The strategy to preserve strategic interest of the nation

It has now reached the cross road about the strategy of the preservation of the strategic interest of the nation, with the decision to retain Edra Global Energy Bhd. within the control of Malaysians or allow foreigners to inch their way in, as part of the 1MDB ‘Rationalisation Plan’.

The Star story:

Thursday, 5 November 2015

Qatar’s Nebras-CGN tie-up said vying with TNB for 1MDB power arm

The overseas bidders had expressed willingness to pay a higher price for the state investment company’s Edra Global Energy Bhd unit than Tenaga Nasional Bhd (TNB), the people said, asking not to be identified as the negotiations were private.

State-controlled TNB is wary of overpaying because it needed to justify any acquisition to shareholders, one person said. (File pic shows one of the power stations owned by the unit.)

The overseas bidders had expressed willingness to pay a higher price for the state investment company’s Edra Global Energy Bhd unit than Tenaga Nasional Bhd (TNB), the people said, asking not to be identified as the negotiations were private.

State-controlled TNB is wary of overpaying because it needed to justify any acquisition to shareholders, one person said. (File pic shows one of the power stations owned by the unit.)

KUALA LUMPUR: Qatar’s Nebras Power QSC is in talks to partner with China General Nuclear Power Corp (CGN) in the bidding for 1Malaysia Development Bhd’s power business, people with knowledge of the matter said, potentially pitting a foreign consortium against Malaysia’s biggest listed energy producer.

The overseas bidders had expressed willingness to pay a higher price for the state investment company’s Edra Global Energy Bhd unit than Tenaga Nasional Bhd (TNB), the people said, asking not to be identified as the negotiations were private.

State-controlled TNB is wary of overpaying because it needed to justify any acquisition to shareholders, one person said. 1MDB, the debt-ridden state investment company that almost defaulted earlier this year, expects RM16bil to RM18bil for the power plants and has received bids close to that figure, president Arul Kanda said Oct 31.

The sale is part of 1MDB’s plan to wind down its operations after it drew criticism from lawmakers for rising borrowings that totalled RM41.9bil as of March 2014.

Foreign investors are normally only allowed to own as much as 49% of Malaysian power producers unless they obtain a waiver as the Government provides gas to electricity plants at subsidised prices.

It’s not yet clear whether foreign bidders for 1MDB’s power plants will be able to obtain an exemption, according to the people. State-owned CGN entered the bidding after its Hong Kong-based clean-energy arm CGN Meiya Power Holdings Co decided not to pursue an offer, according to the people.

A preferred bidder was expected to be chosen this month, two of the people said.

1MDB, whose advisory board is headed by Prime Minister Datuk Seri Najib Tun Razak, has said it expected to enter into a definitive agreement with the winning bidder before year-end.

It said “value maximisation” and “deal certainty” would be among the factors that would guide its decision. 1MDB “is bound by confidentiality” and can’t comment further at this time, it said in an e-mailed statement.

The Energy, Green Technology and Water Ministry didn’t immediately respond to an e-mail seeking comment. A spokesman for China General Nuclear declined to comment, while a representative for its main listed unit, CGN Power Co, didn’t immediately respond to a request for comment. R

epresentatives for Nebras and its controlling shareholder, Qatar Electricity & Water Co, didn’t respond to requests for comment.

TNB, which last month reported that its fourth-quarter profit fell almost 40%, has said its ownership of the 1MDB power plants would ensure “continuing Malaysian control” of those “strategic” assets.

It said 1MDB’s assets would enhance its earnings and cash flow by boosting its domestic power generation capacity and broadening its global presence. 1MDB owns a net generation capacity of 5,594 MW and is the largest independent power producer in Bangladesh and Egypt, according to its website.

Besides investments in plants in Pakistan and the United Arab Emirates, it has 3,112 MW of capacity in Malaysia, making it the nation’s biggest independent power producer after Malakoff Corp. – Bloomberg

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It seems that China General Nuclear Power Corp (CGN) has teamed up with Qatar Nebras Power QSC (Nebras), to take on TNB for Edra Energy’s 13 power plants which include five in Malaysia. Intially, CGN through CGN Meiya and Nebras submitted separate bids for Edra Energy.

