Let’s just talk briefly about one deal between Temasek and the government. The sale of Changi Airport in 2009 for a reported S$3.3 billion. Temasek (under Ho Ching) paid this price with a cash injection from the government (under PM Lee). Yet Changi Airport was reported as having total assets of S$7.2 billion. Not to mention the fact that it sits on 1,300 hectares of valuable land. It’s interesting to look at how much that land itself might have been worth. Also in 2009, a 1.4 hectare land parcel at Jurong West was sold for S$38.5 million, that is about $2.75 million per hectare, which pro-rated for the size of Changi Airport puts the land value alone at more than ten times what Temasek paid for the land plus airport. Or to put it another way, you could demolish Changi Airport and bulldoze the runways, and just the land itself would still be worth more than Temasek paid for the worlds greatest airport. This is the sort of sweetheart deal that allows Temasek to claim unrealistic and inflated returns.
Posted on: Tue, 24 Jun 2014 22:55:11 +0000
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