Zero bids for Singapore hotel site is first in seven years

Zero bids for Singapore hotel site is first in seven years

Consultants cite weak economic sentiment, large site for 500 rooms
By ARTHUR SIM

A HOTEL site at Race Course Road has failed to receive a single bid. According to the Urban Redevelopment Authority, not since February 2001 has there been a launch of a development site through the Government Land Sales Programme (GLS) that did not take off.
The 0.9 ha site at the junction of Race Course Road and Bukit Timah Road has a maximum permissible gross floor area (GFA) of 338,417 sq ft, and is next to Little India MRT station. It was launched for sale by public tender through the confirmed list under the GLS programme for the first half of 2008.

While sites on the confirmed list are generally thought to have the potential to be developed faster than those on the reserve list, developers obviously did not think so.

Knight Frank director (research and consultancy) Nicholas Mak said that the poor showing could be ‘a signal to relook the quantum of land for hotel use in the confirmed list of the next GLS programme’.

In April, the government released another site on the confirmed list for sale at Balestier Road and Ah Hood Road.

In addition, there are also eight hotel sites on the reserve list currently.

Mr Mak said there could be three reasons for the Race Course Road site not receiving any bids: location; weak economic sentiment; and oversupply. He also said it was more likely to be a combination of the latter two reasons.

 
 
Jones Lang LaSalle Hotels executive vice-president and head of corporate advisory (Asia) Chee Hok Yean believes that the sheer size of the site could have put potential bidders off.

Earlier estimates had put the range of bids at between $400 - $700 per square foot per plot ratio (psf ppr).

Estimating that the site could yield 500 rooms for a three-star hotel at a possible bid price of $500 psf ppr, Ms Chee believes that land price of $170 million would have been too hefty for a potential hotel developer of this category to bear. ‘Construction costs have also gone up,’ she added.

While Ms Chee also added that investor sentiment is generally weak at the moment, she said that average room rates and occupancy levels in Singapore have remained high, suggesting that there is no issue with an oversupply of hotel rooms here yet.

 
Source : Business Times - 22 May 2008

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New GM for Singapore Marina Bay Financial Centre

New GM for Singapore Marina Bay Financial Centre

Colliers’ Singapore MD to be promoted to MD for North Asia

THE joint venture developers of Marina Bay Financial Centre (MBFC) - Cheung Kong Holdings, Hutchison Whampoa, Hongkong Land and Keppel Land - said yesterday they have appointed a new general manager for the prime project.
Wilson Kwong replaces outgoing general manager David Martin, who is moving to Hong Kong after running MBFC for four years.

Mr Kwong was previously senior asset manager, commercial property, for Hongkong Land - a role that included managing the company’s interests in key developments in Hong Kong.

From 1998 to 2006 he held various management positions in the Jardine Matheson Group.

‘MBFC is shaping up to redefine the Central Business District in Singapore by adding 3 million sq ft of office space, 649 new residential apartments and more than 120,000 sq ft of new shopping and dining pleasures,’ he said. ‘A project of this magnitude relies on the interaction of many parties, including MBFC’s strong team and I look forward to working with all the parties involved.’

Mr Kwong paid tribute to Mr Martin for leading a team that gave MBFC a strong start and guiding the project through its initial phases of land tendering, design and planning.

 
 
Separately, marketing agent Colliers International has said its Singapore managing director Dennis Yeo will be promoted to managing director for North Asia from June 1. In his new portfolio, Mr Yeo will oversee Colliers’ businesses in China and Taiwan, except Hong Kong and Macau.

He will work with local management teams on strategy and identifying new business opportunities.

Mr Yeo will continue as head of the regional industrial group, which helps with clients with cross-border transactions.

Source : Business Times - 22 May 2008

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Singapore SIA launches series of green building initiatives

Singapore SIA launches series of green building initiatives

By EMILYN YAP

SUPPORTING the local green movement, the Singapore Institute of Architects (SIA) will be taking on a series of initiatives to promote green architecture in Singapore.
SIA will also bid to host the 2014 International Union of Architects World Congress.

 
SIA’s latest efforts came to light at its annual dinner yesterday, as president of the institute, Tai Lee Siang, introduced three green awards to recognise excellence in sustainable architectural design.

The first is the SIA-NParks Skyrise Greenery Awards, jointly launched by SIA and the National Parks Board to encourage creative greenery design in high-rise developments.

Partnering Philips and Hunter Douglas separately, SIA will also launch the SIA-Philips Green Innovation Awards and the Eco Friend Awards.