However, CGN Meiya announced to the Hong Kong bourse that it withdrew and CGN the parent corporation would do the bidding instead.

The Federal Government which is wholly own 1MDB, the parent company of Edra Energy would be the final decision maker. Is the consideration is tactical, which is to settle part of 1MDB’s RM42 billion exposure to financial commitments through various commercial issued or something more strategic than that.

It is without doubt that 1MDB’s financial woes started when the initial plan of the listing of Edra Energy originally slotted about two years ago after a series of acquisition and consolidation of independent power plants (IPPs), did not materialise. So when it was shifted.

As such 1MDB had been laden with the financial commitments to service the borrowings with RM2.4 billion in cash annually.

The Star story:

Published: Saturday October 31, 2015 MYT 2:16:00 PM Updated: Saturday October 31, 2015 MYT 2:45:35 PM

Arul: Failed Edra IPO led to 1MDB’s troubles

BY AFIQ ISA

KUALA LUMPUR: A failed listing exercise for 1Malaysia Development Bhd’s (1MDB) energy assets last year is the main contributor to the firm’s present financial difficulties, said its chief Arul Kanda Kandasamy Saturday.

According to Arul, 1MDB had two targeted dates in which to list the assets, which are now held under its power unit Edra Global Energy Bhd. The first was in November 2013 and another date was set for November last year.

“In both circumstances, for various reasons including internal and external factors, the initial public offering (IPO) did not happen,” he told reporters during a press conference in Kuala Lumpur.

When the IPO failed to materialise, a mismatch arose between the interest charges that needed to be repaid in the short term as well as principal payments, Arul explained.

“That is my answer as to why 1MDB is facing the difficulty and challenges that we are going through today,” he said. Without reducing its current debt load of RM42bil, the cost of servicing the interest on the debt amounts to RM2.4bil per annum, he said.

Arul said that 1MDB plans to get reduce the entirety of this debt by June next year via a series of rationalisation exercises.

The sale of Edra to interested bidders, which is currently ongoing, is expected to reduce between RM16bil to RM20bil in debt from its books. With three bidders submitting final binding proposals, he said that 1MDB is currently negotiating a sale and purchase agreement while the counterparties are conducting due diligence prior to submitting a final offer. “

We expect this to happen in the next two or three weeks,” he said.

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Whether or not 1MDB could realise what it expected to get from the initially planned IPO two years should be as strategically important as what the outcome would affect Malaysians, now and in the future.

First and foremost, the capital market is no longer the level it used to be. The very least is the value of Ringgit Malaysia against the greenbacks, which is never about economic fundamentals nor the normal mechanism of foreign exchange.

Cutting loses now and realise it later with other 1MDB projects such as TRX and Bandar Malaysia, could make economic sense unless the consideration also include the political elements and pandering to pressures.

Just like about the part fallacy to pressure for TH to retain the 68,000 sq. ft. parcel for premium residential plot with TRX.

It has believed that TNB’s offer Edra Energy is RM14billion against the newly formed 100% foreign consortium of Qatar Nebras and CGN, at RM17.1billion.

The Edge Markets story:

TNB puts in lowest bid for Edra

By Kamarul Anwar / The Edge Financial Daily |

November 5, 2015 : 8:50 AM MYT

This article first appeared in The Edge Financial Daily, on November 5, 2015.

KUALA LUMPUR: Tenaga Nasional Bhd (TNB) has put in the lowest bid for the equity of 1Malaysia Development Bhd’s (1MDB) energy arm Edra Global Energy Bhd at slightly above RM8 billion, according to sources familiar with the matter.

The national utility company’s bid is understood to be about 20% lower than the closest competing bid from a foreign consortium, giving the latter an advantage over TNB to win the tender to buy Edra.

The competing bid, which values the equity in Edra at less than RM10 billion, was jointly submitted by a consortium consisting of China’s state-owned company China General Nuclear Power Corp Ltd (CGNPC) and Qatar’s Nebras Power QSC, sources told The Edge Financial Daily.

