that said Brunei's Economic Development Board had identified a nearby island called Pulau Muara Besar in 2002 for another new terminal.

Whatever the real reason for the parting of ways, the development has great political significance as the two countries have very strong and deep-rooted ties.

Brunei is the only country in the world that has its currency pegged to the Singapore dollar. Their currencies are interchangeable. Even the Malaysian currency is no longer interchangeable with the mighty Singapore dollar since the two countries separated in 1965.

In fact, Singapore and Brunei had agreed to join the formation of Malaysia in the 1960s. But Brunei dropped the idea following an internal revolt, while Lee Kuan Yew's Singapore was booted out of the federation by the Malaysian administration of Tunku Abdul Rahman after a brief merger of two years.

Since then, the two small former British colonies have forged very close political and economic ties. They enjoy deep-rooted military and bilateral ties although they are often downplayed. The Sultan of Brunei is known to have many assets in Singapore but the fact is never played up in Singapore.

With the deep ties, one would have expected political considerations to override any differences in the state port deal. In other words, one would have imagined that PSA would continue performing national service regardless of any commercial differences due to the paramount political considerations.

Despite the botched port deal, Singapore and Brunei are expected to continue their warm and friendly ties.

The same cannot be said about Singapore's current soured ties with Thailand, Malaysia and Indonesia.