Top govt salaries far behind private sector's

TOP private-sector salaries have surged ahead of those in the public sector and Prime Minister Lee Hsien Loong revealed last night just how far the pay of ministers and civil service leaders has fallen behind.

A minister should be drawing $2.2 million a year or more, according to benchmarks approved by Parliament in 1994 to ensure competitive salaries for a competent and honest government.

But their actual salaries have fallen to 55 per cent of the benchmark, that is $1.2 million, and 'we have to close this gap', Mr Lee said last night.

He did not say if ministers' pay will be raised fully to this amount, or when it will go up. Details of the salary changes across the civil service will be announced in Parliament on April 9 by Defence Minister Teo Chee Hean, who oversees the public service.

Speaking at the annual Administrative Service dinner, Mr Lee explained that salaries had to be reviewed so the public sector can keep its share of talented Singaporeans.

'This is an urgent problem. We have experienced on previous occasions the painful consequences of responding too slowly when the private sector surged ahead,' he said.

In the 1990s, this led to the Administrative Service, the key service from which most public sector leaders are drawn, losing entire cohorts of young and good officers.

Administrative Officers (AOs) in their early 30s are at a 'critical decision point' in their careers, and the Government must keep their salaries market competitive to retain the able ones.

Today, their salaries are in line with the private-sector benchmark created for this group. But with salaries for young professionals moving up, especially in the financial sector, Mr Lee expects salaries in this group to 'soon come under pressure'.

Fast-growing salaries explain why the Government has embarked on a review of civil service salaries covering all services where pay has fallen behind the private sector.

Also important is to review the salaries of ministers, judges and statutory appointment holders such as the Attorney-General and Auditor-General, said Mr Lee.

'It is even more critical for us to keep these salaries competitive, so as to be able to bring in a continuing flow of able and successful people to be ministers and judges.

'Unless there is a first-class political leadership and judiciary, the Civil Service, however capable and dedicated, will not be able to function properly,' he said.

Ministerial and top public sector salaries have been pegged to those of top private-sector earners since 1994, when Parliament debated and approved the use of benchmarks to ensure the public sector continued to attract its share of talent, and to provide for regular adjustments to keep pace with private-sector earnings.

There are two benchmarks or formulae spelling out how the salaries are to be pegged.

The first is the MR4 benchmark for ministers and senior permanent secretaries.

Yesterday, the Public Service Division released data on the median incomes of the top eight earners in the six professions to which MR4 salaries are pegged. Lawyers earned the most, with a median income among the top eight of $4.29 million.

The second benchmark is the SR9 benchmark for top AOs in their early 30s.

Mr Lee mapped out how in the years since 1994, the 'scramble for talent' has become a global phenomenon.

Talented Singaporeans are now being head-hunted by top global companies as well as by other governments keen to replicate the Singapore success story.

Top students are turning down government scholarships as their families or universities were willing to fund their education.

At the same time, the demands on high-quality governance have gone up, as a result of globalisation and a more advanced economy, he said.

With Singapore now operating near the 'leading edge' in public policy, public-sector leaders cannot rely on the best practices of other countries, but have to break new ground and find fresh solutions.

First-class people are therefore needed to anticipate problems, come up with creative solutions and lead teams.

He said 'first-class governance' which can be provided only by a top-grade public sector was a 'sustainable advantage' that Singapore should 'zealously uphold'.

While public officers must serve from a sense of idealism and duty and not be motivated mainly by financial reward, they should not be expected to make 'unreasonable financial sacrifices' to be in public service, he added.

lydia@sph.com.sg

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For recurring payment to cease, customer must instruct merchant to cancel billing arrangement: Citibank

We refer to Mr Vince Chan Kok Keong's letter, 'Bank can't stop direct debit arrangement' (Online forum, Feb 28).

We have since contacted Mr Chan to address his concerns and thank him for his feedback.

We would also like to take this opportunity to clarify certain points highlighted by Mr Chan for the benefit of customers who may encounter a similar situation.

In his letter, Mr Chan stated that he called up Citibank to terminate a direct debit arrangement he had made with a merchant and was informed that 'although Citibank has the right to approve or reject a direct debit application before any charging could be activated by a merchant, there is nothing it can do to stop the automatic charging after that'.

In line with industry practice, customers can authorise a merchant to charge a recurring payment such as utilities bills or charity donations to their credit card account.

