News @ AsiaOne

Why spend public funds for private use?

MPs question Govt's plan to spend $1.1b on bus services. -TNP
Lediati Tan

Sat, Mar 03, 2012
The New Paper

SBS Transit is a public listed company.

And so is SMRT.

So why should the Government spend $1.1 billion to buy them buses?

Questions came thick and fast on the Government's plan to spend that amount of money in a Bus Services Enhancement Fund, which would cover the purchase of 550 buses and the running costs for 10 years.

On Tuesday, the first day of the debate on Budget 2012, a number of Members of Parliament (MPs) had raised questions about this spending.

Yesterday, more MPs followed suit.

As private entities, should it not be the responsibility of the two companies to manage their operating and manpower costs, asked Dr Janil Puthucheary, MP for Pasir Ris-Punggol GRC.

At the end of the day, they are accountable to their shareholders, he added, so can the public be assured that the funds will go towards benefiting the citizens and not the shareholders? In unveiling the Budget on Feb 17, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam had explained the rationale for injecting $1.1 billion to improve bus service levels.

It would take time for rail capacity improvements to be completed, so in the meantime, the Government decided to significantly increase bus capacity so as to relieve daily congestion in public transport.

Mr Pritam Singh, MP for Aljunied GRC, called for greater transparency in how the money would be spent.

He pointed out that SBS Transit's 2010 financial report stated that in that financial year, SBS Transit had placed an order for 600 buses, comprising 300 award-winning Euro-5 compliant Mercedes-Benz low-floor single-deck buses and another 300 Volvo double-deckers, for $268 million.

He then urged the Government to provide a detailed breakdown of the operating costs, the salary component and all other components set aside for the $1.1 billion fund.

With the two public bus operators providing funding for another 250 buses, which brings a total of 800 buses on our roads, Mr Singh wanted to know what this means.

He asked: "Is this $1.1 billion a harbinger of things to come in terms of an even larger population size?"

Other concerns he had were on the impact on bus fares and whether the use of taxpayers' money meant that the public can now demand greater transparency from SMRT and SBS Transit?

Also, where does the buck stop?

Would we similarly provide funding to the taxi industry if problems crop up there, asked Dr Puthucheary.

And if the situation worsens for the bus companies in the next five to 10 years, would the Government step in to bail them out?

He said: "Is this just the start of a creeping nationalisation? If so, why not just nationalise properly and reap the full benefits instead of suffering the worst of both worlds?"

Why not privatise?

But if nationalisation is too expensive and too inefficient, then why not privatise properly? While the two transport companies are private entities, said Dr Puthucheary, they operate under significant constraints and burdens such as not being able to respond based on market demand.

For instance, public transport operators are required to apply to the Public Transport Council (PTC), a government-appointed fares watchdog, for fare increases. PTC will decide on the amount of fare increase based on a fare formula while considering other factors such as the state of the economy and the profitability of operators.

These constraints reduce the companies' flexibility and ability to optimise operations in response to market forces, he said.

In the past, this hybrid transport model has been held up as an exemplar of what was possible with good governance, but recent events has led to it being seen as "the worst of both models".

Said Dr Puthucheary: "Can the House and the public be assured that this hybridisation continues to be the best way forward for Singapore?"

He's a fan of public transport

When he was first introduced as a candidate, PAP MP Janil Puthucheary said he was a public transport user.

He also described how he would cycle to work at the KK Women's and Children's Hospital (KKH).

Yesterday in Parliament, he described himself as a fan of the public transport system here.

Dr Puthucheary said: "I took my boys to school on a public bus this morning. I then took another one to KK Hospital, and I came to Parliament on the (number) 166 bus.

"All three services arrived on time. The duration of the journey was as predicted on my iPhone.

"Most of the time there are seats available on these services, and usually I get to read quite a few of my e-mails.

"At the end of today's sitting, I will walk over to Clarke Quay station and take the North-East Line, and 25 minutes later I will be in my constituency at Punggol."

He described the current public transport system as one of the most efficient, reliable and pleasant in the world.

But he also suggested development of the "last mile" connectivity.

He explained what he meant: "Rather than just assuming that when the network is eventually dense enough, people will be happy to walk or cycle to the nearest MRT station, we need to work proactively at changing and encouraging this mindset.

"We need to examine footpaths, cycling facilities, lighting, access ramps and the location of amenities, with as much attention to detail as we can, as it is often these factors that alter the choice of the individual, where a choice is possible."

This article was first published in The New Paper.

Copyright ©2011 Singapore Press Holdings Ltd. Co. Regn. No. 198402868E. All rights reserved.
Privacy Statement Conditions of Access Advertise