News analysis

Rail nationalisation? Govt may simply be reclaiming its engineers

Move to form LTA team that can take on MRT operations may be an effort to boost regulator's technical expertise

Is Transport Minister Khaw Boon Wan's latest proposal another step towards nationalising Singapore's public transport system?

Yesterday, he said that he had asked the Land Transport Authority (LTA) to form an engineering team that "is able to take on operations and maintenance" of an MRT line. If and when the Government decides to have one entity designing, building, operating and maintaining a line, the LTA would be ready.

Experts say the answer is "no" - they do not think nationalisation is on the cards.

Dr Walter Theseira, an economist at SIM University, said: "I don't think we are heading towards full nationalisation in the sense of all rail employees becoming public servants. I believe the Government would still very much prefer to have the bulk of operations, logistics and maintenance done on a long-term contract basis.

"But the ability to step in and lead such operations in case the contractor fails is what the Government is pushing towards."

After all, "if an operator fails, it becomes the public's problem", he said.

For example, should an operator become insolvent, there might be no recourse but to pump additional funds into the operator or to pay - at high cost - for a competitor to take over on an emergency basis.

 

But if the Government had its own engineering expertise, "it might be possible to take over operations" until a replacement is found through a proper tender, which takes time.

Dr Theseira reckons something similar to the government bus contracting model might be applied to the rail industry.

Already, the Ministry of Transport and SMRT Corp are in advanced talks about the Government assuming ownership of all operating assets. In this new rail financing framework, rail operators will - like bus operators - focus entirely on meeting service standards without being saddled with heavy capital expenditures.

The two sides have been in talks for more than two years now. Analysts believe that they will make an announcement in the first quarter of next year.

Meanwhile, the LTA will soon start embedding its own engineers into the two rail operators.

Mr Khaw said they would "augment the SMRT and SBST maintenance crews now", and pick up valuable on-the-job experience.

Some see the move as the Government's way of keeping a closer eye on the operators as well as keeping them on their toes.

But Dr Theseira believes Mr Khaw merely wants the LTA to bolster its engineering capabilities.

"There has been concern for some time among policymakers that the Government lacks sufficient in-house engineering and technical expertise to fully oversee aspects of public transport," he said. "I have heard that concern mentioned previously, particularly over the lack of middle-level engineering talent."

Asked about Mr Khaw's move, transport systems consultant Bruno Wildermuth, who was involved in the building of the first MRT line here, said that "we are coming full circle".

SMRT was previously part of the government-run MRTC, which built the first North-South, East-West lines in the 1980s.

"But then, someone decided to take out the operations division to form SMRT," Mr Wildermuth said.

By the time SMRT was privatised and listed in 2000, MRTC - which became part of the LTA - had lost a sizeable chunk of its engineers.

Over the years, more engineers left to join the operators, suppliers and even other regional rail developers. It did not help that engineering had, meanwhile, lost its appeal for tertiary students. Even among those who graduated with engineering degrees, not all joined the profession.

A version of this article appeared in the print edition of The Straits Times on December 05, 2015, with the headline 'Rail nationalisation? Govt may simply be reclaiming its engineers'. Print Edition | Subscribe