The bank, on receiving the charge from the merchant, will facilitate the deduction after verifying that the customer's account details are in order.

Similarly, for a recurring payment to cease, the customer must instruct the same merchant to cancel the billing arrangement.

Customers who suspect that they have been charged for transactions that they did not authorise should contact the bank immediately, so that an investigation can be conducted.

To protect our customers against fraudulent transactions, we will also arrange to block their card account and issue them with a new credit card.

Customers who require assistance can contact our 24-Hour CitiPhone Banking hotline at (65) 6225-5225.

Adam Rahman

Corporate Affairs Director

Citibank Singapore Ltd

New kids Regent are new kings

REGENT Secondary may be the new kids on the block, but they look like they have been around for ages.

Regent, who opened their doors to their first batch of students only in 2000, have just completed their fairytale run in the West Zone table tennis B Division boys' competition.

On Monday, they were crowned the West Zone champions - beating defending champions Hwa Chong Institution (HCI) 3-2 no less.

To get to the final, Regent overcame three of the top four teams: Unity Secondary (4-1, group stage), Nan Hua Secondary (3-2, group stage) and River Valley High (3-0 in the semis).

Said a delighted Soon Bing Han, the Regent captain: 'It was really a surprise win.

'We never thought that we could beat Hwa Chong as they're one of the giants in schools table tennis.'

Regent have never made it past the group stages in previous zonal competitions.

Following the upset victory, they will compete in the Schools National competition for the first time.

Only the top four schools from each zone will advance to the Nationals.

Said teacher-in-charge Teo Hock Siong: 'This is the result of very hard work from the players and coach, as well as strong support from the school.

'Table tennis was identified in 2005 as having the potential to be developed into Regent's niche sport. Winning the zonal final shows that we are on the right track.'

What transformed the losers into champions?

Bing Han attributed their success to extra training, strong camaraderie and coach Li Zhoumin's valuable experience.

Li was China's national champion in the 1970s.

He was Malaysia's national coach from 1988 to 1992 and again from 1999 to 2005.

He said: 'Basics are very important and that's where they were weakest in when I first saw them.

'Training is now tougher for them. They train at least three times a week as compared to twice previously.

'They are also more disciplined, and even train during holidays.'

The coach also took advantage of the HCI players' weaker backhands, a strategy that proved crucial.

Having three China-born players - Chu Tianshu, Li Tianyu and Lu Hanjie - also helped.

He started coaching at Regent last year when Teo approached him for help. He and the teacher-in-charge are good friends.

Teo said team spirit was also a key to Regent's success.

He said: 'The team go for hikes at Bukit Timah Hill and MacRitchie Reservoir. There is a good rapport among them.'

Post-victory celebrations have been postponed as Regent gears up for Nationals, which begins at the end of this month.

Their target?

A top-eight finish.

hpeishan@sph.com.sg

Security guards there to protect residents from intruders, not be the nanny to residents

I refer to the letter, 'No harm done if security guards were to inform maid's employer if she goes out during odd hours' (Online forum, March 6).

I cannot agree with the author of the letter in suggesting that security guards play informants when they notice any 'unusual movement of maids'. Security guards are there to protect the residents from intruders - they are not there to be the nanny to residents.

In this case, it is the maid who has made 'unusual movements'. Where then do we draw the line? What if an 18-year-old is seen coming home at 4am on a Sunday morning after being out with friends? Should security personnel inform his/her parents as well?

At the end of the day, we must all be responsible for ourselves. In order to grow into a First World country, we need to stop being a nanny state and start taking responsibility for our own actions.

You can be sure that after this fall, even if the employers do not make it more difficult for her to leave the premises in the wee hours of the morning, she would have learnt that being locked out is not worth it.

Alvin Sim Khim Woon

London, United Kingdom

No need for tax returns for some employees, retirees

A GROUP of 45,000 people - many retirees - will find things a lot less taxing this year when it comes to dealing with the Inland Revenue Authority of Singapore (Iras).

Most won't even have to file a return at all while the rest will have to do so only if key financial details have changed in the past two years.

The people in the group have been singled out as part of a pilot scheme aimed at further streamlining the tax filing process.

The first segment comprises about 35,000 taxpayers receiving under $20,000 of dividends with no other source of income. About 75 per cent are over 50, according to Iras.

These people do not have to pay tax and usually get a refund as tax is deducted at source on dividends. But this year, they will not have to file a return in order to trigger that refund cheque.

