FOR IMMEDIATE RELEASE
Date: 26 Jul 2011
There has been much debate over our public transport system lately. Public unhappiness over fare increases stems from dissatisfaction over the level of service in our public transport, primarily over issues of under-capacity and the lack of any alternatives for the bulk of our population.
The Workers’ Party proposes the nationalization of public transport. The People’s Action Party on the other hand advocates the status-quo. But it should be apparent that the status-quo is not working. The PAP needs to snap out of its complacency.
The WP’s proposal to nationalize public transport however would not solve the problem of under-capacity. It is unrealistic to expect state-run organizations, usually large and cumbersome, to be able to respond speedily to rapid changes in demand. We need only look at our public housing, public hospitals and polyclinics which are similarly plagued by under-supply to realize that.
What is needed then is more competition. Theoretically, we have two companies “competing” against each other in bus and MRT services. However, since there is no duplication in their area of service, commuters have no real alternatives. Thus we effectively have two monopolies.
First, we need to consider bus services and MRT services separately.
MRT Services
It is not practical to expect full privatization and competition in MRT services due to the infrastructure and huge capital required.
But partial competition can be introduced. The government can retain ownership of the major fixed assets – tracks, stations and trains – and sub-contract out the operations to private companies via tender. SMRT and SBS Transit should not have certainty of operating rights, but rather would have to tender for the rights at regular intervals, in competition with each other and with other companies that may be set up by former employees or foreign operators. Each line (North-South, East-West, North-East, Circle, Downtown, various LRTs) can be tendered out separately or bundled. Tenders will be awarded based on service levels and cost. The Government charges fares at a level sufficient to pay the sub-contractors.
Unfortunately, while this arrangement provides incentives for efficiency and cost control, capacity would still be determined by the Government and hence cannot be as responsive as private operators. It is an inherent weakness of the MRT system that capacity cannot be increased rapidly. We therefore need to rely on our bus services to be more responsive.
Bus Services
Bus services should be liberalized. We need multiple private bus operators who are smaller, nimbler and profit-seeking, and who will respond faster to changes in demand. If demand increases rapidly, profit-seeking entities will eagerly increase supply just as rapidly. Slow movers will lose market share.
Routes should be centrally managed by a transport authority, and every private operator, regardless of size, should be free to apply for licenses to ply any of the routes, making their decisions based on business considerations. Operators will either ply existing established routes or propose new ones to the transport authority. Bus services may also duplicate MRT routes to provide indirect competition to MRT services, and to meet demand in excess of MRT capacity. Capacity in bus services can be expanded far more rapidly than that of MRT services.
Let market forces determine the supply and set the fares. The government’s role in bus services should be limited to:
- setting the standards for safety and service,
- managing routes,
- disseminating information on bus routes and ridership numbers,
- gathering commuter feedback, and
- licensing.
In addition, the Government should fulfill its social responsibilities by providing the necessary infrastructure and subsidies for non-profitable but essential routes (which can be funded by bus licensing fees), full-time students, elderly and disabled, and low-income earners and families.
With this model, we can move towards a more responsive transportation sector driven by market forces, with the incentives to innovate and cut costs, while meeting our social obligation of ensuring affordability for those with lower incomes.
Hazel Poa
Secretary-General
National Solidarity Party
Nice idea, though I think PAP will not accept it.
Just like how HDB estates are managed, the fixed assets are state owned, from MRT stations to tracks and depots. Trains are transferable assets, which will be transfered and maintained by companies who has won the tender to operate the MRT lines. Fares for different lines will vary as per different companies operating it. This will provide competition pricing and prompt services.
Each contracts runs for a few years, which then will be reviewed, and tenders to be called again should the current operators fail to meet the standards required.
This should also be introduced to the bus systems. This will ensure that the transport system works for the nation, and not the other way round!!
Privatization of bus services could be a good alternative. But related variables should also be carefully considered such as : the possible increase in the quantity in buses plying our roads subsequently along with possible redundancies and the resultant possible increase in traffic congestion in our streets. I am not sure if ERP applies to bus services, and if they do, this should be scrapped.
ERP does apply to bus services currently.
This suggestion is detailed and makes alot of sense. The only problem is that it will not bring money into the govt coffers.
you have my respect, one that the rulling party have lost on various counts.
What I see is: Gov, WP and NSP are all providing part of the answer to today’s public transport woes.