The two parties had initially come in as separate bidders. With an estimated net debt of RM8.5 billion in Edra’s books, the bids would place an enterprise value of between RM16.5 billion and RM18.5 billion for the energy unit.

1MDB president and chief executive director Arul Kanda Kandasamy previously said that Edra’s assets are valued at between RM15 billion and RM20 billion.

Note that the bidding prices may change slightly, as the final binding bidding deadline for Edra is tomorrow.

Price alone might not be the determining factor as foreign parties are limited to a maximum of 49% equity in local power assets.

However, it has been reported that the foreign bidders are applying to the government to remove the restriction and allow 100% acquisition of Edra’s Malaysian power assets. When contacted, a TNB spokesman declined to confirm the price the company had bid for Edra.

“We are [in] the midst of conducting the confirmatory due diligence process before the final deadline on Friday (tomorrow) for all bidders,” the spokesman said.

TNB president and chief executive officer Datuk Seri Azman Mohd in October said that being the sole offtaker of all power generated in Malaysia, TNB is the best and most logical buyer of Edra’s assets.

Yet, as the 1MDB drama has been a thorny issue among Malaysians, putting in a higher figure could make TNB look like it is bailing out the cash-strapped, debt-ridden 1MDB. Both these entities have a common shareholder which is the Ministry of Finance.

At about RM8 billion, TNB’s bid would meet the ceiling price that PKR’s vice-president and secretary-general Rafizi Ramli wants the government to put a cap on TNB’s purchase of Edra.

The opposition lawmaker yesterday filed a motion in the Parliament to cap TNB’s purchase of Edra at RM8 billion, claiming that it is the market value for Edra’s stable of power plants locally and abroad.

Looking at TNB’s balance sheet as at Aug 31, the utility giant had short-term borrowings of RM1.96 billion and long-term borrowings of RM22.71 billion — against shareholders’ fund of RM47.21 billion. Deducting the cash in hand worth RM2.47 billion, its net gearing level stood at 0.47 times.

In a hypothetical scenario where TNB buys Edra’s assets at RM16.5 billion (paying RM8 billion for the equity while assuming RM8.5 billion in liabilities) by using all the cash it has and borrowings for the rest, TNB’s net debt would amount to RM38.73 billion.

This is equivalent to 0.82 times its equity. With the ringgit still being Asia’s worst-performing currency and having weakened against the US dollar by 21.98% year to date, this would make Edra’s power assets relatively cheap for the CGNPC-Nebras joint venture to acquire.

Combining their balance sheets would also give them more financial muscle to make their bid. Edra has 13 power assets in its current stable, with eight of them located abroad — plus the right to build a 2,000mw gas power plant in Melaka.

In July, TNB (valuation: 1.20; fundamental: 1.30) purchased a 70% stake in Edra’s Jimah East Power Sdn Bhd, the owner of two undeveloped 1,000mw coal-fired power plants better known as Track 3B, for RM46.98 million.

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TNB’s offer is made after a due diligence was made and the consideration is about what Khazanah, EPF and KWAP agreed with the consideration on what the shareholders would be willing to fork out for the 13 IPPs, which include 8 abroad.

That is not withstanding that the value is in Ringgit Malaysia unlike Nebras-CGN, is on US Dollars. TNB prepared its budget based on Ringgit Malaysia where else the foreign parties, made their bids on USD. When the bidding process started, USD was at the level of RM3.55 and their original bid of USD3.8b naturally would get prominence since at their end, it did not cost them any extra.

The shrinking of RM against USD automatically placed TNB’s position to be disadvantaged for added the value of the consideration offered by the after-thought foreign consortium, deemed more favourable.

Then again, the beauty contest should be more than just cash.

Second, 1MDB should consider Malaysian first. Edra Energy to be foreign owned means 75% of the value of the group, would be owned and controlled by foreign parties despite on five out of the thirteen IPPs are in Malaysia.

The proposal for Edra Energy is wholesome, which means that would open the doors of the Nebras-CGN to be a player in the Malaysian power production game.

5,590MW is not a small consideration for the Malaysian Government to ignore. It comprises about 47% of TNB’s current production in Semenanjung. Instead of having all that under control of Malaysians, the consideration for power security would change tremendously if Edra Energy is 100% foreign owned and controlled.