Since Iras automatically gets details of all dividend income from the Central Depository, it will calculate the refund without needing the return. The cheques should be sent out by the end of July.

Life is going to get a bit easier for the other 10,000 people in the pilot group as well.

These have a straightforward tax position if they have met two criteria: salary data is already sent by their employers to the taxman and the reliefs they claim - for an aged parent, for example - have not changed for two years.

Again, Iras will calculate their tax without needing a return and send them a notice of assessment by June.

These taxpayers should log onto the Iras website to ensure the relevant information has been correctly pre-filed on their form. If their circumstances have changed - such as having another child - they will have to e-file by April 18.

The 45,000 taxpayers in the pilot run form about 3 per cent of Singapore's total taxpayer base of 1.4 million or so but Iras may extend the initiative after getting feedback.

In a bid to make e-filing even less onerous, Iras officers are fanning out to the heartlands to help taxpayers with online filing. Look for them at the Chong Pang, Bedok and Yew Tee community clubs where they will be at till April 18.

Hawkers at Tampines Street 11, the first food centre here with a wireless Internet connection, are also being encouraged to give e-filing a go.

Iras officers will train staff of the hawkers' association to help members with e-filing.

Iras said that all taxpayers should have received forms or letters and they can start e-filing. The deadline is April 18. Those submitting hard copy returns must post them by midnight on April 15.

sushyan@sph.com.sg



MAKING A START

The 45,000 taxpayers in the pilot run form about 3 per cent of Singapore's total taxpayer base of 1.4 million or so but Iras may extend the initiative after getting feedback.

TV times

CRICKET: ICC World Cup, warm-up match: India v Netherlands (Live, PPV Ch110, 10.30pm).

SOCCER: Uefa Champions League 1st rd knock-out, 2nd leg: Liverpool v Barcelona (Live, Ch23, tomorrow, 3am), Chelsea v Porto (Live, Ch24, tomorrow, 3.30am), Valencia v Inter Milan (Live, TV3, tomorrow, 3am. Delayed, Ch23, tomorrow, 6am).

Event

SOCCER: AFC Cup, preliminary rd: SAFFC v Mahindra United (Ind) (Choa Chu Kang Stadium, 7.30pm)

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South Korea delays full resumption of aid to North

SEOUL - SEOUL yesterday delayed a full resumption of aid shipments to Pyongyang until it shuts down its main atomic reactor under a nuclear disarmament pact reached last month.

The two sides have agreed at high-level talks to hold an economic cooperation meeting, aimed at addressing the aid issue, in late April - after the 60-day deadline for the North to close its reactor under the Feb 13 agreement, according to a joint statement.

The deal marked a rare victory for the South in fending off the North's demand that the economic talks be held this month. The dispute was the key sticking point at this week's negotiations, delaying the closing session by nearly five hours.

North Korea also reiterated its commitment to last month's nuclear deal. The two Koreas 'agreed to make joint efforts for a smooth implementation' of the nuclear agreement.

The South's chief negotiator, Unification Minister Lee Jae Joung, said he set the date for the economic meeting in the hope that 'everything will go smoothly', apparently referring to the nuclear pact.

Still, Mr Lee said Seoul is willing in principle to resume rice and fertiliser shipments to the North and indicated that Seoul may provide fertiliser before the North fulfils its nuclear obligations.

'Spring is early this year. I think the timing may be moved up,' Mr Lee told reporters, saying fertiliser should be provided in time so the North can use it during planting season.

The meeting in Pyongyang between the two Koreas was the first such Cabinet-level dialogue in seven months, fostered by the North's agreement last month with the US and four other countries to take initial steps towards abandoning its nuclear weapons programme.

South Korea has been one of the North's main aid sources since the two nations held their first and only leaders summit in 2000. This week's meetings were the 20th Cabinet-level talks since then.

But Seoul halted rice and fertiliser shipments to the North after the latter test-fired a series of missiles last July, and relations worsened following North Korea's Oct 9 underground nuclear test.

The provocations were the most serious challenge yet to South Korea's 'sunshine' policy of engaging its longtime foe.

On Friday, the two Koreas also agreed to conduct a long-delayed test run of trains on rebuilt tracks across their heavily armed border in the first half of the year. A planned test last year was called off by the North, whose military said appropriate security arrangements had not been made.

As expected, the North and South also agreed yesterday to resume reunions of families divided by the border, with meetings via a video link set for this month and face-to-face encounters in May.