There is a capacity issue on the road and rail – There is just so much road space, and so much train anyone can put into the system. We are experiencing the problem of bad infrastructure planning over the past 10~15 years when someone just decided (suddenly) to push the population size to 6.5million. Current housing price problem was just another symptom of badly managed domestic affairs.
Further liberalization may be fundamentally a good suggestion while we also need to realize that it’s just part of possible solutions.
Why? While rail-system take many years to build, and it’s only competition may be brought by bus route which ply the same, that doesn’t mean that service provider of buses have lesser issues….
Space – where are the new bus-service provider which provides competitions store or park their buses? And if the gov is charging these providers with high land and leasing costs, road tax, GST etc. than hardly any new provider may survive with razor thin margin.
The main question is: Is the gov willing to cut return or revenue collection from these public service providers which indirectly an added cost to the fare pricing structure which was bear by the commuters?
It’s easy to say added competitors and let market decides. We should not forget the fixed cost element which was buried in the financial statements and turned almost invisible to everyone who look at issue on the surface.
It’s reasonable for gov to charge for land use. But, it is morally wrong to charge at market value for public services. While we offer foreign direct investments preferential land prices years after years, did the gov does the same for those who offer public services?
Or public services is just so convenient for milking.
Oh, another thing, the design of our current train is really lousy.
Comparing Hong Kong…
For the similar train carriage, our MRT train have 4 doors while Hong Kong MTR have 5 doors. Hong Kong MTR allows quicker flow of human traffic in and out of the train so that the train can leave faster out of the station. In comparison, our MRT do not have significantly higher number of seats. Therefore I do not see how more doors may compromise the seats amount. These days, we even have carriage without seats just to pack more people. I don’t see that in Hong Kong MTR.
I hope to see the new lines introduce train carriage with one more door. This is important as the number of station platform doors will be also be affected. A bad design to save initial cost will cost more money in the future when redesign affects many invested infrastructures.
And our rail system has too much stations too close to one another. Before the train can travel at max efficiency in speed, it has to stop for the next station. This is the limitation we are currently suffering causing problem when MRT is adding more trips or frequencies. We are not traveling any faster. This problem will stay almost forever.
1) The NSP is right that the government owns MRT tracks, stations and trains and only tenders out operations. I point out that the governmen’s “unprofitable route” argument against nationalisation does not fly with the MRT. The government can nationalise line operations and increase train frequency until such point that crowding standards are acceptable. This is straightforward in theory and feasible in practice. I hope that tenders for PTO operations will not be renewed.
2) Doing the above and forcing PTOs off the MRT market, in which they have failed, may force them to up their game in the bus market to restore their former levels of earnings.
I don’t think you fellas understand. Privatisation is an excuse to DISPOSSESS the people. From telephony, to transportation, to utilities, to land, to housing, etc. You are dispossessed ! You have nothing, Singaporeans. But, NS for you ! You people are cheap security guards, face it !
I suggest that the Committee or Government look into making travelling by taxis affordable during peak hours into CBD areas. For example, since SBS Transit and TIBS buses do not have to pay ERP, can its taxixs also not be paying ERP when entering the zones? And that taxis that go into CBD areas during peak hours must be filled to capacity, i.e. maximum 4 passengers, unless on advance booking. This can be done by building special taxi-stands near main-roads where commuters going to CBD areas queue-up and hop-on the cab that comes along, which will bring them to CBD areas. While in CBD, there must be a common alighting point too. Commuters must be willing to hop-on with strangers too.
Since land transport cannot stop the problem of over-crowding, can sea transport help out? Say get Penguin ferry operator to work-out the sea route and pick-up passengers from certain jetties or reserviors and send them to Raffles Place?
I don’t know how much the top CEO or Directors are being paid at the SMRT, but they certainly do not need to pay a top mgt more than 200K a year, afterall they don’t have any better ideas to provide better solution for the public transport woos in Singapore. Therefore, by cutting costs is the best way of solving the inflation woos.
See what happen in Greece, Spain and Ireland? They all have to learn how to live with costs cutting. The next will be USA. So we better start sooner somewhere.
The SMRT company to cut costs by
1) removing unnecessary expensive top management head count.
2) reducing the salary for the top management
3) removing the undeserved Performance Bonus.
Why should the public pay for their Performance Bonus as part of the transport fee if they cannot perform to provide a good transportation services for the commuters (crowded, arrival not in time, poor frequency, etc etc)?