Nationalising rail network first step to resolving woes

I concur with Professor Kishore Mahbubani that the public transport system should be managed by the Government instead of private operators ("'Let Govt manage public transport'"; last Friday).

Critics of nationalising our rail system often claim that it will lead to a loss of competition and create a rail monopoly, which hurts consumers.

However, our current rail system - a duopoly - has little or no competition. In essence, Singapore's rail system has developed into an oligopoly, and the high cost of operating rail networks has made it impossible for other competitors to join the market.

Others might argue that Singapore should emulate Hong Kong's model. But there are significant structural differences between how the Mass Transit Railway (MTR) and our rail network operate, and the MTR model is not entirely applicable to Singapore.

For one thing, the MTR is a monopoly, not a duopoly, and monopolies have proven to be easier to regulate than duopolies. Also, unlike in Singapore where taxpayers fund the construction of new rail lines, the MTR takes on the financial burden.

Real competition can occur only when there are low barriers for new competitors to enter, and the Government plays an important role in facilitating this.

The Government should nationalise the train networks and leave the buses to the free hands of the market.

Bus services are much cheaper to operate than train services and operators do not have to invest in developing costly infrastructure. The bus contracting model is a good step in this direction ("First bus tender draws 11 bidders"; Jan 20).

Ultimately, there is no easy solution, and nationalising the rail network is no panacea.

But it is a necessary first step to put an end to the system of unfair competition that is treading a path of mediocrity and embarrassment for Singapore.

Terence Tan Wei Jie

A version of this article appeared in the print edition of The Straits Times on November 02, 2015, with the headline 'Nationalising rail network first step to resolving woes'. Print Edition | Subscribe