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[h=2]How would Dr Goh feel about Jurong Port’s latest move?[/h]
April 2nd, 2014 |
Author: Editorial
Dr Goh Keng Swee
Ms Andeline Wong has written a letter to ST Forum, which was published on Monday (‘No room for negotiation, 31 Mar).
In the letter, she agrees with former NTUC Income CEO Tan Kin Lian, who suggested keeping rents stable to support our small and medium enterprises (SMEs). Mr Tan had earlier written about this in a letter to ST Forum (‘Keep rental rates stable’, 14 Mar).
Ms Wong revealed that she is an SME owner, running a logistics business with a warehouse in Jalan Buroh Warehouse Complex, whose landlord is Jurong Port.
Jurong Port originated from the vision of the late Dr Goh Keng Swee, the “Father of Jurong”. Dr Goh’s vision was for Jurong to be a prime industrial town for generations of Singaporeans. The vast land immediately available there made it an ideal site – it was not far away from Keppel Harbour, it was relatively flat and it had a low population density. Moreover, Jurong’s coastline provided a natural deep harbour which allowed Jurong Port to be set up in addition to Keppel Harbour in the south of Singapore [Link].
In line with Dr Goh’s vision, Jurong Port was set up by the Economic Development Board in 1963 to support Singapore’s first and biggest industrial estate, Jurong Industrial Estate. In 1965, the port officially commenced operations. In 1968, Jurong Town Corporation (JTC) was set up to drive the industrial estate development in Singapore and Jurong Port became a business division under JTC. In January 2001, Jurong Port was corporatized and became a fully owned subsidiary of JTC Corporation.
Ms Wong said:
Ms Wong added:
She said, “The landlord told me as it was privatised now, it has its own guidelines.”
Today, Liew Chin Beng, SVP Corporate Affairs of Jurong Port, replied to Ms Wong via ST Forum (‘Warehouse rental: Landlord replies’, 2 Apr).
Mr Liew said:
As for future rental movements, we are unable to predict them and would therefore not make any prognosis of rental increments.
Ms Wong’s company had negotiated and renewed a one-year lease from February at a rental that was 3.13 per cent above the previous rate.
This is consistent with current rentals charged to other tenants in the warehouse. Her company has, nevertheless, served notice of termination of the lease last month.
We are still open to further negotiations with Ms Wong’s company for a mutually acceptable agreement, and we will contact it again soon.
In other words, now that Jurong Port has been corporatized, it goes for money, money, money. Profits come first, never mind that Jurong Port was developed using a generation of Singaporeans’ hard earned money.
As is the case for all corporatized public entities in Singapore, it will eventually be transferred to Temasek Holdings and then be prepared for a public listing later. This will, no doubt, generate handsome returns for Temasek and bolster its balance sheet.
In Singapore, everything is about money these days.
If Dr Goh was alive today, what would he think about the latest move by Jurong Port to maximise profits – far away from his original vision 50 years ago?
Ms Andeline Wong has written a letter to ST Forum, which was published on Monday (‘No room for negotiation, 31 Mar).
In the letter, she agrees with former NTUC Income CEO Tan Kin Lian, who suggested keeping rents stable to support our small and medium enterprises (SMEs). Mr Tan had earlier written about this in a letter to ST Forum (‘Keep rental rates stable’, 14 Mar).
Ms Wong revealed that she is an SME owner, running a logistics business with a warehouse in Jalan Buroh Warehouse Complex, whose landlord is Jurong Port.
Jurong Port originated from the vision of the late Dr Goh Keng Swee, the “Father of Jurong”. Dr Goh’s vision was for Jurong to be a prime industrial town for generations of Singaporeans. The vast land immediately available there made it an ideal site – it was not far away from Keppel Harbour, it was relatively flat and it had a low population density. Moreover, Jurong’s coastline provided a natural deep harbour which allowed Jurong Port to be set up in addition to Keppel Harbour in the south of Singapore [Link].
In line with Dr Goh’s vision, Jurong Port was set up by the Economic Development Board in 1963 to support Singapore’s first and biggest industrial estate, Jurong Industrial Estate. In 1965, the port officially commenced operations. In 1968, Jurong Town Corporation (JTC) was set up to drive the industrial estate development in Singapore and Jurong Port became a business division under JTC. In January 2001, Jurong Port was corporatized and became a fully owned subsidiary of JTC Corporation.
Ms Wong said:
We first started renting the warehouse in 2008 and after much hard work, we managed to bring in some business with good customers supporting us.
However, when the lease was due for renewal after two years, the rental shot up by almost 65 per cent.
Jurong Port told Ms Wong they were just “following the market trend” – cold comfort to her.However, when the lease was due for renewal after two years, the rental shot up by almost 65 per cent.
Ms Wong added:
We still renewed the lease as we had invested in equipment for the business. But the rent continues to rise every term by at least 30 per cent.
The latest occasion was last month – which saw another 35 per cent increase – when we were told by the landlord (Jurong Port) that one-year leases were the new policy. We were also told that rent would probably increase by another 30 per cent to 40 per cent next year.
Ms Wong is most disappointed that there was no room for negotiation with Jurong Port. She lamented that the landlord would simply not consider helping SMEs or at least supporting the Government’s move to help SMEs in Singapore.The latest occasion was last month – which saw another 35 per cent increase – when we were told by the landlord (Jurong Port) that one-year leases were the new policy. We were also told that rent would probably increase by another 30 per cent to 40 per cent next year.
She said, “The landlord told me as it was privatised now, it has its own guidelines.”
Today, Liew Chin Beng, SVP Corporate Affairs of Jurong Port, replied to Ms Wong via ST Forum (‘Warehouse rental: Landlord replies’, 2 Apr).
Mr Liew said:
All 15,500 sq m of the Jalan Buroh Warehouse is leased to small and medium-sized enterprises (SMEs). Reflecting SMEs’ strong demand for good and accessible warehouses, the occupancy has remained at 100 per cent.
To ensure equitable allocation based on demand and supply, SMEs are invited to bid for spaces when these are available for renewal, giving first right of refusal to existing tenants.
As for future rental movements, we are unable to predict them and would therefore not make any prognosis of rental increments.
Ms Wong’s company had negotiated and renewed a one-year lease from February at a rental that was 3.13 per cent above the previous rate.
This is consistent with current rentals charged to other tenants in the warehouse. Her company has, nevertheless, served notice of termination of the lease last month.
We are still open to further negotiations with Ms Wong’s company for a mutually acceptable agreement, and we will contact it again soon.
In other words, now that Jurong Port has been corporatized, it goes for money, money, money. Profits come first, never mind that Jurong Port was developed using a generation of Singaporeans’ hard earned money.
As is the case for all corporatized public entities in Singapore, it will eventually be transferred to Temasek Holdings and then be prepared for a public listing later. This will, no doubt, generate handsome returns for Temasek and bolster its balance sheet.
In Singapore, everything is about money these days.
If Dr Goh was alive today, what would he think about the latest move by Jurong Port to maximise profits – far away from his original vision 50 years ago?