Third, the control of Edra Energy would just be a door opener for more acquisition by Nebras-CGN, part there of or related corporations to start to offer other IPPs to be foreign controlled too. That is eroding the strategic position of power security for the nation.

It is also believed that Ministry of Finance is supporting the notion that a special provision of exemption of the national energy policy be allowed for the 100% ownership and control of IPPs. Currently, it is at 49%.

TNB Capex

TNB Capex

Fourth point is that acquisition of Edra Energy is factored into TNB’s strategic development in the form of capital expenditure (capex), where the shareholders decided of RM6-8 billion capex per annum within five years.

This acquisition would increase TNB’s current long term gearing ratio against total asset of 35% to between 40-45%. This below the power generation corporation around the region, which is between 60-70%.

It is also interesting to note the weighted average of TNB’s current borrowing is at 4.6%. Comparatively, YTL Power is also at 4.6% and Malakoff at 4.8%.

TNB would strategically lose out to Nebras-CGN since the Chinese are able to secure financing at a cost of less than 3%.

The fifth point is the financial points with regards to TNB acquiring Edra Energy. The acquisition of the group of 13 IPPs is the ability for TNB’s exposure to financial commitments, taking into consideration its own profitability track record, the ability to restructure and meet its financial commitments and projection, with and without the acquisition.

Considering that fact also means TNB would attain better economies of scale and cost of power generation, distribution and maintenance of assets for the said operational activities could be maintained at an optimum level for consumers.

All the 13 IPPs are operational, profit centres and earning cash.

Projection of power

Projection of power

The sixth point which is an extension to the fifth point is that TNB would be expanding its current level of group consolidated revenue and net income.

Currently, TNB is already the single largest contributor to Khazanah Holding Bhd’s portfolio of investments. Better profitability would contribute to higher net income to the Federal Government via the dividends distributed by Khazanah, on top of the taxes collected.

TNB is also one of the largest corporations in Malaysia. It could be measured from the perspective of group revenue, EBITDA, total assets, market capitalisation and 34,000 odd workforce.

The seventh point is value that Edra Energy would brought forth in TNB and Khazanah. The news about the lowest bid for Edra Energy today already shot TNB shares by more than RM1.00.

It is without doubt about the market bullishness on the possibility that TNB acquiring Edra Energy and offer better value and net income to investors.

TNB shareholders

TNB shareholders

The three major investors of TNB are Khazanah (29.7%), EPF (15.9%) and KWAP (8.9%).  Higher dividend yields is reflective of the better direct commercial benefits of 54.5% the shareholders, which covers almost all retirees now and the future.

Currently, TNB earning per share (EPS) is at 108.4 sen and dividend is at 29 sen per share.

The eighth plan is the acquisition of Edra Energy is an opportunity for the Federal Government to indirectly provide TNB’s opportunity and role to be an international power producer. The eight IPPs abroad which would add to the expansion of the current portfolio.

Its the perfect opportunity for TNB to be an instant player in international power production game. The IPPs under Edra Energy would generate its own revenue and cash to sustain operation and contribute into the consolidated group books.

These power production brown fields would cut the process short as compared if TNB were to start from greenfield upwards.

The ninth point for consideration is about also related to finance. It is learnt that TNB plans to restructure all the RM6billion borrowings that come with Edra Energy upon consolidation into the financially sound TNB Group.

TNB’s current net total asset position and the advantage of having RM2.5 billion in cash would provide the better position for these borrowings to be restructured for more favourable commercial papers, rates and strategic terms.

The tenth point is about the vendor program of TNB. As an end-to-end power producer, distributer and asset manager, TNB would open up for more opportunities for all the vendor development programs which include the Program Pengilang dan Pembangunan Vendor Bumiputera.

TNB vendor development program has demonstrated great success that the vendors are able to provide better rates. These vendors already serving TNB through subsidiaries like TNB Remarco would now have the opportunity to be in the international arena.

The eleventh and probably most important point is that for the strategic interest of energy production and energy security, the majority control of the end-to-end factors of production of power of generation, distribution and management should in the hands of Malaysians.

