The announcement that local water-treatment firm Hyflux has received a fourth non-binding letter of intent for a potential investment from a Chinese power service provider raises some concerns (China state-owned firm's unit eyeing Hyflux assets, June 15).

This is not the first foreign firm to express interest in taking over the lucrative business of water treatment. Hyflux was due to sign a binding agreement with United Arab Emirates utility Utico for its $400 million investment on Monday.

The firm is in talks with seven potential investors and intends to enter a binding term sheet with one of them soon. Hyflux has declined to name the potential investor but said that it is a subsidiary of a state-owned enterprise that provides power services.

This is alarming as water is a scarce resource in Singapore. The demand for water in Singapore is ever-growing. For the average consumer, they could see a hike in water prices as the private entity seeks to maximise profit on their investment.

It would be very dangerous if a foreign state-owned enterprise had control over the production and supply of this precious resource. It is not only a threat to national security, but Singapore would also be obligated to the foreign state. What would the implications be if relationships between the two nations sour?

We must consider both the explicit and implicit costs of allowing a local water-treatment firm to fall into the hands of a foreign state-owned enterprise.

The Government must know when to step in when the market is not working in order to secure political and social objectives.

I urge the Government to assess the offers made by potential investors and offer a fair sum to Hyflux to take over its assets.

Mark Junyong Ong