Saturday, December 26, 2015

Sports Hub Partnership

Someone knowledgeable about the subject explained to me the difference between a PPP (public private partnership)  and a normal procurement process.

Public private partnership
An example of the PPP is the Sprts Hub. It involves several parties, namely
a) The public sector
b) The financiers, who are mainly the banks
c) The builder
d) The facility manager
e) The operator, who is responsible to bring in the international events

All of these parties have an interest in the PPP and are expected to work in the best interest of the PPP (at least in theory).

The public sector, which will eventually own the property at the end of 25 years will make an annual payment based on the KPIs that have to be achieved by the PPP.

The disadvantage of the PPP is the difficulty in getting decisions made. As many parties are involved, it is difficult to manage the different priority of interest of these parties.

This is why the PPP involving the Sports Hub has to face many problems and challenges.

Normal Procurement
Under the normal procurement method, a company will be set up to be the equity owners of the project. They will negotiate for financing with the banks on commercial terms. They will get a builder to build the project for an agreed price. It could be a design and build project. They can appoint the operator to manage the facility and bring in the events.

From this explanation, it is quite clear the normal procurement is a straight forward arrangement. It was rather naive for the government to go into the PPP which brings along so many unnecessary problems that have to be handled.

Aviva MyCare policy

The Aviva MyCare policy is a life insurance policy that provides for long term care. The policyholder, age 43, pays a premium of $564 a year for the whole of life. 
When the policyholder becomes severely disabled, which is defined as the inability to carry out at least 3 activities of daily living, the policy pays a monthly benefit of $1,300 for up to 12 years. 
Is this policy worth buying? Here is my analysis.
Note - the MyCare policy is a supplement to the Eldershield policy, which can be bought with CPF Medisave savings. The coverage is similar to Eldershield, but the premuim and amount of benefit is different.

A bad PPP model for the Sports Hub

Wee Meng said:
The entire sports hub was built via a PPP model, which is ridiculous. PPP only works when the country is in debt and needs the private sector to help in the financing. In our case, it is unfathomable that our govt has to "borrow" from private funding and hence subject to paying incredulous interests over the span of the 25 yrs contract, with tax payers' money no less. With our huge reserves, our govt can clearly finance it without having to incur huge interest payments.
I agree that it is "stupid" to adopt the PPP model for the Sports Hub. What to do ,when our ministers and top civil servants have no business or practical experience?

Sports Hub $1.3 billion

I asked an architect, who was involved in the project, why the Sports Hub cost $1.3 billion?
He said that the Sports Hub is more than the stadium. There are 7 structures - national stadium, indoor stadium, arena, aquatic center, mall, office and a huge car park.
The actual cost of the national stadium is probably half of the total, i.e. $650 million (but this is just a guess). It is expensive because of the retractable roof that allows the national stadium to be used for all weather.

Improve your property yield in a weak market

The property market is weak. But you can take some action to improve the return on your property investment.

If you own a property that you are renting out, you will probably face the risk of a vacant property when the current tenancy runs out.

You can avoid this risk by listing your property several months ahead of the expiry date. This gives you a better chance of finding another tenant who like your flat or house due to its location, budget and available month.

You can advertise your property at our website, and it is FREE. You can rent out a flat, house, office, shop or factory. You can also rent out a room in your HDB flat.

If you own a condo unit that was developed many years ago, you can get a better value when it is placed on a collective sale. You can register your interest in this website and get the other owners in the condo to register also.

Although the collective sale market is quiet, there will be an upturn in the property market when there is a change in government policy or an improvement in the global economy. If your condo is ready for a collective sale, you can move quickly and catch the market upturn.

