Train operators, as public service providers, should not be focusing on profits

MRT trains at Jurong East Station on Feb 25, 2019.
MRT trains at Jurong East Station on Feb 25, 2019.PHOTO: ST FILE

Transport Minister Khaw Boon Wan recently warned of higher public transportation fares.

This was to reflect the increasing costs of operating Singapore's MRT system, especially with SMRT Trains and SBS Transit's train division losing $86 million and "tens of millions" of dollars respectively in the latest reported financial year (Khaw: Fares have to rise to keep transport subsidies in check, July 9).

I am both puzzled and concerned by this.

My puzzlement is due to SBS Transit having posted earlier this year a 23.3 per cent net profit increase to $20.7 million for the first quarter ended March 31 (SBS Transit's Q1 earnings rise 23% on fatter margins, May 14), which it partially attributed to higher ridership for its Downtown and North-East lines as well as Light Rail Transit, coupled with a 4.3 per cent fare adjustment that recently took effect from Dec 29 last year.

Its 2018 financial results also reported that revenue from its Public Transport Services division was 16.7 per cent higher last year than in 2017.

Given the statistics above, how did Mr Khaw conclude that SBS Transit's train division lost "tens of millions" of dollars in its last reported financial year?

SMRT and SBS Transit are supposed to be providing public transportation, one of several basic public services which should always remain affordable for the masses to ensure an acceptable quality of life.

Such service providers should be seen almost as public servants because they are providing a public service.

If they are privatised, then they should still depend on revenue from other avenues, such as shop space within stations, so as to still provide public transportation that is as affordable as possible.

As public service providers, generating increasingly higher overall profits should not be their focus.

Adam Reutens-Tan

A version of this article appeared in the print edition of The Straits Times on July 12, 2019, with the headline 'Train operators, as public service providers, should not be focusing on profits'. Subscribe