Irked Singapore may scale down industrial park near Shanghai

The former Singapore premier, who has expressed unhappiness over a rival development to the Suzhou Industrial Park (SIP), told Cable News Network that Singapore could just let the Chinese complete the project.

His remarks on the Suzhou problem were front-paged by Singapore dailies, underscoring the seriousness of the impasse over the SIP.

The reports said the SIP, a pet project of Lee, would have cost developers an estimated UD$20 billion to US$30 billionover 20 years. It was billed as the flagship cooperation project between the two countries.

The developers' vision was to create an efficient and ultramodern Singapore-style industrial township near Shanghai to host multinational firms setting up in China.

However, municipal authorities backed a rival project with similar features and courting the same investors, undercutting the SIP, which is majority-owned by a Singaporean state-linked consortium.

"I think the problem has to be sorted out and what we hope to do is complete one sector in the way we promised to do," Lee said, adding that this would serve as an example of what the whole park could have been "if we had completed it," Lee was quoted as saying.

Lee, who has close personal ties with Chinese leaders, said that after completing one sector, Singapore could tell the Chinese: "You do it, you compete with your own rather than we complete with them. We will help you do it as best as you can but you will do it."

"Obviously we are not happy because we are not getting the kind of attention which we were assured that we would get, special attention. Indeed, what we are getting now is competition.

"Having learnt how we are doing it, they can always duplicate it and offer it at a lower rate of land," Lee said.

Some 155 companies have committed to set up operations in the SIP, and 90 foreign investors are already operating in the park, the Singapore Business Times said.

The SIP is facing competition from the Suzhou New District Park, being developed by the Suzhou municipal government.

The newspaper said Lee was referring to the first eight square kilometers of the SIP.

The park was envisioned to span across 70 square kilometers (28 square miles) when fully built.

The Business Times quoted SIP sources as saying that the proposal for Singapore to complete just the initial phase was still under discussion.

Chinese national leaders had assured Singapore of Beijing's commitment to the project after Lee openly complained of competition from the Suzhou government.