The former recognises innovative sustainable design, while the latter promotes the creative use of sustainable products.

Awards aside, the SIA will also bid to host the 2014 International Union of Architects World Congress, one of the world’s largest conferences on architecture and urban design, under the theme ‘Green Cities’.

Through the bid, SIA hopes to showcase Singapore not just as a model green city, but also as a catalyst for the creation of a green region around South-east Asia.

 
As a sign of the government’s support, Minister for National Development Mah Bow Tan will lead the SIA delegation to Turin, Italy, to present the bid in July.

Yesterday’s spotlight was also on the 9th SIA Architectural Design Awards.

With talk of recession and belt-tightening making its rounds, it was a uniquely apt time for the awards to introduce a new prize - ‘Best Project Below S$1 Million Construction Cost’.

The winning design at 19 Jalan Elok by Chang Architects was a stunning display of urbanised nature, impressing the judges with the ‘magical quality of its spaces’.

Also making its debut was the ‘Building of the Year’ award, which went to RSP Architects Planners & Engineers for its work on the LaSalle College of the Arts.

According to the judges, the college is ‘a work with sensitivity to youth, to climate, to context, to construction’.

 
Source : Business Times - 22 May 2008

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Singapore luxury homes ninth most expensive globally

Singapore luxury homes ninth most expensive globally

Market supported by jet-setting high net-worth individuals: report
By ARTHUR SIM

LUXURY homes in Singapore are the second most expensive in Asia and the ninth most expensive in the world.
 
High living: At US$2,423 per sq ft, S’pore luxury home prices are topped only by HK, where they cost US$4,507 psf. Even Tokyo is cheaper at US$2,334 psf 
According to a report by Citi and Knight Frank, luxury home prices here are now US$2,423 per sq ft.

The only place in Asia where they are more expensive is Hong Kong, where they cost US$4,507 psf. Even Tokyo is cheaper than Singapore, coming in third most expensive at US$2,334.

Worldwide, London is the most expensive, followed by Monaco and St Jean Cap Ferrat (France) at US$6,191, US$5,888 and US$5,853 psf respectively.

The global luxury home market is supported by jet-setting high net-worth individuals who think nothing of owning homes on every continent.

As an example, the report describes a Brazilian/Russian family that owns apartments in New York, Geneva, Ibiza and, until recently, Singapore.

The family reportedly spends equal periods at each property, with business and social ties meaning they find it possible to change location for long or short periods with ease.

‘In many ways, none of their properties is regarded as either a primary or secondary residence,’ the report says. ‘In fact, they feel equally at home in all of them.’

The report ranks high net-worth individuals in four categories - those with US$1 million to US$10 million; US$10 million to US$100 million; US$100 million to US$1 billion; and more than US$1 billion.

 
‘Extraordinary wealth creation has continued across the global oil and commodity sectors.’
 
- Report by Citi and Knight Frank
 
 
 
It found that 15.7 per cent of entry-level high net-worth individuals own four or more homes. In the second, third and fourth (the richest) categories, the respective percentages increased to 23.3, 31.5 and 60 per cent.

Importantly, the report found that in both developed and emerging economies, uncertain economic and political conditions did not affect the growth in numbers of high net-worth individuals, with the growth of their wealth, ’similarly undimmed throughout 2007′.

Citing data from Scorpio Partnership, the report says the most significant growth in 2007 was in the US, where the number grew almost 120,000 to 3.1 million. China had the second-largest increase, with the figure rising almost 46,000 to 373,000 - almost as many as Germany.

‘Despite the credit crunch, extraordinary wealth creation has continued across the global oil and commodity sectors,’ the report says.

An example of the strength of the global luxury home market is that in London the number of £pounds;10 million-plus sales in Chelsea, Knightsbridge and Belgravia rose 190 per cent in the six months to January 2008 from the same period a year earlier.

In the US, where prices fell 4.5 per cent over the past year and 4.2 per cent in New York generally, prices for prime Manhattan properties rose 25 per cent.

Knight Frank’s head of residential research Liam Bailey said: ‘Prime locations have held their own. London, New York, Shanghai and others are proving that almost any residential market tied to the global economy maintains confidence among purchasers.’
 

