Letter to PUB – Hyflux Restructuring

Date: March 26, 2019

Chief Executive
40 Scotts Road
Environment Building
Singapore 228231

Attention: Mr Ng Joo Hee

Dear Sirs,


SIAS represent the interest of the investors, particularly the retail investors of Hyflux, who are now in a predicament, the possibility of the company facing liquidation. The only hope for the some 50,000 Singapore citizens in this saga is the entry of the white knight, SMI, Salim-Medco, the only investor to come forward. SIAS fully appreciates that PUB has to safeguard Singapore’s water security.

However, recent actions by PUB, such as the service of default notice on TPL and its recent announcements have caused serious concerns to investors and stakeholders, quite a number of whom have raised their serious concerns with SIAS. In order to avoid speculations and address the investors’ uncertainties and fears, it would be useful for PUB to address their questions which we append below:

  1. What is the role of PUB vis-à-vis Hyflux?
  2. How does it manage the Private –Public contracts?
  3. In what instances can PUB step in?
  4. How is the purchase price of TSDP of $0 determined? Shouldn’t the purchase price be the equivalent replacement cost of building or an equivalent plant?
  5. In your media release dated 21 March 2019, you stated that “the purchase price for TSDP will be determined by an independent valuar in accordance with the WPA”. Is there an independent valuation for TSDP?
  6. a) Why has PUB chosen to issue the notice of default, expiring on 5th April 2019; the date of the voting on the Scheme by creditors, given that PUB was already aware of the situation of TPL and Hyflux since 2017?

    b) Is this because that TPL was not included as part of court sanctioned moratorium?

  7. NEA could have also issued a notice of default for the construction of Tuas One. Taking NEA as an example, why couldn’t PUB also wait till after the Hyflux scheme meeting to issue the default notice? Wouldn’t that be helpful to the plight of the 50,000 Singapore citizens who have ploughed their money into Hyflux to avoid further uncertainty?
  8. Couldn’t PUB have waited till the outcome of the restructuring, on how the default could be remedied. Could PUB have waited a little longer?
  9. Is PUB agreeable to give more time to TPL to remedy defaults arising under the WPA between PUB and TPL. If not why? Wouldn’t giving more time help all parties to focus on the restructuring process?
  10. In exercising the default notice and acquiring TSDP, is PUB acquiring just the right to operate or the asset?
  11. What is PUB’s plan should the scheme fail? Will PUB also acquire the power plant as it is integrated with the desalination plant? What is the plan for the power plant? Will PUB acquire the asset or the right to operate?
  12. What is PUB’s plan moving forward? Will PUB sell the TSDP or TPL in future?
  13. The disclosure that WPA contract is cash flow negative came from PUB. Is this due to the contract signed by Hyflux with PUB that they could not disclose this information?
  14. Did the petition by Hyflux investors to the government prompt PUB to take action?
  15. It was reported by BT on Friday, 22 March 2019 “HYFLUX’s reluctant white knight should not use PUB as an excuse to back out of its investment agreement with the water company, the national water agency said on Thursday.” Did PUB make this statement? If so why? Does PUB have any intimation from SMI to that effect?
  16. PUB buys water from TPL at $0.45/m³ and charges consumers from $2.74/m³, given that this was a P-P-P contract, couldn’t the price have been revised knowing that the company was incurring losses year after year?


Yours sincerely
David Gerald