PRESS STATEMENT FOR IMMEDIATE RELEASE
Date: 1 August 2011
Transport Minister Lui Tuck Yew argues that the National Solidarity Party’s proposal for more competition in bus services would lead to “cherry-picking” of lucrative routes by multiple operators and hence be negative for commuters.
Lucrative routes are lucrative because demand is high, and more commuters are packed into each bus. “Cherry-picking” by multiple operators would mean more buses along these routes leading to shorter waiting times, less congestion in the buses and hence more comfortable rides, and more competitive pricing. With greater supply, these “lucrative” routes would become less lucrative. The “cherry” could swiftly turn into a “lemon”, forcing inefficient players out, and slowly turn into the common “apple”. Such is the magical fruit kingdom that boring people like me call the free market.
Meanwhile, the licence fee for the “lucrative” routes can be used to subsidize the operation of non-profitable routes, to ensure the continuation of these services.
Greater competition can lead to more differentiated services coming into the market to serve different levels of expectations. Only by better meeting the needs of the commuters can we persuade more of them to forego private cars and opt instead for public transport, thereby relieving the growing congestion on our roads. Public transport, with its higher passenger density, is a more energy efficient and hence greener mode of transport compared to private cars. Let us encourage its development in all the ways that we can.
It is disappointing to hear the same old reply from a different Minister. The political renewal that Singaporeans want to see is not just a younger Cabinet, but newer ideas and innovative approaches to problem solving.
Hazel Poa
Secretary-General
National Solidarity Party
For more information, please contact Hazel Poa
Email: hazelpoa@gmail.com
The issue not whether public transport be monopolized or open to competition. The bigger question is, should public goods be privatized or be subjected to market forces in the first place? Just have a look at the growing mess in public services like transport, housing & healthcare…
well said Hazel!
anyway, there’s a comment i found on an article in yahoo’s news that i found may be worth a second thought that is also somewhat relevant to your proposal, which i strongly applaud :
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GEN Y VOTE POWER 15 hours ago Report Abuse
Our Transport Ministry is so useless
I do not understand why do we pay the Transport Minister millions of dollars for his salary when he does not has any solution to solve the transportation problem. Whenever there are suggestions, he will not only not listen but will immediately shoot it down. This happened when WP suggested the nationalization of the transportation system and now when NSP proposed to issue more licences to interested transport operators. What solution does Mr. Lui has to resolve the transportation problem? Only let the two transport companies increase fare and hope that they will improve their service. When transport companies ask for fare increases, it should be justified by an improvement in their services. Did the two transport companies submitted any plans to show that they will improve their service when they apply for the transport fare hike.
Mr. Lui Tuck Yew mentioned that more competition within the public’s transport industry could have negative implications for commuters in the long term and “cherry-picking” of lucrative routes by multiple operators could result in commuters paying higher fares. This is because SBS Transit and SMRT — run a mix of profitable and loss-making routes which they are obliged to do so under their universal service obligations.
“There is a certain amount of cross-subsidy that is taking place from the profitable routes to the non-profitable routes… if you allow cherry-picking to the profitable routes — and certainly everybody who wants to run one or two buses will want to ply on those routes — then the challenge is what happens to the non-profitable routes?”
“And in the end, would commuters end up having to pay more overall?”
The contestability of bus routes “is a very complicated issue” he added, and its impact on fares has to be studied.
- Lui Tuck Yew
The point is that the Transport Ministry is the governing body. Is it that they have no control over the selection of routes. The Transport Ministry should in fact define the bus routes and then issue licenses to transport companies to operate the routes. The Transport MInistry should not allow cherry picking of the profitable routes. The Transport Ministry can set the conditions for fair play. Example, they could set a condition that out of five bus routes that a bus company runs, one must be of a non-profitable route. The Transport Ministry could also introduce incentives for bus companies that operates on the non-profitable routes. I am totally disappointed that our Transport Ministry is so helpless and useless.
With more competition, how can in the end, commuters would have to pay more overall? I really wonder whether the Minister get his logic right and did he study economics? Mr. Lui, you can tell children about your simple mushroom story but for Singaporeans who are now well educated, please do not fool us your simple and wrong logic. ”
cheers