An important message for young people for 2016

With a new year around the corner, I wish to share this message to the young people of Singapore who started work recently or will be entering into the workforce next year.
You have studied hard and done well in the exams. You have found or will soon find a job that pays quite well. You will have some spare money - if you do not spend all of your salary lavishly.
Someone, probably an insurance agent, adviser or consultant, will soon approach you. He or she is usually a person that you know, maybe a classmate or a friend.
The insurance agent will tell you about the importance of saving, investing for the future, and protecting your family against unforeseen calamities The agent will be quite convincing - as they have been well trained in this sales pitch.
The message that the agent give to you is correct, but the insurance policy that the agent recommends to you is usually bad for the buyer.
Many young people, maybe 20,000 each year, will buy the wrong policy and will be locked up in a poor yielding policy for the next 30 years.
I have seen many examples of the typical policies bought by young people that give them (say) $300,000 after 30 years when they should be getting $500,000. YES ... the difference is $200,000 and this is what they will lose out. (This is for a monthly saving of $500).
This information is shown in the benefit illustration under the column called "effect of deduction". But most buyers are not aware about it. When they learn about it later, it is too late. They have locked up their savings in a bad policy and can only get out by suffering a large loss.
You can avoid this disaster. You only need to spend 3 hours and $30 to attend my talk on financial planning.
I will show you what to look out for when you buy a life insurance policy. More importantly, I will show you how you should invest your savings in an index fund that gives you the best return over the long term, and the flexibility you will need in an uncertain world of today.
My talk is held on Saturday 9 January in HDB Hub in Toa Payoh. I conduct this talk once in 3 months, so you should not miss this talk. You can find out more details and register for this talk at this webpage

Friday, December 25, 2015

Claim and profit ratio of insurance policies

Dear Mr. Tan
Thank you for sharing the statistics about the claim ratio and the profit ratio of various insurance policies.

I looked at the critical illness policy, which I have bought from (name removed). Can you tell me why Prudential has a claim ratio of 18.3% and a profit ratio of 27.1% while AIA had a higher claim ratio of 25.0% and a higher profit ratio of 38.9%?

Does it mean that Prudential has higher commission and expenses than AIA?And why is AIA listed twice in your website?

I show the link to your webpage

The figures are taken from the MAS website.

Before arriving at the profit, the insurance company provides the premium, claim, commission, expenses, reserves and investment income.

If you register an account and sign in, you can see the full view which shows the commission and expenses as well.

AIA is listed twice because they operated as a branch of AIA Hong Kong previously and now as a separate Singapore company in the later years.

Forbes magazine article about Donald Trump

Real estate mogul turned presidential hopeful Donald Trump has stunned the political establishment with his sustained popularity in the polls since he announced his candidacy in June. 

Trump has garnered huge amounts of media attention from around the world. He has stirred controversy, starting with his negative remarks in June about Mexican immigrants and his call to build a wall between Mexico and the U.S. and force Mexico to pay for it. He followed with a plan in August to deport more than 11 million illegal immigrants. 

Trump alienated some women voters with a critical remark about Republican presidential candidate Carly Fiorina's looks. He insulted Sen. John McCain's military record. 

Despite such gaffs, he still polls well. Trump and Forbes have disagreed about his net worth for 32 years. In September Forbes put his net worth at $4.5 billion; Trump claims he's worth $10 billion or more, $3 billion of which is the value of his "brand." 

Trump admitted to Forbes in September that the magazine had listed his net worth "too high" in the early years on The Forbes 400 list -- and that in turn it helped him secure financing.

My experience in a collective sales of a condo

I was actively involved in the collective sale of Thomson View Condo for several years. On the first occasion in 2009, I was the chair of the Sales Committee. We were not able to find a property developer who was willing to submit a bid for the property based on the asking price. I knew the problems that had to be faced by the committee in handling this task.

Two years later (in 2011), another Sales Committee was formed. I opted out as I could not spare the time. The new Sales Committee worked very hard. They were able to get a property developer to submit a bid above the asking price at the very last minute, before the deadline expired.

Unfortunately, a few of the objecting owners brought the case to court. The court decided that the collective sales could not be enforced due to some technical issue. It was a big disappointment to the consenting owners.

A year later, some of the owners approached me to form another Sales Committee. I declined, as it was too much work, and quite unappreciated.

However, I said that if there were enough owners who were willing to register in a website, I may be able to help get another Sales Committee to be formed. We need the consenting owners to give their particulars in the website, and to help to get other owners to support the collective sale.

This website is now ready.

The website can be used by the owners of ANY CONDO in Singapore to register and to get other owners to support the collective sale of their condo.

Although the property market is soft now, it is better to get ready for the next property upturn. When it comes, the condos who are ready will be able to catch the boat.

