Market liberalisation not always the answer

I agree with Mr Ben Chen Bin that the liberalisation of certain markets, such as utilities, may not always produce the desired benefits ("Keep things simple, affordable"; Oct 26).

Having a large number of participants in a given market can be counterproductive. Market share can become so fragmented that individual firms do not enjoy sufficient economies of scale to maintain basic service quality, or spread their operating costs.

This is an especially relevant concern for infrastructure-dependent power companies.

Moreover, should consumers be presented with a bewildering array of pricing plans from various suppliers, the potential for erroneous decision-making is high, as is the possibility that malicious firms may resort to unscrupulous sales tactics.

As a result, prices will remain high, if not increase, under a regime of excessive liberalisation.

Consumers are most likely to benefit when a single trusted entity like Singapore Power is responsible for all aspects of electricity provision, charges according to a uniform price structure, and operates under extensive government oversight.

Paul Chan Poh Hoi