Sunday, 5 April 2015

Singapore: The Great Train and Bus Robbery

The Great Singapore Train & Bus Robbery 2015
And it’s perfectly Legal!


Commuters today hardly notice that they have been “robbed”. Each bus and MRT train trip will merely add 2 - 5 cents depending on distance.  Overall, public transport fares increase by about 2.8% from today, in accordance with the Public Transport Council (PTC) decision made on January.   

It has been argued and evident by facts and statistics that the public transport fare hikes for 2015 have no compelling rationale and basis. The PTO did not produce any justifications as to current or impending profits reduction; they could not because they actually enjoy windfall profits due to unprecedented oil price drop last year.   

About $48 million will be taken from commuters over the next 12 months to feed highly profitable public transport operators (PTO) in 2015 and part of 2016. Serious public trust issues are raised but never fully addressed.

The generosity of commuters in acquiescing to the fare hikes, though few in fact have any alternative transport choices, will deliver the whooping additional $48.5m in revenue to the two public transport operators - SBS Transit and SMRT.  Never mind that they will have to contribute $5.5 million and $8 million respectively to the Public Transport Fund (PTF), from which $7.5 million from the Fund would provide 250,000 vouchers of $30 each to low-income households (one-time), which act merely to postpone but did not eliminating its impact on the lowest of the low-income earners. These vouchers basically returned their PTF contributions to the PTO to retain net-neutral revenue impact

For SBS Transit, this $5.5 million represents about 25 per cent of the additional fare revenue, while for SMRT, the $8 million they are setting aside accounts for about 30 per cent.

As predicted, commuters hardly feel the mosquito-bite pinch of the transport fare hikes today.  My son reminds me that it amounts to about $2-$4 per month for regular commuters, or nearly $25-$50 per year, for no assurance of improvements in the prevalent poor customer services.  The only clear purpose of the public transport fare hikes is profiteering by the PTO.  

Singaporeans must be protected from the unequal powers of monopolistic – in the case of public transport, duopolistic – companies in the marketplace.  Every economic student knows that monopolistic and duopolistic companies are the most inefficient with respect to resource use in their operations. They furthermore generate huge profits from the captive marketplace in such disproportion to the privilege of providing a needed social service.

Both PTO have announced dividends for their private share-holders from their windfall profits. Their shares are expected to out-perform the stock market.  Currently, the shares of both PTO are the darlings of the Singapore Stock Exchange, even before the fare hikes!

Public transport commuters, mostly for middle and lower income households, have few affordable transport alternatives.   Where is the social justice when private companies are allowed to derive huge windfall profits from operating with assets largely invested by the Government ie people of Singapore? 

Granted, when considered in the totality of its entire assets, which include the transport infrastructure invested by past generations of Singaporeans, no strictly private and profit-oriented company could be profitable under the normal circumstances.  So, why are the PTO  profit-driven instead of guardians of social investments and public assets?  Why are they allowed to skim from the commuters a few cents here and there even though they are already highly profitable? It is because they can do so with impunity, to “rob” commuters in broad daylight and night, and to get away with it because it is NOT a crime.  It is in fact criminal to simply take from the less and lower income, basically the weak and vulnerable people, in order to enrich oneself.  In this instance, and every day for the next 12 months, day or night, when you board a public bus or MRT train, you will be “legally” robbed. 


Public transports should be managed by more socially responsible National PTOs beyond the current obsessive profit-seeker types of companies. We need Public Transport Social Enterprises, like NTUC Income and Fairprice, that have embedded social responsibility values into its leadership and management. 


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