Investor monitoring questions the PUB on the purchase price of the Tuaspring desalination plant

SINGAPORE: The Singapore Securities Investors Association (SIAS) asked PUB to clarify how a zero dollar purchase price for the Tuaspring Desalination Plant (TSDP) had been determined .

In a letter to PUB General Director Ng Joo Hee on Tuesday, March 26, SIAS President David Gerald asked a series of questions to the National Water Agency regarding his announcement of the factory recovery.

The PUB announced earlier this month that it would terminate a water purchase contract with Tuaspring Pte Ltd (TPL), a subsidiary of Hyflux, and start taking over the desalination plant if the company could not rectify not to his faults before April 5th.

READ: PUB ready to take control of zero dollar desalination plant if Hyflux's Tuaspring system does not fix default issues

The agency said that she was willing to give up the compensation to which she was entitled under the agreement and to buy the desalination plant to zero dollar.

In his letter, Mr. Gerald asked how was determined the purchase price of zero dollars and whether the purchase price should rather be "the equivalent replacement cost of a building or a building". an equivalent factory ".

"In your press release of March 21, 2019, you stated that" the TSDP purchase price will be determined by an independent expert in accordance with the WPA. "Is there an independent assessment for [the] TSDP? Asked Mr. Gerald.

Her letter also questioned the timing of the PUB's action and the reason why the agency, already knowing that she knew the situation of Tuaspring and Hyflux since 2017, had chosen the 39, issue the notice of default so that it expires on April 5th.

This is the very day that Hyflux's restructuring plan will be put to a vote.

"PUB's recent actions, such as TPL's default notification and recent announcements, have raised serious concerns among investors and stakeholders, many of whom have expressed concerns about SIAS," said Gerald .

"The NEA could also have issued a default notice for the construction of Tuas One Take NEA as an example Why could not PUB wait after the Hyflux meeting to issue the default notification?" Mr. Gerald added.

"Would not that be useful for the fate of 50,000 Singapore citizens who have invested their money in Hyflux to avoid uncertainty?"

"Could not PUB wait for the result of the restructuring to find out how to fix the problem, could PUB wait a little longer?"

Diving in losses, the water treatment company Hyflux has been trying for several months to restructure.

According to an affidavit dated March 1, Hyflux recorded a net loss of $ 1.1 billion for the nine months ended September 30, 2018, after impairment of $ 916 million of the book value of Tuaspring and other projects.

The announcement of PUB has left some private investors wanting to appeal the agency's decision, with a protest against Hyflux's restructuring plan and recent developments planned for Saturday.

READ: Hyflux investor plans to demonstrate Saturday at Hong Lim Park

The "ruthless" announcement had been "hard to swallow" for retail investors as their investments had been used by Hyflux to finance the construction of the integrated plant, an investor told Channel NewsAsia.

SIAS also asked Hyflux on Monday whether a bailout agreement involving the Indonesian SM Investments consortium (SMI) was still on the table, in light of recent events such as the PUB failure notice.