It is also believed that TNB would be in a better position to negotiate with upstream energy providers such Petronas and authorities in the likes of Energy Commission and Ministry of Energy and Green Technology. It would be translated in better terms in the new and renewed power production agreement (PPA) and safeguard the interest of all stakeholders, especially the consumers.

Out of 8.4 million TNB accounts, 80% of them are dwellings which only contribute to 20% of the revenue.

The twelfth point that the consolidated power production of TNB in Malaysia (current at 11,700MW which is 55% of the Malaysian power generation) would be raised to 17,300MW after the acquisition of Edra Energy where the five IPPs producing 5,590MW.

That capacity would propel TNB to the power production around the region in the likes of China Light and Power (18,800MW).

It is believed that 1MDB was the strategy to provide long term benefit for the power production and energy security of the nation. As planned, then the market capitalisation, value creation and projected income from Edra Energy was to be prtly resolved upon the initial and later the revised IPO.

The thirteenth point is that 1MDB board of directors (BoD), board of trustee (BoT) and Ministry of Finance should realise that Edra Energy should be acquired by TNB for consideration offered and the process to arrive at the point.

The fact is that the extraordinary general meeting (EGM) for the acquisition would be decided primarily by Malaysians for a successful Malaysian plc, is a worthy consideration for 1MDB to make the necessary concession. It would also provide a considerable relief of the current financial and cash-flow woes.

The fourteenth point is that 1MDB need not to make money, for the relieve of Edra Energy from its books.

The Rationalisation Plan tabled to Cabinet on 28 May 2015 could also be restructure for the consideration the left-pocket-to-right-pocket transaction, where the positive realisation would be in the form of strategic benefits by TNB, Khazanah, consumers and Malaysia’s long term energy policy.

The fifteenth and final point is the summation of all these points that the strategy that 1MDB started out to with the acquisition of all 5 Malaysian IPPs and 8 abroad could be realised through Edra Energy being reconsolidated under TNB.

The beneficial realisation from the acquisition of Edra Energy of the consolidated power generation, distribution and management points for a brighter future for the consumers, Khazanah and the Federal Government. After all, power and energy security, is one of those top most priority and  strategic importance the Federal Government should preserve.

 

Published in: on November 5, 2015 at 20:00  Leave a Comment  

Orwell’s 1984, present

British Government is enacting a law which requires internet providers to keep information of website visitations and surfings for at a year.

BBC story:

Details of UK website visits ‘to be stored for year’

47 minutes ago
From the section UK Politics 912 comments

Media caption Home Secretary Theresa May: ”The threat is clear”

 

The internet activity of everyone in Britain will have to be stored for a year by service providers, under new surveillance law plans.

Police and intelligence officers will be able to see the names of sites people have visited without a warrant, Home Secretary Theresa May said.

But there would be new safeguards over MI5, MI6 and the police spying on the full content of people’s web use.
Mrs May told MPs the proposed powers were needed to fight crime and terror.

Follow the latest developments on our live page

The wide-ranging draft Investigatory Powers Bill also contains proposals covering how the state can hack devices and run operations to sweep up large amounts of data as it flows through the internet, enshrining in law the previously covert activities of GCHQ, as uncovered by whistleblower Edward Snowden.

The draft bill’s measures include:
Giving a panel of judges the power to block spying operations authorised by the home secretary
A new criminal offence of “knowingly or recklessly obtaining communications data from a telecommunications operator without lawful authority”, carrying a prison sentence of up to two years

Local councils to retain some investigatory powers, such as surveillance of benefit cheats, but they will not be able to access online data stored by internet firms

The Wilson doctrine – preventing surveillance of Parliamentarians’ communications – to be written into law
Police will not be able to access journalistic sources without the authorisation of a judge

A legal duty on British companies to help law enforcement agencies hack devices to acquire information if it is reasonably practical to do so

Former Appeal Court judge Sir Stanley Burnton is appointed as the new interception of communications commissioner

Mrs May told MPs the draft bill was a “significant departure” from previous plans, dubbed the “snooper’s charter” by critics, which were blocked by the Lib Dems, and will “provide some of the strongest protections and safeguards anywhere in the democratic world and an approach that sets new standards for openness, transparency and oversight”.

