The Straits Times
Published on Dec 11, 2012

Relook public transport model


BESIDES reviewing the public transport fare formula to cater for future bus drivers' wage increases, it may be timely to re-evaluate our public transport model and reconsider the rationale behind licensing two profit-oriented organisations - SMRT and SBS Transit - to operate both our public bus and rail systems in the name of competition to raise efficiency and productivity ("Bus fares may go up to help improve drivers' pay"; last Friday).

In reality, there is no competition as the two companies operate their bus services on different routes and run their trains on different lines.

Hence, the Ministry of Transport may wish to consider the following suggestions in revamping our public transport structure:

First, license SMRT to run all the rail lines and SBS Transit to operate all the bus routes. This would enable the companies to enjoy better economies of scale. They would also be able to better develop and focus on their respective core competencies as the skill sets required for operating the rail and the bus systems are different.

In addition, they should divest all their other non-core businesses like retail space rental, and concentrate solely on providing good public transport services.

As for competition, SBS Transit could run buses on routes parallel to rail lines while SMRT could offer more frequent trains and a shorter journey time for similar trips.

Second, change the current public transport model from being a profit-maximising one to a cost-plus one, that is, cost recovery plus a profit margin which is just sufficient for funding the replacement or addition of buses, trains and other related inventories.

Third, use a portion of the huge sum of certificate of entitlement premiums to subsidise bus and train fares to ensure affordability. This is akin to the Ministry of Health subsidising public health services since public transport, like public health, is an essential service.

Hopefully, implementing the above suggestions would create a win-win situation for the companies and the commuters.

The companies would be able to pay their staff fair wages and have enough surplus for renewing their equipment, while the commuters would enjoy affordable bus and train rides.

Ng Chee Kheon