Long term property investment

Dear Mr. Tan
May I also enquire your opinion about Iskandar properties in Malaysia? I have bought a 2-bedroom room unit 2 years ago and I am regretting now. There is so much news on the oversupply problem. I bought mainly with the intention to rent out. But this could be a problem as they may be no tenants and the rental is low. I am contemplating give it up now.
For the Iskandar property, you can give me a call at 66599611 (office) for a chat. I personally feel that it is a good long term investment. However, I am not sure if you have problem in servicing the mortgage payments.
How about listing your Islandar property in this website,

Private bus operator face new challenges

I asked a private bus operator if the drop in petrol price helped his business. He said that he saves $1,000 in fuel cost each month. But he has problem in getting workers.

He is a sub-contractor and relies on the main contractor to pass the transport jobs to him. The main contractor is squeezing him by reducing the share of the income that is passed to him.

He said that many of the people like him went bankrupt. They could not make ends meet. He is also thinking of calling it a day.

This is another example of the bad economic policies that is pursued by this government.

Badly affected by global and internal factors

Singapore's economy is affected by the global demand. When the global demand contracts, we will feel its bad effects. This is beyond the control of our government and businessmen, so we cannot blame anybody.

However, the drop in demand affects our business sector more acutely because of our high cost. So, it is exceptionally painful. This is a bad result of our economic policies that push the rental and the cost of doing business at a high level.…/singapore-s-…/2374516.html…

10 year old blog on marriage

Hi Mr Tan,

I came across your blog post, dated June 2005. I was only a 17-year-old year 2 polytechnic student back then.

I particularly like your comment regarding marriage:

"- marry early
- have children early
- live simply and on one income
- do not need to buy an expensive house
- enjoy the things in life that are free: clean air, nice parks, beach
- save 15% of your earning to meet the rainy day - if you should be retrenched

I think that this is possible. Just compare with people who are able to survive on a lower salary."

I still think what you've said back then applies 10 years later, today. Sometimes, the best things in life come free. =)

Thursday, December 24, 2015

A difficult balance act

A SMRT manager told me that his CEO had a difficult job. He gets instructions from the regulator, i.e. the Land Transport Authority and the minister to increase the train service to 3 am on the eve of public holidays.

If he agree to the request, he will have to sacrifice the maintenance of the system and the train may break down the following day, leading to heavy fines on SMRT.

If he does not agree with the request, he gets into the bad books of the regulator and the minister.

Guess what he did. And what will you do, if you were the CEO of SMRT?

Get ready for the property upturn

The property market and collective (en bloc) sales is now quiet. It is a good time for owners to prepare for the next property upturn.
Register here:

MAS Insurance Statistics

Here are the profit margins for the various insurance products, based on data taken from the MAS website.

If the profit margin is more than 10%, the consumers are paying a premium that is too high. The market is not competitive in bringing down the premium.

Enchanced MediShield


Critical illness


You can see the results for the other classes of business. You can also see the results for a selected company

If you wish to see a fuller breakdown of the results, you have to register as a user and sign in as a user. It is free.

Collective sale of condominium

This website allows the owner of a condominium unit to register his or her support or objection for the collective sale (also know as enbloc sale) of the condominium. The owner will receive a weekly email showing the level of support for the collective sale and messages posted to the owners.

Sales Committee
When the support for the collective sale has reached the required level of 25%, the website administrator will arrange for a meeting to be held to elect a sales committee. The committee can take over the administration of the effort for that specific condominium.

The sales committee can communicate with the owners by sending messages to the owners. The owners can view the messages when they receive the weekly emails.

Click here to register as an owner

Wednesday, December 23, 2015

Will Donald Trump be the next US President? Quite likely!

A few months ago, when Donald Trump indicated his interest to be a Republican candidate, most observers considered that he would not last long in the race.

By now, he is clearly the leading Republican candidate. He has a good chance of beating Hilary Clinton or any other Democrat candidate.

I have watched videos of his interviews and rally speeches. He is really a formidable force. He is very energetic and has clear and strong views. There is a strong likelihood that we will see a President Trump in 2016.

What makes Donald Trump so special, so different from all the other candidates?

Soursop website

Mr. Tan

How long does it take you to develop the Soursop website and how much does it cost for a person to have this type of website? I find it to be quite useful as it allows the customer to place an order and to receive details by email.


It took 3 people a total of 6 hours (i.e. about 2 hours per person) to develop this website. The time is reduced considerably as the website uses the "standard codes" that have been developed for similar website.

I develop it for my friend David, so he does not have to pay me for the website. I hope that he will get some orders for the soursop leaves.