‘Better balance’
But Shami Chakrabarti, director of civil rights campaign Liberty, said: “After all the talk of climbdowns and safeguards, this long-awaited Bill constitutes a breath-taking attack on the internet security of every man, woman and child in our country.

“We must now look to Parliament to step in where ministers have failed and strike a better balance between privacy and surveillance.”

And Mr Snowden warned the communications data covered by the proposed legislation was “the activity log of your life”.

In a message on Twitter he said: “‘It’s only communications data’ = ‘It’s only a comprehensive record of your private activities’.”

Jump media playerMedia player helpOut of media player. Press enter to return or tab to continue.

Media captionAndy Burnham: ”We support the government in its attempt to update the law in this important and sensitive area”

The proposed legislation, which will have to pass votes in both houses of Parliament, would order communications companies, such as broadband firms, to hold basic details of the services that someone has accessed online – something that has been repeatedly proposed but never enacted.

This duty would include forcing firms to hold a schedule of which websites someone visits and the apps they connect to through computers, smartphones, tablets and other devices.

Police and other agencies would be then able to access these records in pursuit of criminals – but also seek to retrieve data in a wider range of inquiries, such as missing people.

Mrs May stressed that the authorities would not be able to access everyone’s browsing history, just basic data, which was the “modern equivalent of an itemised phone bill”.

But investigating officers will not have to obtain a warrant, just get their request signed off by a senior officer, just as they do now – some 517,000 such requests were granted last year.

If officers want to mount more intrusive spying operations, including accessing the content of emails, hacking into computers and tapping phones, they will still need a warrant from the home secretary or another senior minister – 2,700 such warrants were signed last year.

But the draft bill proposes giving a new panel of judges, known as the Investigatory Powers Commission, the ability to veto such requests.

Background briefings on the plans
Will UK spy bill expose porn habits?
Read more: ‘Spying’ powers explained
A new licence for spies and police?

The Commons reacts to spying bill
When police or security agencies apply to intercept someone’s communications, their plans would have to be first signed off by the home secretary but then approved by one of these judges.

In urgent situations, such as when someone’s life is in danger or there is a unique opportunity to gather critical intelligence, the home secretary would have the power to approve an interception warrant without immediate judicial approval.

The judges would also be able to refer serious errors to an outside tribunal which could then decide to tell the individual their data has been illegally collected.

The bill does not propose forcing overseas companies to comply with these orders.

The bulk collection of internet messages flowing through the UK by GCHQ, as revealed by Edward Snowden, is currently in a legal grey area, covered by legislation originally meant for other purposes.

The security services argue they need access to large amounts of data to help them monitor suspected foreign terrorists or criminals deemed to pose a threat to the UK.

The new bill would aim to put bulk collection on a firm legal footing, with the home secretary given the power to issue warrants, as set out in the graph below.

The flow chart to determine

The flow chart to determine

Graphic showing the process for securing authorisation to collect bulk data under the new draft bill – 4 November 2015

The estimated cost to taxpayers of implementing the Bill is about £247m over the next 10 years, including storage of internet connection records and the new warrant approval regime.

The draft bill is a response in part to a review by the government’s terror watchdog, David Anderson QC, who said in June the UK needed a “comprehensive” new surveillance law to replace the current “fragmented” rules.
Speaking on BBC Radio 4’s PM programme, Mr Anderson gave Mrs May’s proposals “four stars” but said it would be for Parliament to determine the extent of surveillance powers and safeguards.

He said: “This isn’t a licence for the police to simply prowl over everything you have been doing, but I quite accept that a lot of data is being kept by these service providers and under the government’s proposals it would be kept for a very long time.”

Person using computer keyboardImage copyrightPA

This creates “obvious risks” he said, adding: “I simply wouldn’t vote for this unless I had been very substantially satisfied that those risks had been minimised.”

Labour’s shadow home secretary Andy Burnham backed the draft bill, saying it was “neither a snooper’s charter nor a plan for mass surveillance”.

