Wednesday, December 26, 2007

Council needs Counselling


Singapore's Public Transport Council (PTC) is a very queer body. Its website explains that it was

"...established in 1987 as an independent body to approve and regulate bus services, public transport fares and ticket payment services."

Indeed, over the years, it has just been doing that - approving or disapproving applications for transport fare increases. It has never had to consider applications for decreasing fares, for the obvious reasons that public transport companies need to increase their shareholder value. No public transport company will volunteer to decrease fares so long as there are enough commuters using their transportation services. So I was surprised when I read a report in today's Today (26 Dec 07, page 4) on the PTC disapproving SMRT's proposal to provide public transport to a cluster of private houses in the Yio Chu Kang area because, and this really takes the cake, it reckons that SMRT is NOT charging a premium rate for what it (i.e. PTC) considers a premium service. SMRT had planned to charge S$1.30 but the PTC considers that fare too low, that it should be between $2 and $3! It reckons that the public, whom it is supposed to serve, should pay more rather than less! I never...

Frankly, whether the fare is too low is no business of the PTC. The public transport company takes the risk, not the PTC. That it is willing to charge a fare lower than what the PTC reckons (by a yardstick that confounds me) is 'correct' is of no concern to the PTC at all. SMRT, the public transport company in question, stands to lose anyway if it does not charge enough to at least recoup its investment, if not turn a profit. If it reckons, after doing its feasibility study, that $1.30 is the right fare to charge, who is the PTC to say that that fare is too low? And on what basis is it classifying this as a premium service? Because the tranport service is catering to private house dwellers? And those that live in these houses MUST pay more? What if the service was meant for a poorer neighbourhoods not well served by existing public transport? Would this service be called basic service? Would S$1.30 be too much by PTC's reckoning? I see where the PTC is getting its (flawed) logic from. It is just like the government not reducing the HDB executive apartment owners' tax burden through subsidies on conservancy charges which it does for 3-5 roomers because it reckons that the former can afford to pay more. This more word is appearing once too often nowadays, and to think that the government may be one of the culprits...

Now I understand why the public is not better served by niche transport services - not because of the monopolistic SBSTransit nor even SMRT - but because of the PTC. Sheesh, if that is what the PTC is about, it is time that it re-examines its role as a regulator of public transport. It is now putting up barriers to providers who are willing to take the risk in providing niche transport services where it sees a demand, and thereby serve the public better. And all this while I thought that the PTC was on the public transport commuters' side.

Well, one positive thing that came out of this is that it shows that the MP, Ms Lee Bee Wah, is
serving her constituents well, which is more than I can say for the PTC. That she has, as a ruling party MP, had to overcome so many barriers and spend so much time getting this through, one wonders what chance there is for an opposition MP to do good for its residents vis-avis the PTC (or, for that matter, any government body).

6 comments :

Heng-Cheong Leong said...

The problem is that ComfortDelgro and SMRT are granted monopoly rights in operating basic public transport service. In exchange, there are rules and policies imposed on them, such as hours of operations, minimum frequency, geographical reach. (Even width of doors on the buses.)

So, in order to protect the monopoly rights, there are "funny" rules imposed on non-basic public transport services. Price differentiation is one of the rules.

In order to have a more open and free competition in Singapore, the government will have to take bold transformation steps. And I don't think the government is willing to do so.

Red Bull said...

So, really, all this talk by the government about a world-class transportation system in Singapore that will be the pride of the world is just a load of bull***. The government must mean, when it talks about world-class, the bull ring around the island that, unfortunately, is delayed two years. It isn't interested in each one of us, just the bull...

Anonymous said...

Supposing a section of the population does not mind having a bus service with minimum frills but at minimum fare, why should the Gahmen or PTC for that matter deny them such options.

I remember at one time we used to be able to hop on to alternative bus services by just dropping a standard fare into fare box. Why can't the Gahmen bring us back such services? Was it because they pose a threat to SBS/SMRT buses ? Our money-faced Gahmen does not seem to have the people's interests at heart.

Epilogos said...

The problem with monopolies is that it ultimately distorts the market, resulting in ridiculous outcomes. It prevents enterprising niche players from entering the market and insists that only the monopolist (by definition) provide the only option, even if that option is of substandard quality. We encourage people to set up heir own bakeries and other enterprises, but when it comes to transport services, the market is untouchable. The problem is, this is exactly where we need imaginative ideas which the government has not been able to come up with all these many years. It has well and truly dug a hole from which it is unwilling or unable to extricate itself from.

Anonymous said...

PTC was established as an independent body but...

So it is when they talk about establishing a controlling body for bloggers some time ago. All this bull about independent bodies will eventually fall under government control. Look at our trade unions, our consumer watchdog CASE, transport operators etc. Would you believe that PTC can act independently? PTC is set up just to legitimise fare increases for the government controlled transport operators. Nothing more, nothing less.

realist said...

We have a very unique situation in our public transport sector. Those public transport company are assured of making profits. If they can't make profit, just ask for fare increase through the PTC. In fact inefficient companies should be allowed to go bankrupt rather than be protected. Our bus companies can spend money as they like and then ask for fare increases. It is another UNIQUELY SINGAPORE setup.