David has been taking care of his sister who has been undergoing cancer for several months. A friend recommended the drinking of the soursop leaf tea. David found the results to be most encouraging, so he wishes to get other people to try it.

I hope that other people who try this tea can also share their experience, e.g. medical reports to show if it produced any improvement to their health.

Click here to view the website.

Soursop Leaf Tea

A few people have asked me on where to get the soursop leaves. They have friends or family members undergoing cancer treatment and they like to try the tea.

Here is the website. I developed it for a friend. You can order the leaves. You have to pay a small price, but it should be worth it.
You can also read the testimonials of a few people who have tried the tea.

A better approach to handle terrorism

There were long queues at the causeway and the second link during the holiday season. More people were travelling by car to Malaysia. The Singapore authorities also introduced "heightened security checks" as a counter terrorism measure, following the Paris terrorist attack. Each motorist has to spend about 3 hours in the traffic jam.

I consider the method of "heightened security checks" to be primitive. Apart from causing the massive jams and inconvenience to many tens of thousand motorists, it is probably ineffective in stopping arms or undesired terrorists from entering Singapore. The terrorists would be able to find better ways to get around these "heightened security measures".

A better approach is for the police to use modern technology to combat these terrorists. They can use intelligence to identify the potential terrorists and to observe them closely. They can move to nab them when the evidence confirm their action.

An example of this kind of action is the recent arrest of the plotters by the Australian authorities. Link to article.

Here is another example from France. Link to article.

Our authorities can use modern communication and surveillance tools and connection to the people through the social media to do their work. We should train investigators and detectives as professionals in ground work, rather than deal with problems behind a desk.

It is time for our police to upgrade their competence.

Tuesday, December 22, 2015

Should you buy the upgraded Eldershield?

Hi Mr. Tan
Currently I'm just going into understanding the ElderShield. On the surface, it looks good what the government has introduced - the Eldershield (ES) Scheme. It sounds timely, relevant and sufficient.

However, there has been so many calls from telemarketing/insurers to advice us to upgrade the ES coverage. So, I'm really confused now. I need to understand the ES properly and know the loopholes of this before engaging another party.

Last year, I had met with an AVIVA officer (at random) last year and he gave a good impression that he was sincere, and he also explained and had me understand that it makes more sense to use the premium (which I cannot take out) to upgrade on the ES coverage.

I know once I sign up I may regret it without knowing the loopholes further. However, I'm unable to breakdown the levels of loopholes in all this schemes due to lack of experience and foresight. So, if you are able to share more on this, I would greatly appreciate it.

The telemarketers and agents want to earn an attractive commission by selling the upgraded Eldershield to you.
The insurance companies make a big profit margin on this product.

So, the consumers are paying a high premium and getting back only a small percentage back as claims. It is better for consumers to keep their money in the CPF to earn 4% interest. When they make a claim at an advanced age, they can draw out the money from the CPF.

Keep the money for yourself. Don't give it to the insurance company as profit.

How to combat terrorists

The Immigration and Checkpoint Authority introduced stronger security measures during the holiday season to prevent arms and undesirable people from entering Singapore. Unfortunately, this has led to long queues at the entry points. Read this article.

Is this a good approach? Is there a better way to handle security measures in the modern day?

Here are some of my thoughts.

a) If the terrorists wishes to bring arms into Singapore, they are likely to find other ways to ship them into Singapore, rather than bring them in vehicles across the border during the holiday season.

b) If they wish to use this method, they can choose to bring the arms in before the holiday season, where the checks are less stringent.

c) A better way to prevent terrorist attacks is to have more policemen at places where there are large crowds and ask them to be alert to look for suspicious people. We can also use surveillance cameras more effectively.

Jamming the Causeway and Second Link does not seem to be a good way to implement stronger security measures?

Just my thoughts.

Monday, December 21, 2015

Apartment with excellent view

This apartment is available for rental from 1 March 2016. It has excellent view of Singapore from its 17th floor.

Mr LKY's Oxley Road home

Two thirds of the respondents prefer Mr LKY's house in Oxley Road to be demolished, as stated in his will. Read their reasons and comments.

Challenge for our "super" transport minister

This is a challenge for the new transport minister. I consider him to be a "super" minister because he was able to solve many difficult problems in other ministries by taking the right step.
I wrote this letter, which was published in the Straits Times in 2012. The Land Transport Authority did not bother to consider it - at least they don't bother to contact me.

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