Former Lib Dem leader Nick Clegg said it was a “much improved model” of the legislation he blocked during the coalition government but said the “devil would be in the detail”.

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This is the added element into the British paranoia of terrorist attacks. For almost fifty years, Britons endured the threat of terrorist attacks which include bombing in public places which started by the Irish Republic Army. Now, its the Islamic State self proclaimed ‘Jihadists’.

United Kingdom is now a “Surveillance State”, where the nation boasts the highest number of surveillance cameras in the world at the ratio of  there is one every eleven people.

Telegraph story:

One surveillance camera for every 11 people in Britain, says CCTV survey

Britain has a CCTV camera for every 11 people, a security industry report disclosed, as privacy campaigners criticised the growth of the “surveillance state”.

 

Email
One surveillance camera for every 11 people in Britain, says CCTV survey
Photo: ALAMY
David Barrett By David Barrett, Home Affairs Correspondent6:30PM BST 10 Jul 2013 Comments128 Comments
The British Security Industry Authority (BSIA) estimated there are up to 5.9 million closed-circuit television cameras in the country, including 750,000 in “sensitive locations” such as schools, hospitals and care homes.
The survey’s maximum estimate works out at one for every 11 people in the UK, although the BSIA said the most likely figure was 4.9 million cameras in total, or one for every 14 people.
Both projections were higher than previous estimates which ranged between 1.5 million and four million.
Simon Adcock, of the BSIA, said: “This study represents the most comprehensive and up to date study undertaken into the number of CCTV cameras in use in the UK.
“Because there is no single reliable source of data no number can ever be held as truly accurate however the middle of our range suggests that there are around five million cameras.”

He added: “Effective CCTV schemes are an invaluable source of crime detection and evidence for the police. For example, in 2009 95 per cent of Scotland Yard murder cases used CCTV footage as evidence.”
But Nick Pickles, director of the privacy campaign Big Brother Watch, said: “This report is another stark reminder of how out of control our surveillance culture has become.
“With potentially more than five million CCTV cameras across country, including more than 300,000 cameras in schools, we are being monitored in a way that few people would recognise as a part of a healthy democratic society.
“This report should be a wake up call that in modern Britain there are people in positions of responsibility who seem to think ‘1984’ was an instruction manual.”
The survey included all cameras in public and private areas, regardless of whether the images are recorded or watched “live”.
It estimated there are between 291,000 and 373,000 cameras in public sector schools, plus a further 30,000 to 50,000 in independent schools.
Surgeries and health centres have an estimated 80,000 to 159,000, while there are believed to be between 53,000 and 159,000 cameras in restaurants, the report said.

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The ability to fulfil the objective of having access to anyone’s internet surfing history is practical if the website is not encrypted. Encryption is the key success factor to protect breach of information to unauthorised user and preserving secrecy and privacy.

Then again, the Home Ministry proposal to ban encrypted messages within UK communicators was attacked as “Economically irresponsible”.

Telegraph story:

Banning encryption would be economically irresponsible and ultimately futile

Forcing companies like WhatsApp and Snapchat to design security flaws in their software opens the door to everyone, not just benevolent spies

Email
Home Secretary Theresa May is considering the idea of giving senior judges the right to sign off intercept warrants

By Adam Afriyie MP10:55AM GMT 03 Nov 2015Comments122 Comments

The Government’s first duty must always be defend and protect British citizens, so I am delighted that it has kept cybersecurity firmly at the top of the political agenda.
In the same way that poorly implemented “stop and search” often exacerbated problems in the past, I worry that we could go down the same route with encryption technology.

Encryption keeps our details safe from fraudsters when we bank or pay for goods online and when we send private or commercially sensitive messages. It ensures that our passwords can’t be stolen by hackers and that we can keep our information safely on our computers.

The Government is rightly concerned about the risks of digital encryption technology, in the same way that it was concerned about invisible ink, encoded letters and faxes in the past.