 
Source : Business Times - 22 May 2008

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Microsoft cashback plan for Live.com - NEW YORK

Microsoft cashback plan for Live.com - NEW YORK
(NEW YORK) Microsoft Corp will give cash back to people who shop online with its Live.com search engine, building up the business after abandoning a US$47.5 billion bid for Internet rival Yahoo! Inc this month.
Users who buy products through Windows Live accounts can get rebates of 10 per cent or more, according to a Microsoft website. The ‘cashback’ service directs subscribers to websites that sell products from companies such as Adidas AG and Canon Inc.

The move may attract more customers and online advertisers to Microsoft’s sites, helping the software maker compete with Google Inc, the most popular US search engine. Microsoft had sought to unite its third-ranked engine with No 2 Yahoo, and walked away after the company demanded a higher price.

Microsoft is working to consolidate brands, attract advertisers and expand partnerships, online business president Kevin Johnson said in a letter to employees this week. The business lost US$228 million last quarter, the company’s sole unprofitable division in the period.

Mr Johnson said the Redmond, Washington- based company was to discuss its strategy in more detail yesterday at its annual advertising conference. Microsoft spokesman Frank Shaw didn’t immediately return a phone call seeking comment. — Bloomberg

Source : Business Times - 22 May 2008

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Singapore FairPrice the best anti-inflation weapon govt made: Ngiam

Singapore FairPrice the best anti-inflation weapon govt made: Ngiam

And it was a threat of profiteering from rice that led to the supermarket’s birth
By LEE U-WEN

EVEN as the price of rice soars worldwide, not many may know that it was concerns of profiteering from that very staple food some 30 years ago that led to the birth of the NTUC FairPrice supermarket.
 
Mr Ngiam: His priority now is to spend as much time with his wife as possible 
Recalling an incident around that time, former top civil servant Ngiam Tong Dow said he was ‘hopping mad’ when rice merchants met the government to say that there was just a month’s supply of rice available in the market.

‘How could they come and tell us that there’s only one month’s stock? They wanted to raise prices. So (NTUC founder) Devan Nair was called in to help us fight this cartel, and that’s how FairPrice was started,’ he said at yesterday’s Pioneer Series dialogue event at the Arts House.

‘NTUC FairPrice is the best anti-inflation weapon that the government has made, better than any monetary policy, and that came about because the rice merchants wanted to take the whole of Singapore for a ride,’ he said.

While admitting that he was not a fan of state intervention, Mr Ngiam said that it was ‘necessary’ in that episode when the private sector was trying to take advantage of public funds.

Mr Ngiam was the fourth speaker in the bi-monthly dialogue, organised by the EDB Society and The Straits Times, to hear first-hand from the country’s pioneer figures.

The first three speakers were Minister Mentor Lee Kuan Yew, Temasek Holdings chairman S Dhanabalan and Singapore Exchange chairman J Y Pillay.

During his 40-year career in the elite Singapore Administrative Service, Mr Ngiam became the country’s youngest-ever permanent secretary at the age of 35 in 1972. He served in various heavyweight ministries, including finance, trade and industry, communications, as well as the Prime Minister’s Office.

Mr Ngiam spoke of how inflation rose above 8 per cent in the early 1980s, leading him to chair a committee to combat profiteering and inflation.

One of his first tasks was to get the Department of Statistics to go through the entire consumer price basket, item by item, with the intent of finding out what was the increase for each.

In one of the meetings, the committee discovered that the price of onions had shot up exponentially. The problem, they found out, was that there was just one importer of that vegetable. FairPrice was then asked to look for alternative sources, and soon after, onion prices started to fall.

Throughout the lively 90-minute dialogue, Mr Ngiam weighed in on a variety of topics as he fielded over 20 questions.

On how talent should be effectively identified and brought into the Administrative Service, Mr Ngiam suggested that, upon graduation, such officers should spend the first few years of their career ‘on the ground’ at statutory boards, rather than be thrust straight to the parent ministry.

‘Unless you know what’s on the ground, how are you ever going to formulate policies? Most of (the younger ministers today) come from families which are relatively well-to-do, upper middle class. So you really do not know the effect of a 10-cent bus fare increase on a family.

‘But if you’re from a poor family like my generation, if the bus fare goes up by 10 cents, multiplied by three or four times, 50 cents a day for the whole family. So I don’t know how are (the younger ministers) going to have this sort of empathy for the people,’ said Mr Ngiam.

Even as he said that he does not have any regrets in his storied career, Mr Ngiam said that it was ‘a pity’ when he read in 2005 that homegrown company Natsteel Asia had been acquired by India’s Tata Steel for $486.4 million.