The North put the reunions on hold last year after the South suspended aid.

Separately, North Korea's chief nuclear envoy, Mr Kim Kye Gwan, is visiting the United States to discuss the possibility of Washington and Pyongyang normalising ties.

North Korea will have similar discussions with Japan in Hanoi next week.

ASSOCIATED PRESS

S'pore-Malaysia trading link likely to be up only next year

THE trading link between the Singapore and Malaysia stock exchanges is likely to be established next year and not this year as planned.

But the bourses are looking at other ways to improve trading between the two markets, said Bursa Malaysia chief executive Yusli Mohamed Yusof yesterday.

He said at a press conference on Malaysia's economic outlook that 'the project is being held back as the Singapore and Malaysia exchanges are upgrading systems'.

Datuk Yusli said Bursa Malaysia expects to have its upgrading completed by the end of this year or early next year. So, the link 'won't happen this year. It will probably happen next year'.

The trading link has long been a discussion topic and he indicated last year that it could be up and running by this year.

The press conference, which comes ahead of next month's Invest Malaysia Conference, heard that the two exchanges are also discussing ways to make trading more efficient.

Bursa Malaysia is now looking to expand its product base by offering products in more than just the Malaysian ringgit and considering additional futures contracts.

Datuk Yusli said: 'We are improving our range of products, access to the market and introducing modernising technology.'

Mr Lim Chee Sing, who heads research at RHB Research Institute, which is a sponsor of the Invest Malaysia Conference along with Swiss bank UBS, said there was a 'confluence of positive factors' in Malaysia.

He cited an appreciating currency, growing demand in the property and construction sector, as well as a recovering agricultural industry with palm oil and rubber prices on the way up.

The recent earnings season saw good corporate results while pro-active policies from the Malaysian government are set to encourage more foreign investment. Government companies are also restructuring to become more efficient.

Stock market liquidity is strong, with the daily value of trades averaging almost RM3 billion (S$1.3 billion), nearly three times last year's average, according to Datuk Yusli.

The Invest Malaysia Conference will also discuss how Malaysia can be positioned better as an Islamic financial hub.

Int'l Capital makes reverse takeover deal

INTERNATIONAL Capital Investment - formerly Jurong Engineering - is about to get a new lease of life by buying the Akira electronics business.

The firm's shares have been suspended since Dec 1, 2005 after it sold off its engineering and construction business.

It had a year to find a new core business or risk being delisted but the firm won an extension from the Singapore Exchange (SGX) that was to end today.

In a timely announcement, it said last night that it plans to do a reverse takeover by buying the consumer electronics arm of mainboard-listed TT International, which comes under the Akira brand name.

Separately TT International also trades and distributes branded consumer electronics products.

International Capital will buy the rights to design, manufacture and distribute products under the Akira brand.

It will issue new shares worth about $90 million to TT International to pay for the deal.

International Capital has also applied to the SGX for a further six-month extension to present its proposal for relisting its shares.

Businessman Oei Hong Leong owns about 76 per cent of International Capital but if the deal is successful, TT International will become the firm's largest shareholder.

LEE SU SHYAN

High fuel costs and lower freight rates halve NOL's gains

NEPTUNE Orient Lines (NOL) has suffered a 55 per cent plunge in full-year profit to US$363.7 million (S$556 million), as it clocked in a weaker-than-expected fourth quarter.

Higher fuel costs and lower freight rates continued to sink the carrier's bottom line, with fourth-quarter earnings diving 70 per cent to US$49.4 million, far lower than the US$72 million median forecast by a Bloomberg News poll of eight analysts.

But the shipping line is accelerating expansion plans for its fleet and port facilities amid improving market sentiment.

NOL's latest initiative, announced yesterday, will see it team up with Chinese shipping line SITC Group to develop a terminal in Qingdao, China's third- busiest container port.

'NOL delivered a solid performance in 2006 in the face of a difficult operating environment,' said chief executive Thomas Held, who was chairing his first results press conference at NOL.

'Our results show the combined impact of lower average freight rates and increased fuel costs over the past year.'

Dr Held, who joined NOL last November, said the Singapore firm had performed better than many of its rivals, which have also reported lower profits for last year.

The container shipping industry has been struggling with oversupply fears since last year, as record shipping earnings in previous years spurred a strong expansion of the global fleet.

This has sent freight rates falling as carriers jostle to keep their ships filled and maintain market share.

