Financing long-term infrastructure projects with short term foreign currency deposits was never wise in the first place although it appeared then to be the easiest route. When the Asian financial collapse came in 1997, many of my compatriots could not escape its worst ravages, they were not spared the foreign exchange losses and many were devastated. They were not prepared for what Shakespeare warned “The slings and arrows of outrageous fortune” – the kind of reversal for which in this uncertain world of ours we must be most prepared.
To make our initiatives work in Malaysia we had literally to reinvent the financial wheel. We borrowed in Malaysian currency instead of foreign currency and in the process created the first long-term 15-year bond. We have always felt that Malaysia should tap into one of its greatest assets – its high savings rate rather than become liable to volatile exchange rates.
We assisted the government in setting up a new regulatory framework largely along the British path. We had to introduce the Infrastructure Project Listing Category (IPC) Listing through the Kuala Lumpur Stock Exchange to seek funds from local and global investors on a fast track. We succeeded. The expensive floating debt was retired. This single act improved the bottom line and cash flow by a large margin.†† The surplus cash flow was distributed as dividends to the shareholders, much to their delight. The intellectual capital of Schroders and other houses complemented our efforts.
In a similar fashion, we found the answer to the fast rail link project connecting the Kuala Lumpur International Airport to the Kuala Lumpur Central Station in the city. The journey takes only 28 minutes. A profitable train service is almost an oxymoron. This train is similar to the Heathrow-Paddington Express but we built it at a fifth of the price. We simply had to as we wanted to price the fare at only a mere 35 ringgit or £5 for the 57-kilometre journey (the cheapest fare per kilometre in the world). This was done so that an average man in the street can ride our train and yet we are starting to make profits in our second year of operations. This time again the technological prowess of Siemens complemented our efforts.
Getting support for these new ideas was difficult and will remain difficult. There were many times I felt like I was cursed like Sisyphus of old. Many times I pushed the heavy stone uphill to see it roll back only to repeat this arduous task again and again. It is good that after much effort and courage of conviction some stones are staying on top of the hill but then again there are new stones to roll while keeping an alert eye on the stones already at the top.
You can see that there is little glamour in what I do for a living but I have somehow gotten used to it. I have no idea how Fortune magazine described me flamboyant when I am down to earth and dowdy to the core.
I truly accept that our experience in owning and managing Regulated Assets in Malaysia stood us well in the acquisition of such assets in Australia and the United Kingdom.
In Malaysia it was our self-regulation that produced world-class services at third world prices. It was a case of enlightened self-interests! The regulatory framework in UK and Australia however ensures that the Regulator is forced by the full weight of the law to look after the interests of both the investors and the consumers in equal measure. Nothing can be fairer than an independent regulator armed with integrity conducting his affairs in a most transparent manner in full glare of the public eye. We find little to complain in our investments in regulated utilities in both territories, indeed we found the experience most profitable. More than two thirds of our revenues are now derived outside of Malaysia. We are no longer†hostage to local or regional economic cycles.
So there we go – we march on for more regulated utilities throughout the globe. As a leader, there is nothing more sobering than the fact that your ten million customers throughout the globe are voting with their feet, twenty-four hours a day on your services. Technically, the security of my job is a mere twenty-four hours short! The fact that I have lasted this long in my job means I am blessed with very talented people who rose to the occasion on every occasion in facing these severe challenges. I humbly pay due respect to them, I salute them and offer my gratitude in full.
Tonight I would also like to salute all of the Fortune magazine’s Asia’s powerful 25. They are all great leaders, talented and courageous, gifted with vision. Together they bring much joy to customers and they prosper their shareholders. Not by chance, they are also serial job providers.
In the beginning I said I accepted this accolade with humility and so it is that I must also end with a note of humility. It is a rare honour in any case to take part in a Fortune event so intriguingly called a Power Dinner. There is no more coveted place to be – it makes one feel one has arrived.
Alas, the truth must prevail. I owe this singular honour to my Lord Jesus Christ and therefore I give the entire honour back to HIM. He writes the scripts, most beautiful of scripts and I am but a mere wiggly willing pencil. How else can one explain my presence here as a peer amongst such illustrious company? Where did all my ‘Vision Thing’ come from?† What about my perseverance marinated with courage to act and then to act at the right time, each time? Most of all, where is the source of my peace and comfort through faith? Sure that as all were well in the past, all will be well in the future! You see, I have learnt well that without God, you can swim in the ocean of knowledge and still come out completely dry. This is why I have always sought Him first, and in this I always will. He is the true Power of One.
Ladies and gentlemen, I thank you very much indeed for your patience in lending me your ears. May God continue to cause His face to shine upon you and continue to bless you and prosper you and give you peace.
Thank you very much.
Tan Sri (Dr) Francis Yeoh
Managing Director, YTL Corporation Bhd
Speech delivered at Fortune magazine’s “The Power of One”
in Hong Kong on Thursday, August 26, 2004.