‘It was a pity to lose such a huge body of knowledge. Why did we have to sell it? That’s my beef, (that we had to) sell away this wealth of knowledge.’

Mr Ngiam, however, was all smiles when asked what his priority was at this stage of his life, having stepped down as chairman of Temasek Holdings-owned Surbana Corporation just last month.

Without skipping a beat, he said to applause: ‘To spend as much time with my wife as possible.’

 
Source : Business Times - 22 May 2008

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More sophisticated investors preferred - Singapore

More sophisticated investors preferred - Singapore

By SIOW LI SEN

A GROUP of retirees at their daily gathering at the Botanic Gardens on Tuesday grumbled about the banks’ low deposit rates. Then one asked if any had managed to get DBS’s 5.75 per cent preference shares.
It seems that DBS’s latest preference share issue which the bank issued to boost its Tier 1 capital base, also known as Hybrid Tier 1, has been generating some buzz especially among savers fed up with low interest rates. Some complained that DBS should have offered a retail tranche out of the $1.5 billion preference shares which were snapped up by institutional investors within six hours when launched last week.

When savers compare preference shares to fixed deposits, it shows that the bank is right to offer them only to more sophisticated investors.

Not only are there different types of preference shares (so called because they rank above ordinary shares), preference shares as regulatory capital are even more complex. They are certainly not the same as the shorter-term relatively risk-free bank deposit. Otherwise DBS would not pay such high, 5.75 per cent interest for the fixed-rate, step-up, non-cumulative guaranteed preference shares .

The fixed-rate step-up refers to the 5.75 per cent interest rate paid for the first 10 years, after which it becomes floating rate notes paying 3.415 percentage points above the three-month Singapore dollar swap rate. DBS can call the securities after 10 years.

In non-cumulative guaranteed preference shares, the dividends - if they are not paid - do not accumulate; put another way, there is no make-up in subsequent years. Payment of dividend is subject to Monetary Authority of Singapore (MAS) rules such as they cannot be paid if the bank has insufficient distributable reserves due to accumulated losses or if, by paying, the bank breaches the regulatory capital ratio.

Preference shares rank below bank deposits, interbank borrowing and other senior debt when it comes to priority of payment. So if DBS gets into trouble, depositors get paid first, in addition to a government-backed deposit insurance up to a maximum of $20,000 before preference share holders.

DBS head of fixed income Clifford Lee explained it as follows: Hybrid Tier 1 financial instruments, which are neither straight equity nor straight bond, have traditionally not been made available to the mass retail market by other bank issuers internationally. The complexity of the HT1 instrument makes it such that issuers cannot responsibly offer them to mass retail investors since it’s difficult to ensure that they can fully understand the hybrid nature of the instrument and its accompanying risks.

For one, liquidity is low; and this risk will start to surface if Singapore dollar interest rates start to trend up and the prices of these HT1 trade off. Cash-strapped retail investors will then find it hard to unload their positions as quickly as they would expect to. Lot size for trading is set at $250,000.

Some think that DBS can ‘help’ by making a market for the preference shares. But as the issuer, the bank cannot buy back its own bonds, as it would become insider trading. What DBS can do is help facilitate price transparency.

DBS in fact was burned by retail experience in its May 2001 $1.1 billion, 6 per cent preference share issue which offered a retail tranche.

At the time, the retail tranche received overwhelming interest. But when the shares debuted on the stock market, they traded below par, with a large number of error trades as some mistook the par value for $1 instead of the correct $100.

Even after seven years, some retail investors still do not understand the instrument fully.

Retail investors who recently bought into DBS’s previous preference share issue at a premium complained that they did not realise that it could be called back at par, and not at the price they bought, hence reducing their yield from the original coupon levels, Mr Lee said.

Yesterday, the May 2001 preference shares traded at 107.44, lowering the yield to about 5.5 per cent.

OCBC Bank’s preference share issuance is interesting. In 2003, it offered to shareholders preference shares, redeemable after five years, in lieu of a special cash dividend.

But in 2005, when it made a $400 million preference share issue which qualified as Tier 1 capital, these were sold only to institutional investors.

Source : Business Times - 22 May 2008

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Hopes of Singapore property market rebound fading

Hopes of Singapore property market rebound fading

Uncertain economy, housing glut fears seen taking toll on developers

HOPES that a slowdown in Singapore’s property market is temporary are fading as an uncertain economic outlook and a looming housing glut threaten to plunge the sector into a prolonged downturn.
 