NOL is a case in point, with revenues flat at US$7.26 billion last year despite the carrier moving 8 per cent more boxes.

Competitive pricing pressures and changes in volume mix led to a 7 per cent fall in average revenues per container.

The bottom line was further hit by higher fuel prices, which raised total fuel costs for its liner business by US$237 million.

NOL said most industry analysts expect the container shipping market to remain in oversupply and fuel prices are also expected to stay high.

But Mr Ron Widdows, who heads NOL's liner business, noted that sentiment is improving, with freight rates rebounding on Asia-Europe routes.

He added that trade growth has also been outpacing the best of estimates in previous years, indicating a potential upside for shipping companies. But he stopped short of predicting a rate recovery in Trans-Pacific services, the biggest contributor to NOL's liner sales.

NOL will increase spending on ships and other capital equipment this year to US$729 million, from US$178 million.

It will add seven ships to its fleet this year, boosting capacity by 10 per cent. It is also expanding some of its ports in the region. The new Qingdao terminal will cost a few hundred million US dollars, said Mr Widdows.

Full-year earnings per share were 25 US cents, down from 55.35 US cents the previous year. Net asset value per share was US$1.45, down from US$1.79. A final dividend of four cents per share has been recommended.

NOL shares fell 14 cents to close at $3.10 yesterday, ahead of the results announcement. The decline came amid the worst marketwide fall in eight months.

bryanlee@sph.com.sg

Terry's fine, Blues relieved

LONDON - JOHN Terry has been given the all-clear after being kicked in the head during Sunday's 2-1 League Cup final win over Arsenal.

The Chelsea captain made a remarkable return to the Millennium Stadium - less than two hours after being rushed to hospital following the horrific accidental kick.

The England captain was knocked unconscious by Arsenal midfielder Abou Diaby's high kick as he tried to head the ball in the Gunners' penalty area in the 56th minute.

He fell awkwardly, landing flat on his face, and players of both teams beckoned for urgent medical attention.

It was reported that he had swallowed his tongue, and was seen being given oxygen as he was treated on the pitch.

Terry had made a remarkable recovery to play in Cardiff.

He had suffered an ankle injury while on Champions League duty in midweek and had been expected to miss the final.

But he played and was in the thick of action - until the 56th minute.

Lying unconscious on the ground, he needed several minutes' attention from the physiotherapists of both clubs. He was eventually put in a neck brace and carried off on a stretcher.

The defender regained consciousness in the dressing room but was groggy. He was then taken to a hospital for scans on his head and neck.

But, two hours later, he returned to the stadium - still in his kit - to join his celebrating teammates.

And he showed no ill effects as he hugged Arsenal and England physiotherapist Gary Lewin.

However, Chelsea manager Jose Mourinho admitted that thoughts of the horrific skull fracture Petr Cech suffered at Reading flashed through his mind for a few moments when he saw his captain go down.

In the same match, replacement goalkeeper Carlo Cudicini also suffered a head injury.

Said Mourinho: 'Sometimes in football, dramatic things happen.

'This season, we have already had the situations with Petr Cech and Carlo Cudicini and the negative thoughts come directly to your mind.

'The first point is, 'Is he safe? Is the man fine?'

'John's wife, his little babies, are here, so the most important thing is that the man is safe.

'Once we know he is okay, then we can think about the football.'

Although he did not see what happened, he apportioned no blame to Diaby, who was in tears as Terry was put on a stretcher.

Ironically, Diaby kicked the defender with such force that he jarred an ankle and was eventually substituted.

He is expected to miss Arsenal's FA Cup fifth-round replay against Blackburn tomorrow.

'John risked himself and the Arsenal player was trying to protect his goal,' said Mourinho. 'I have no criticism about that.'

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SINGAPOREANS will be able to sound off about tomorrow's Budget in a special online webchat on Friday. If you have a gripe, a question or glowing praise, you can share it all with your fellow Singaporeans and a special panel that... [Read more]

Tottenham's attacking policy pays off with last-gasp winner

LONDON - MARTIN Jol will stay true to Tottenham's attacking traditions, after his side's cavalier approach clinched a dramatic win at Everton.

Spurs tasted success in the English Premiership for the first time since Boxing Day, as Jermaine Jenas' last-minute goal gave them a 2-1 victory on Wednesday.

The Goodison Park triumph was just Tottenham's second away win in the league this season.

