Parliament Debate on ministries' budgets: Transport

Transport subsidies to continue, but there's need to watch costs

Taxpayers will continue to subsidise the operation of trains and buses, but measures have to be in place to prevent a cost spiral.

Speaking during the debate on his ministry's budget yesterday, Transport Minister Ong Ye Kung said public transport subsidies, which amounted to around $2 billion a year before the pandemic, will continue.

"We can't run away from that," he said. "But the bill to taxpayers cannot keep ballooning. If it does, we would leave our future generations a growing financial burden."

One way to keep subsidies in check is to cut back on bus routes which run parallel to rail lines.

He said buses will continue to provide trunk services between towns. "It has never been a pure hub-and-spoke system," he said. "And this will not change."

But the minister said that when new rail lines are built and start to operate, bus services which run parallel to these lines will have to be cut back.

"We need to try to reduce excess capacity," he said, explaining that bus ridership for parallel services plunges whenever a new MRT line opens, chalking up "tens of millions of operating subsidies every year".

Mr Ong was responding to MPs who raised the issue of financial sustainability of public transport.

Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) cited the contrasting examples of Germany and the United States.

He said that in recent decades, Germany had improved its public transport services, increased productivity, reduced costs and raised ridership. Yet, it had been able to cut public subsidy.

In the US, public transport systems had improved and expanded, "but at a far higher cost, requiring much larger government subsidies, and attracting fewer additional riders".

"In Singapore's case, are we at risk of skewing towards the American trajectory?" he asked.

Mr Ang Wei Neng (West Coast GRC) pointed out that no major rail operator in the world is profitable, with the exception of Hong Kong's MTR.

MTR was "the most profitable train operator in the world" because it has land development rights along rail lines, he said.

But in Singapore, proceeds from land sales around MRT stations are channelled into the Government's reserve.

Mr Ong said that one way to "square the circle", as far as financial sustainability goes, is to seize opportunities which Covid-19 has presented.

The pandemic, for instance, has allowed more people to work from home and reduced travel demand. It has also flattened the peak-and-trough of commuting patterns.

Mr Ong said he hopes this can be sustained. "To achieve this, we will need the cooperation of employers to stagger working hours, allow working from home even after Covid-19 passes," he added.

A version of this article appeared in the print edition of The Straits Times on March 06, 2021, with the headline 'Transport subsidies to continue, but there's need to watch costs'. Subscribe