Housing hurdle: With home prices expected to fall 30 to 40 per cent over the next three years, Singapore’s developers could be badly hit 
Homebuilders such as CapitaLand, Keppel Land and GuocoLand have delayed launching new projects in the moribund market, taking a hit to first-quarter earnings as they hoped for a rebound later this year.

Prospects could be dented further in coming months if smaller developers face financing troubles and have to unload properties at massive discounts. Some have gorged themselves on expensive land acquisitions over the past two years.

With home prices expected to fall 30 to 40 per cent over the next three years, Singapore’s developers could be badly hit and analysts may slash their earnings estimates further.

‘This is the start of a multi-year price correction. Private residential property prices could easily fall by up to 30 per cent by 2010,’ said Barclays Capital economist Leong Wai Ho.

Credit Suisse in a report this month saw rents and property prices falling even more steeply by as much as 40 per cent, and downgraded its investment recommendation for the sector to ‘underweight’.

Warning signs have been flashing as first quarter 2008 sales volumes slumped to the lowest in five years and price growth slowed for two straight quarters, with concerns about a global economic slowdown and the US sub-prime mortgage crisis scaring off potential homebuyers.

Mr Leong said an impending oversupply will worsen the problem, with 66,000 new homes expected to be completed over the next four years, against forecast demand for 50,000 in the same period.

The three-month Singapore Interbank Offered Rate - a benchmark for mortgage loans - has fallen to near record lows below 1.3 per cent, but that may not be enough to revive buyers’ flagging confidence, economists say.

‘Negative real interest rates will be at best a cushion, rather than a boost to housing demand in the near term, although they could lift property demand if and when sentiment turns,’ said Citi analyst Kit Wei Zheng.

‘The worst is yet to come and price cuts are imminent,’ said ABN Amro analyst Fera Wirawan.

BNP Paribas has flagged high financial risks for small developers including Bukit Sembawang, Low Keng Huat and Lian Beng, which have almost all their debts due within a year. Even major builders such as Allgreen, Keppel Land and GuocoLand could face difficulties after steep drops in profit in the last quarter as they launch fewer projects, analysts say.

Slower sales and rising costs could raise developers’ gearing or debt-to-equity ratio to dangerous levels above 70 per cent, up from the industry average of about 62 per cent.

‘We identify three developers, namely Allgreen, GuocoLand and Keppel Land, that could face some pressures on cash flow,’ JPMorgan analyst Christopher Gee said in a report, noting that gearing levels could be pushed up to between 80 and 130 per cent.

The risk of price falls has been heightened by property speculators buying in recent years with little upfront cash, relying on a deferred payment scheme. The government scrapped the scheme last October in a bid to cool down the sector.

Analysts expect speculators will dispose of about 700 units on the cheap this year, and another 2,000 next year, as the properties near completion and instalments are due.

Some developers are still counting on home prices in the city state to rise for at least another year, as they see the market in the middle of an upswing even as the US housing market grapples with its worst downturn since the Great Depression.

‘This is a temporary hiccup. We just had a boom starting in 2006 and it’s usually a seven-year cycle,’ property tycoon Kwek Leng Beng, who heads Singapore’s No 2 developer City Developments, told Reuters. The property market will be supported by greater foreign investments as Singapore sees the completion of two casino projects and the influx of major events such as Formula One races and the Youth Olympics over the next few years, Mr Kwek argued.

But Barclays’ Mr Leong said his bearish scenario, which calls for a near one-third drop in property value, already takes into account any boost resulting from these economic developments. ‘It’s not the worst-case scenario. This is the most likely scenario based on the numbers,’ he said. — Reuters

Source : Business Times - 22 May 2008

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Oh, baby! There’s more icing on your bonus cake - Singapore

Oh, baby! There’s more icing on your bonus cake - Singapore

OCBC and Stanchart double interest rates as they woo parents
By SIOW LI SEN

(SINGAPORE) OCBC Bank and Standard Chartered Bank have intensified their fight to capture the baby bonus accounts to pretty amazing levels.
Both banks yesterday offered to double their interest rates for these accounts, to a lofty 2 per cent at least, even before the Aug 1 debut.

OCBC Bank said it will now pay 2.05 per cent interest on children development accounts (CDA) if parents sign up between Aug 1 and Sept 30, 2008.

This comprises a rate of one per cent per annum and a bonus rate of 1.05 per cent per annum.

Just last month, OCBC Bank had offered to pay a 0.8 per cent interest rate for a new CDA or one per cent if parents opt to save at least $50 a month. It also offered 1.5 per cent for a minimum fixed deposit of $6,000 of 12-month tenure.

