SPEECH BY MR S ISWARAN, SENIOR MINISTER OF STATE FOR TRADE & INDUSTRY AND EDUCATION, AT THE TUAS POWER NATIONAL DAY OBSERVANCE CEREMONY, FRIDAY, 14 AUGUST 2009, 1025 HRS, TUAS POWER PLANT Mr Lim Kong Puay, President and CEO of Tuas Power, Mr Tay Seng Chye, President of the Union of Power and Gas Employees (UPAGE), Mr Nachiappan, General Secretary of UPAGE,

Union Leaders,

Staff of Tuas Power,

Ladies and Gentlemen, 

Good morning.

Introduction

I am very happy to commemorate National Day at this Observance Ceremony jointly organised by the Union of Power and Gas Employees (UPAGE) and Tuas Power Ltd.

Impact of Divestment of Gencos on Labour Movement

The power industry has come a long way since the corporatisation of PUB’s electricity and gas operations in 1995. In the same year, Tuas Power was formed as a wholly-owned subsidiary of Temasek Holdings to introduce more competition in the sector. This goal was realised in 1998 when Tuas Power Ltd entered the Singapore Electricity Pool and began trading electricity.

To inject greater transparency and competition, gencos under the Singapore Power Group were transferred to Temasek in 2001 with a view to eventual divestment. Newer players have also entered the industry to create a more vibrant energy market.

Overall, the government’s decision to open up the industry has resulted in more competitive electricity prices and a more efficient power industry.

Older gencos however, had to adapt and rationalise their operations to remain competitive. Some redundancies were inevitable as more efficient plants in the gencos resulted in less manpower needs compared to the older plants. During that challenging transition period, the sector faced a series of retrenchments in 2003 and 2004.

At the company level, workers had to reorganise themselves with downstream adjustments such as the alignment of pay structure with performance, new shift patterns and leave arrangements.

Importance of a Tripartite Collaboration

The gradual but sweeping changes to the industry were carefully considered by the government. Such change would not have been possible without the support of the union and its members.

During the restructuring phase, the then Minister for Trade and Industry engaged the key union leaders directly, namely Comrades Nithiah Nandan, Rahman Mahbob and Nachiappan to work out mutually beneficial agreements. We were heartened by the commitment exemplified by the union in each of the government-union engagements.

In 2007, during Temasek’s divestment of the gencos, the CEO and senior management team of Temasek actively engaged the key union leaders to draw up plans for the sale of the gencos.

There was mutual respect, information sharing, trust, and cooperation as the government and Temasek worked with UPAGE to restructure the industry.

These values and principles also echo the basic precepts of Singapore's unique tripartite model of industrial relations, which underpin our industrial harmony and strong economic growth over the last few decades.

As new leaders come to the fore, the challenge for the union and its management partners is to find ways to inculcate such fundamental values and trust in the newer generation of leaders.In this way, a culture of information sharing, respect, consultation and cooperation can permeate the workplace to encourage tripartism

Privatisation of energy assets in many countries has met with hostility and resistance by unions.However, in Singapore, the restructuring of the industry and the sale of the gencos were completed smoothly with UPAGE being very much involved in the process.

I would like to take this opportunity to pay tribute to both the past and present leadership of UPAGE for your constructive approach to change. Indeed, the union and its members have displayed a strong sense of responsibility and sound judgement in the industry’s restructuring plans. Throughout the process, you have adopted a responsible approach taking into account the long term interests of workers, the industry and the nation.

This is a responsibility that must be shared by the owners and managements of our gencos.Energy is the lifeblood of any economy and, since the liberalisation of the energy markets, the gencos have done well to ensure that our generating capacity is efficient, relative to international benchmarks.I commend you for your efforts.

Going forward, I encourage the gencos to explore new ideas and new technologies to enhance the efficiency and productivity of the sector.This would, in particular, require a commitment to capacity building. New equipment and technology would require retraining and it is imperative that the companies work closely with the unions to ensure that this is done smoothly and ahead of time.

Earlier this year, the government announced its $20.5 billion Resilience Package to help companies and workers in this downturn.I am glad to note that companies in the power industry, including Tuas Power, are putting these measures to good use, especially by leveraging on the SPUR programme to upgrade the capabilities of the workforce. With our unique brand of tripartism and strong labour-management relations, I am confident that we will withstand this economic downturn and emerge stronger when the upturn comes.

Conclusion

On this note, I would like to wish all of you a Happy 44th National Day.