Transport – BT

Public transport should stay a private matter: Tuck Yew

Transport Minister Lui Tuck Yew yesterday defended the country’s model of privately run public transport operators in Parliament. ‘Our current model leaves the operations of trains and buses to commercial entities as we believe the long term public interest is best served this way.

‘The profit incentive drives the operators towards higher efficiency and productivity, which keeps costs as low as possible . . . Otherwise, if the system is inefficiently run, the public will ultimately pay for the higher operating costs, either through higher fares, or greater government subsidies.’

The public transport model has come under scrutiny ever since a $1.1 billion package was announced by the government to supplement the existing privately run bus fleet with 550 buses. The package covers the purchase of the buses and their net operating costs for 10 years.

SBS Transit will get about two-thirds of this allocation, while SMRT Buses will get one-third. The two operators will add 250 buses of their own and the total of 800 buses will represent a 20 per cent increase in capacity.

Some 70 per cent of the additions will be made within the first three years.

Even as Mr Lui cited the privately driven success stories of the MTR in Hong Kong and London Buses, he pointed out the need for the government to ‘take control of key areas’ which include planning rail lines and bus routes, as well as deciding on ‘timely capacity injection to meet ridership growth’.

Transport researcher Lee Der Horng from the National University of Singapore told BT that there was an argument for both the private and nationalised models.

But where Singapore is concerned, the government’s selective intervention now is justified, he said. ‘Based on the government’s efficiency that has been exhibited, we should be able to further increase the government’s involvement in public transport,’ Prof Lee said.

Government involvement has increased somewhat in recent years. The hybrid of asset ownership by the government and operations by a private firm was first introduced for trains on the Downtown Line with SBS Transit as its operator. SBS Transit, which also operates the North East Line (NEL), will add 60 weekly train trips to the NEL from March 19, it was announced yesterday.

This hybrid system might soon spread to buses. ‘We will need to similarly relook the bus financing framework and decide . . . how best to introduce contestability,’ Mr Lui said yesterday.

While the government shells out the $1.1 billion for the additional buses, the operators will be expected to hold up their end of the bargain. Mr Lui said that the operators would be held to service levels for the entire fleet that will go beyond what is required by the Public Transport Council (PTC).

For example, 95 per cent of all feeder services will have to operate within 10-minute scheduled intervals or better during peak periods, up from the current 90 per cent that PTC guidelines dictate.

These requirements, however, will not be enshrined as the PTC’s Quality of Service standards for now.

As a more aggressive way to make operators pull up their socks, the government should consider setting up a separate body to operate the 550 buses, Prof Lee suggested. ‘It will be like a third operator with a different choice and the other two operators will feel the pinch of competition.’

This hike in service standards follows a drop in customer satisfaction about public transport for the second year in a row. The survey for 2011 – carried out in October after fares were adjusted but before the train service disruptions – saw overall satisfaction drop 1.9 percentage points to 90.3 per cent, the Land Transport Authority said yesterday.

On the upside, 69.1 per cent of people believe that public transport had improved from the year before.

This year, some solace will come from the absence of fare adjustments to public transport, according to Mr Lui. Instead, the current fare formula will be reviewed this year but implemented in 2013. PTC member Richard Magnus will head the review committee.

The new fare formula in 2013 could take into account the fact that fare adjustments were not made in 2012, Mr Lui said.

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