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Transport debate needs end point

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By Tan Bah Bah

The way I see it, mass public transport is just a station or two away from being nationalised. Perhaps that ought to be the de facto goal at the end of a journey of adjustments which started in the 1960s. The latest recommendations of the Fare Review Mechanism Committee represent a major change of policy in that direction.

mrt station

After enduring years of an unreliable system which saw frequent bus breakdowns and losses, the government tried to improve the situation by allowing only three companies to operate. That experiment was not a success and was replaced by the establishment of a solo company, Singapore Bus Service (predecessor of SBS Transit).

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This was when the saga of getting the travelling public to accept fare hikes really began. Every announcement of a hike was met with public outcry and became a major PR exercise – whether it was five cents or 20 cents. Especially when the government was determined that the company be allowed to maintain its shareholders’ dividends.

In the years when the profits seemed inordinately high, any substantial fare increase was slammed as unfair and unjustifiable. The lack of any kind of competition made matters worse.

The obvious and most frequently asked questions were: Must commuters be at the mercy of a monopoly? Why should shareholders be enjoying profits while commuters had to bear the fare hikes? Travel is an economic activity. Why is the government not subsidising it? Why is the government not subsidising the poor?

The first question on the monopolistic situation was answered in 1983 with the formation of Trans-Island Bus Services. The MRT offered another source of competition.

The other questions are now being addressed by the FRMC recommendations.

Transport operators – bus and train – will have to be run on a commercial basis for them to be viable companies able to give fair dividends to their existing shareholders and to attract future investors.

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Injecting an energy component in the automatic calculation of fare adjustments should help operators cope with an increasing operational bill.

The FRMC said energy cost has “increased disproportionately more than other costs”. As a proportion, SBS Transit’s fuel cost went up from 18 per cent in 2005 to 24 per cent in 2011. SMRT’s cost shot up from 13 per cent in 2005 to 22 per cent in 2011.

To emphasise that the transport operators have a social role to play besides running an efficient and profitable company, the FRMC wants them to contribute 20 to 50 per cent of each fare adjustment to vouchers for the neediest families.

That I would consider a super PR gesture which should silence many critics. I hope the government will accept this recommendation because our transport operators have been having a horrid time with the media because of frequent breakdowns, infrequencies of certain services and the less than satisfactory performance of one of its former CEOs.

Reinforcing this public service principle is vital for the operators’ raison d’etre and long-term relationship with the community.

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Equally, if not more, important is the recommendation that the government subsidises the bus and train fares of lower income workers and the disabled.

Transport Minister Lui Tuck Yew has already indicated that he is generally in favour of the government funding the proposed new concession schemes for the disadvantaged.

The FRMC noted that reduced expenses for low-income workers would allow them to take up jobs farther from their homes. And as public transport is a social good, concessions for the disabled should be inclusive as far as possible.

Such concessions or subsidies mean the government is finally being persuaded that public transport is a necessity which should not become a luxury for our less privileged citizens.

Bear in mind that bus and train fares are not going down. They are just being adjusted in a formula tweaked to help the second poorest income group and a wider pool of students.

In the end, will the adjustments be enough? Or just the opposite, will we need a reversal to another monopoly should the services be nationalised, if it is accepted as an article of faith that public transport should be fully subsidised?

The ultimate test of a public transport system is getting the largest number of people to use it – an almost do-or-die aim on this island which can accommodate cars and other vehicles only up to a point.

Public transport changes

Mr Magnus said: “In terms of new concessions, we thought that it would be reasonable for government to take responsibility for the new concessions framework.

“This would apply to your LIWs (low-income workers) and PWDs (persons with disabilities), and that’s quite a large size of population, about 500,000.”

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