If there is substance to rumours of a crackdown on encryption in the publication of new Investigatory Powers legislation, it would be as mistaken as it would be ineffective.
“Banning technology does not get rid of it”
Banning technology does not get rid of it. It either makes criminals of millions of normal internet users, or designates it the reserve of established criminals like drug dealers and terrorists.
Once a technology exists, you can’t wish it away, even if you underpin your objections with legislation. In China, where the Government has gone to great lengths to ban Facebook, an estimated 64 million people have slipped through the net.

Trying to enforce the unenforceable is a waste of taxpayers’ money and an unnecessary distraction for law enforcement agencies.
Let’s also remember that encryption is hugely beneficial to online security. To take one example, digital currencies rely on encryption to transparently verify online transactions. A record of every single digital currency payment is kept online independently, meaning that it is completely transparent and verifiable. Encryption therefore makes these transactions easier – not harder – to track.

If a criminal wants to remain invisible, they will stay offline, where the Government can’t track their conversations, emails or money transfers. The security services must embrace and adapt to popular, market-driven and ubiquitous innovations rather than seeking to put a billion horses back in the stable.

Knowledge of encryption is widespread in the technical and academic world. The futility of fighting dispersed knowledge of this kind would make book-burning look like a successful strategy.

Making encryption illegal in the UK will also push technical experts, businesses and entrepreneurs from our shores. Our welcoming and dynamic ecosystem of fast-growing technology clusters is attracting ever more businesses to Britain. Mixed messages from the Government about encryption risks warning off investors and businesses looking for their next base.
Encryption is the basis of many innovative companies that want to build trust with customers by keeping users’ details secure. We should be helping, not punishing the most successful cyber-security companies. Britain must remain open to the jobs and investments these companies bring. So let’s not endanger a job-creating, wealth-creating industry with clumsy laws.
Forcing companies to design security flaws in their encryption software opens the door to everyone, not just benevolent Governments. It would be ludicrous to ask for a “back door” for the security services, without recognising that it would undermine the integrity of the whole system. The security that encryption technology brings helps us all to feel safe online. If you remove that security then the trust between consumers and providers breaks down. That’s bad for consumers and potentially fatal for businesses.
“It is futile to fight the mathematics of encryption”
It is futile to fight the mathematics of encryption. The Government is right to continue with its tried-and-tested policy of asking companies to retain records of when, with whom and for how long people communicate, subject to proper judicial oversight.
A simple update of the existing powers to cover new technologies is really all that’s required. Companies that design internet communication software will now want to comply, if only to emphasise the point that an outright ban is unnecessary. This consensual approach will undoubtedly be the ultimate outcome, as the Government has recognised that a heavy-handed approach to encryption technology won’t work.
Banning apps like WhatsApp and Snapchat won’t work
We will stand a better chance of defeating cyber-crime by directing our efforts precisely rather than punishing millions of users in one fell swoop. If we’re serious about the emergence of digital Britain, now is the time to prove it. This requires sensible measures, not a knee-jerk response that could undermine an industry with the potential to keep Britain at the forefront of the global race.
Let’s go after the criminals, not the technology.
Adam Afriyie is Conservative MP for Windsor, Chair of the Parliamentary Office of Science and Technology and a former IT entrepreneur

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The debate now would be between the extreme advocates of privacy, access to free and uncensored information and personal rights and the paranoids of law enforcement agencies and the intelligence community.

Striking the balance between infringement on privacy and rights to have access to information and provide a blanket of security for the people against the enemies of state operating in the cybersphere as the main propaganda and recruitment enabler, is a very complex and abstract art of politics.

Considering Britain had a fair brutal and horrifying share of terrorist attacks in the past ten years, being paranoid is anytime much better than ‘getting wiser after the event’.

The organised 7 July 2005 London bus bombing near Tavistock Square and London Tube underground bombings at Edgware Rd station and King’s Cross-St Pancras station where 52 innocent people died and 700 others injured is forever resided as ghastly nightmare for Britons.

The back breaking challenge is to have the safeguard against the abuse of this law against ordinary people. In the information age where there are 1 billion smart phones and 1.5 billion Facebook accounts, it is very important that these tools are not misused for sinister purposes as well as preserving privacy and private information.

Philosophy fictional author prophecised this in his 1949 book ‘1984’.

Published in: on November 5, 2015 at 03:30  Leave a Comment