Forum: Difficult trade-offs in ensuring public transport system remains financially sustainable

I am puzzled by Straits Times senior transport correspondent Christopher Tan's conclusion in his commentary, "Balance of fares, subsidies and commercial returns key to sustainable transport system in S'pore" (Oct 11).

Contrary to Mr Tan's claim that public transport operators are earning higher profits in recent years, SMRT's financial statements showed that it had incurred an average loss of 4.4 per cent from the 2017 financial year to the 2019 financial year.

It is misleading to focus on SMRT's profits in the 2020 financial year as these were due to Covid-19-related support, in particular the Jobs Support Scheme, given to affected businesses across different sectors.

Without the Jobs Support Scheme, SMRT would have made a loss in the latest financial year as public transport ridership has decreased during the pandemic. Likewise, SBS Transit would have incurred a loss if not for the support it received from the Government.

The increase in subsidies in recent years has resulted in better rail reliability, bus services with better coverage and reduced waiting times, as well as higher salaries for transport workers.

These are good outcomes which commuters appreciate and support, but we must also ensure that our public transport system remains financially sustainable over the longer term.

We will require a range of different measures and have to strike a careful balance between the need for fiscal sustainability, fare affordability for commuters, and public transport quality and service standards.

These are difficult trade-offs. It is simplistic of Mr Tan to conclude that all it takes to achieve this goal is for the Government to nationalise the public transport system and squeeze operators harder.

We should also not forget that part of the Land Transport Authority's growing deficit is due to the authority paying for a growing network of rail and bus assets, unlike the previous arrangement where the operators were responsible for owning and replacing the assets.

Is it realistic to think that we can expand our MRT network, run more buses and achieve higher levels of reliability and service quality without wanting to pay for these improvements through fares and public subsidies?

Chen Shunquan


Christopher Tan's reply: The piece merely questions if having a system where soaring subsidies coexist with growing commercial margins is ideal. It explores ways to extract more value for money, instead of relying solely on fares and tax dollars.