Suzhou Park problems can be overcome
Straits Times. Jan 15, 1998
questions Lee Jr on Suzhou Park investment
SINGAPORE is confident that problems over the Suzhou industrial township can be overcome and the project restored to a strong and even footing, Deputy Prime Minister Lee Hsien Loong said yesterday.
He added that the joint venture company running the project, called the China Singapore Suzhou Industrial Park Development Company, or CSSD, believed it could become profitable in the medium term, "that is, within five to six years". He made this statement in reply to Non-Constituency MP J.B. Jeyaretnam, who wanted to know how much Singapore funds had been invested in the project.
The industrial park being developed in Jiangsu province hit the news last month when Senior Minister Lee Kuan Yew expressed unhappiness about a tug-of-war for investments between the SIP and a rival industrial park, called the Suzhou New District (SND), which was being developed and promoted by the Suzhou authorities.
Disclosing the extent of Singapore and foreign investments in the venture for the first time, Brigadier-General (NS) Lee said that 10 of the 24 companies in the Singapore consortium were government-linked companies and statutory boards, and their share was US$65.5 million (S$115 million). Another 10 partners in the consortium, called the Singapore Suzhou Township Development Pte Ltd (SSTD), were local companies, who put in another US$65.5 million. The remaining four were multinationals, with US$24.22 million, bringing the total to US$155.22 million.
The Singapore consortium owns 65 per cent of CSSD, while Chinese companies own the remaining 35 per cent.
Four government-linked companies also have stakes in another joint venture company, Xinsu Industrial Development, set up to develop and operate ready-built factories in the park.
These are Temasek Holdings (US$4.14 million), JTC International (US$16.54 million), Keppel Land (US$10.33 million) and Sembawang Industrial (US$10.33 million).
Three have additional stakes in Gasin (Suzhou) Property Development Co Ltd, a company set up to develop residential property in the SIP: Temasek Holdings (US$4.23 million), JTC International (US$4.23 million) and Keppel Land (US$5.29 million). This brings total investments by statutory boards and government-linked companies to US$120.59 million.
BG Lee told the House that as investors included listed companies and MNCs, the project must be transparent and tenable, and losses made public for scrutiny by the international business community.
Investors, he said, were concerned now that the "serious and fundamental conflict" between the two industrial parks in Suzhou had become public.
Recalling some of the problems, he recounted his "astonishment" at how Suzhou vice-mayor Wang Jinhua had told a group of German businessmen in Hamburg last November that he disagreed that the SIP had the backing of Chinese President Jiang Zemin and advised them to go to China directly without Singapore.
Two days later, in another forum in Cologne, he told investors that all of Jiangsu province's resources would go to the new district and not the SIP.
Noting that the conflict was now out in the open, he said: "To restore confidence, we must resolve the problem openly. Investors must be convinced that the problem has indeed been resolved and not swept under the carpet.
"If we gloss over the issues, SIP will become another run-of-the-mill park, creating no special value for its shareholders, its tenants, or China."
"We are confident that by being open, and tackling the issue directly and completely, we will solve the problems and restore the project to a strong and even footing."