A streak of six league games without a win and a League Cup semi-final exit against Arsenal had put Jol under pressure.

This win, coming just four days after an FA Cup fifth-round success at Fulham, lifted the gloom around White Hart Lane.

Jol believes Jenas, Aaron Lennon, Dimitar Berbatov and Robbie Keane need to be let off the leash, if Tottenham are to enjoy a successful end to the season.

The London club have a long-standing reputation for attacking football.

Jol said: 'In the first half, we were excellent. We took control of the game.

'It was not quite the same after the break. But they only worried us with the long ball and long throws.

'We decided to go for it, to put on attacking players. I was very pleased that it was us, the away side, going for the victory in those closing stages.'

Berbatov gave Tottenham the lead in the 35th minute.

Mikel Arteta equalised with a free kick given by referee Uriah Rennie, even though the assistant referee had signalled for a free kick to Spurs. Jenas then snatched the points for the London side.

Everton manager David Moyes came in for some criticism at full-time, as angry fans vented their frustrations over his substitutions.

The Goodison faithful felt he was wrong to take off Portuguese midfielder Manuel Fernandes. Jenas' late strike only confirmed their fears.

But Moyes defended his decision.

He said: 'Sometimes, you make decisions that work, sometimes, they don't.

'We felt we had to take off Manuel Fernandes towards the end, even though he had been a threat, because he was tiring.

'We also took off striker Victor Anichebe at the break, and sent on Gary Naysmith in midfield because we had been outplayed in that first half.

'We had to take a brave decision and, in many ways, it worked. We were the better side after the break and created chances. It was a real blow to lose it like that.

'I understand the fans' frustrations. No one is more frustrated than me.

'But I felt we were more likely to win it in the closing minutes than them.'

AGENCE FRANCE-PRESSE

Hammers chairman backs Curbishley '100 per cent'

LONDON - WEST Ham chairman Eggert Magnusson has given his '100 per cent backing' to manager Alan Curbishley, insisting there is no deadline for him to turn the club's fortunes around.

The Icelandic businessman has been infuriated by reports that he has given Curbishley three matches to get the Hammers back on the winning track.

West Ham have won only once in 10 Premiership games since Curbishley replaced Alan Pardew as manager.

But Magnusson is adamant he has the right man for the job, reported The Daily Mail.

He said: 'To put the record straight, Alan has my 100 per cent backing.

'He has had it since day one and he has it going forward. He is the right man for this job, and he will take us through this difficult stage.

'Talk of a three-game deadline is nonsense, I hope that Alan is here for the long-term.'

Magnusson, who celebrated his 60th birthday yesterday, insists his ties with Curbishley have been strengthened by working together during the January transfer window.

He added: 'We spent a lot of time with my deputy Scott Duxbury - often until very late in the evening - sitting together and working out our plans.

'It was a learning experience for me, and I feel it made our ties that much stronger.

'I have experienced that life is not always easy. There are always difficulties to overcome, but the only way to get past them is to fight to turn them into advantages.

'That is how I have directed my life and that is what we will do at West Ham.'

Magnusson has, however, slammed Pardew, claiming there was dressing-room unrest while he was in charge.

He sacked Pardew in December after a disastrous run.

He will come face-to-face with Pardew on Saturday, as West Ham travel to Charlton for a crucial relegation battle.

The Icelander has already stoked the fires ahead of the clash by suggesting Pardew had lost the dressing room at West Ham.

'There was no purpose to talk about it publicly at the time,' Magnusson told the News of the World.

'But the key factor was that something was just not right in the dressing room.

'Tension had been building between the players and the manager for a while.

'There was a cancer we had to cut off.'

Porto the real test for Chelsea

LISBON - CHELSEA'S recent revival faces its first real test today, when the English champions take on their Portuguese counterparts, FC Porto, in the Champions League.

The English club's manager, Jose Mourinho, has likened the match to a final.

He said: 'This week, we have two finals. Porto is like a final, and the one against Arsenal is really a final.'

Chelsea play Arsenal in the League Cup final on Sunday.

But, before that, Mourinho returns to the club he guided to the 2003 Uefa Cup and 2004 Champions League triumphs.

He brings with him a squad that has put together a run of six successive wins without conceding a goal since they were beaten 0-2 by Liverpool at Anfield at the end of last month.

On the back of those performances, the manager has done his best to foster a sense that his men have gone through their sticky patch and emerged unscathed.

