The shipping industry has been plagued with great overcapacity over the years and has seen falling profit margins. The planned increase of supertankers means this slide is likely to continue.
Already, we see attempts at consolidation between liners overseas to cut costs. Considering that NOL has been struggling for quite some time, it would be wise to cut losses at this stage.
I agree that selling off a bit of Singapore Inc is not necessarily a bad thing. Taking difficult decisions based on financial necessity rather than giving in to nostalgia is important in managing our sovereign wealth funds.
When former British prime minister Margaret Thatcher sold many unprofitable state-owned companies, it cut losses for the government and benefited the public purse in the long run.
The sale of NOL, though considered a loss of a national icon by some, is a wise economic decision for the taxpayer.
It also opens up doors for other state-owned enterprises to be sold as well. This will give their directors greater motivation to achieve results and profits, and make them more accountable to the taxpayer.
Lionel Loi Zhi Rui