Stanchart yesterday said all CDA accounts will be paid 2 per cent interest rate, up from 0.78 per cent. And for the first 100 parents who sign up, the bank is throwing in a free Nintendo Wii, worth about $600.

In terms of insurance cover, Stanchart is giving a $50 daily hospitalisation cash benefit due to hand, foot and mouth disease. And it will give parents $200 back for the first $1,000 spent on a free credit card which comes with the CDA.

 
 
The latest enticements from the two banks will be included in a package which will be sent to parents by the government this month to inform them that their existing CDA with DBS Bank will be transferred after July 31. All parents have to do is tick the new bank they want to manage their CDA.

In March, the government announced that OCBC and Stanchart had emerged successful bidders to manage the baby bonus scheme, estimated to be worth some $400 million, with effect from Aug 1.

They take over from DBS Bank, which offers a rate of 0.25 per cent on the CDA.

Started by the government in 2001 to encourage couples to have children, the baby bonus scheme has two components: an outright cash gift and matching contributions to the CDA.

For the third and fourth child, the total bonus from the government can go up to a maximum of $18,000.

In July 2007, there were 107,000 CDAs with $375 million in them, the government disclosed. On average, 35,000 to 45,000 babies are born each year.

Co-funding from the government into the CDA - which can only be used to pay for medical expenses, childcare and school fees - stops after six years.

 
Source : Business Times - 22 May 2008

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Singapore Govt looks at doing deals only with disaster-ready firms

Singapore Govt looks at doing deals only with disaster-ready firms

Task force to study proposal; most firms don’t have business continuity plans
By LEE U-WEN
(SINGAPORE) Even as the risk of terrorism, natural disasters and possibly another global pandemic grows, most businesses in Singapore are hardly prepared to deal with such crises.
The government is now looking at whether to make it mandatory for firms to be certified disaster-ready before they are allowed to provide services to the public sector. In other words, they could require a TR19 certificate.

TR19 or Technical Reference 19, a three-year-old government initiative set up by Spring Singapore, is a set of standards that can test the effectiveness of a company’s business continuity management (BCM) processes.

A multi-agency task force has now been set up to study how best to encourage more companies to come up with effective business continuity plans.

Speaking at the National Security Dialogue yesterday, Deputy Prime Minister and Coordinating Minister for National Security S Jayakumar said that the inter-agency work group would be led by the Trade and Industry Ministry, and will involve other ministries such as Finance and Home Affairs.

Chief among the items on its agenda will be to discuss the pros and cons of whether it should be made compulsory for firms supplying ‘essential or important services’ to the government to obtain TR19 or the equivalent standard first, he said.

 
 
Letting the private sector come up with good BCM schemes without any nudging does not seem to be producing results.

According to surveys conducted by the Singapore Business Federation (SBF), less than a third of local companies here have such a plan in place.

TR19, meanwhile, has seen a poor take-up rate so far, with only about 100 companies expressing interest to date. The uptake ‘has been slow due to cost concerns’, SBF chairman Stephen Lee told some 500 business leaders at the dialogue yesterday.

Understandably, the cost of going for TR19 is one of the main concerns for companies. Depending on the size of the company and the amount of risk involved, the cost to get assessed and certified could be from as little as $5,000 to as much as $500,000, said an SBF spokesman.

Another chief reason for the lukewarm response by businesses is a lack of awareness and sense of urgency, said Minister of State for Trade and Industry Lee Yi Shyan.

‘Companies themselves do not perceive the risk being real and there, so they tend to be slow in recognising the importance of BCM and incorporating this into their processes,’ Mr Lee said.

For companies concerned about the extra costs incurred - especially SMEs - Mr Lee said that the task force would also study how best to provide appropriate grants and subsidies.

‘Having a good BCM plan is an investment that companies must appreciate. A lot of our business models were built on the basis of it being peace time. Now, businesses must realise that this is a very volatile environment where things can go wrong quickly,’ he said.

One of the early adopters of TR19 is wafer fabrication manufacturer Systems on Silicon Manufacturing.

‘In going for TR19, we were able to consolidate the views of all the staff and identify the risks and how to tackle these emergencies, as well as to plan for the long term,’ said the company’s vice-president for corporate services, Lee On Nam said

‘As Murphy’s Law states: ‘If anything can go wrong, it will’,’ he added.

 
Source : Business Times - 22 May 2008

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