It is a belief which, he claimed, led him to rest Claude Makelele and Ricardo Carvalho for last Saturday's FA Cup tie with Norwich.

'Because the team are in a good moment, winning matches, confidence back, I thought I could give some players a rest,' he nonchalantly explained, after watching his side win 4-0.

Closer scrutiny of the winning sequence, however, suggests that the 'business as usual' rhetoric, if not total bluster, could yet prove to be premature.

Three of the six victories were recorded against lower- league opposition - Nottingham Forest and Norwich in the FA Cup and Wycombe in the League Cup.

Middlesbrough and Blackburn were outclassed in league matches at Stamford Bridge.

However, the scrappy 1-0 win at relegation-threatened Charlton will have been accorded equal significance by the rest of Europe's elite.

Unlike Charlton, Porto are a side in form.

A 4-0 hammering of Naval last Friday allowed them to pull four points clear at the top of the Portuguese top flight.

And, as Mourinho knows only too well, the Estadio do Dragao is an intimidating venue, where English clubs have not prospered in recent seasons.

Manchester United's 1-2 loss there in the second round in 2004 was arguably the key match in Porto's successful campaign that season.

Mourinho himself suffered defeat by the same margin, when he took Chelsea there in the group stages the following season, his first in London.

Arsenal fared only marginally better this season, registering a goalless draw in December to ensure that both sides progressed to the knockout stage.

Mourinho and his former Porto players, Carvalho and Paulo Ferreira, might be hoping that some of the animosity associated with their departure has dissipated.

The manager, however, is resigned to the fact that for a section of the Porto supporters, his decision to move on to a new challenge will never be one they can understand or accept.

'Those people will give me some nice songs like sometimes I have in England,' he said.

'That's part of the job. I know the job I did there, I know the history I did in that club and not even whistles or boos can delete the history.'

Chelsea will be encouraged by the return of Michael Ballack from the thigh injury he suffered on international duty earlier in the month.

Mourinho will have to reshuffle his defence once more, having lost Khalid Boulahrouz for several weeks with a dislocated shoulder.

'The message I want to give to my players is that they have to be more worried about us than we are about them,' he said.

Porto welcome back winger Ricardo Quaresma from a two-match ban.

Coach Jesualdo Ferreira is set to revert to a 4-3-3 formation, with Argentinian strikers Lucho Gonzalez and Lisandro Lopez looking to profit from Quaresma's crossing ability.

AGENCE FRANCE-PRESSE

FC Porto v Chelsea
Live, Ch24, tomorrow, 3.30am

US housing starts hit 10-year low

WASHINGTON - HOME builders in the United States started work on the fewest number of new houses since August 1997 as a glut of unsold homes discouraged new projects.

Housing starts slumped 14.3 per cent to an annual pace of 1.408 million, less than forecast and down from December's 1.643 million rate, the US Commerce Department said yesterday. Building permits declined 2.8 per cent to a 1.568 million pace.

The figures show that even as sales rebounded, residential construction will remain a drag on the economy until the inventory of unsold homes declines.

Federal Reserve chairman Ben Bernanke told lawmakers this week that the process may extend through much of the year.

'Housing inventories are still beyond bloated, and starts aren't going to recover in any meaningful way until those inventories come down,' said chief economist Chris Low at FTN Financial. 'I would be cautious about calling an end to the housing slump just yet.'

Forecasts of starts ranged from 1.5 million to 1.72 million. Permits were expected to drop to 1.59 million, according to the median estimate.

Construction of single-family homes dropped 11.2 per cent last month to a 1.108 million rate, also the weakest since August 1997, yesterday's report showed. Work on multi-family homes, such as townhouses and apartment buildings, declined 24.1 per cent to an annual rate of 300,000.

Construction in the West fell 28.5 per cent to an annual rate of 301,000 last month, the slowest since December 1996. The decline in the West from December was the biggest since January 1979.

Starts also dropped 15.2 per cent in the Mid-west to a 195,000 pace, the weakest since January 1991, and decreased 11.8 per cent in the South to 716,000. Beginning construction in the North-east rose 8.9 per cent.

The number of homes under construction fell 2.4 per cent in January to a 1.218 million pace, yesterday's report showed. Housing completions declined 1.2 per cent to an annual rate of 1.88 million.

The number of housing units authorised, but not yet started, increased 2.9 per cent to 194,400.

BLOOMBERG NEWS

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