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1/19/2008

Overhaul of bus system - back to basics

Raymond Lim is another hard working minister working very hard to overhaul our efficient transport system that has been made more efficient by privatisation and the merging of several providers to gain from the economy of scales. Why is it still inefficient really bugs me? The key changes to Raymond's reform of the system are: 1. transport system to serve commuters' interest and not to make more money. This is the most radical change I think. 2. Central control and planning by the govt and not by the providers. Ooh, are the privatised management more capable, efficient and commercially wise? 3. More providers to generate competition for better service? What, what's that? 4. This may not be a major issue, but hey, finally season pass is coming. What the above changes boil down to is that the transport system should be taken back by the govt and be made a public service to serve the commuters. The concept that these privatised transport providers would want to be efficient and provide the best service without making profit is a big flaw in the assumption. And don't ever forget the argument, the famed argument, that they have to answer to their shareholders. Then how? This contradition cannot be resolved without making transport providers as an essential govt service. I will strongly recommend that the bus and MRT systems be returned to the govt as a stats board. Then we can talk about providing a service for the people without making profit as a key objective. And if this 'stats board' is still inefficient in spite of the super talents with super pay managing them, fire the whole bunch and get a new team. Privatisation is not a cure all for inefficiency and incompetence. The concept is as tooth as the tooth. I have personally seen many private organisations managed by clowns just to protect their own jobs and pay without any concern of where the organisation is heading. I will write about this tomorrow.

7 comments:

Matilah_Singapura said...

Central planning and price controls will definitely render a terrible, ramshackle transport system in the long-term...

...and "back to basics" means back the the old socialist/communist days of S'pore (when local phone calls were FREE)

Anonymous said...

Oh, stop the "four legs good, two legs bad" talk. Isn't it possible that state corporations be managed as efficient as private enterprises provided you had the political will?

redbean said...

which ever guru that came out with the mantra that civil servants are inefficient and only by privatisation can they be efficient should be hanged. right?

the tooth is that many believe in this mantra : )

Matilah_Singapura said...

Before any discussion on "privatisation", one must firdt define ones terms or the discussion will go nowhere.

What I mean by privatisation is true, free PRIVATE enterprise -- "free" meaning people can associate freely, the firm is "free" from govt interference.

However what is understood to be "privaatisation" (of govt services) is that the govt forms a Pte Ltd company and places one of its idiots in-charge. This company is run and protected by parliament, which makes it none other than a monopoly run by an oligarchy.

And this is WORSE than when it was a simple govt service funded by taxes. Now the run for PROFIT and therefore cancharge MONOPOLY prices.

There reasons why (true) privatisaation is efficient. Private ownership of the means of production mean that owners tend NOT TO waste resources. Free competition in the market place will mean they have to run tight ships to meet price compitition pressures from their competitors.

Because there is more than one player (all vying for the consumers' dollars), competition is rivalrous, and the consumer benefits by having choice, and also a high standard (driven by self-interest) of delivery. And if the customer is dissatified, look out! The firm guilty of causing the ire of customers will LOSE MONEY to its competitors.

Matilah_Singapura said...

anon 547

> Isn't it possible that state corporations be managed as efficient as private enterprises provided you had the political will? <

It may look like "it's working" in the short term, but over the long term NO, it is not possible.

Why? Without market signals - reflected in prices of "goods" sold and prices bid for factors of production there will be a misallocation of resources and evntual SHORTAGES.

Using "political will" means you by-pass market signals and mechanisms completely
and that leads to eventual failures.

Examples: public health and public education systems: notice the recent shortage of teachers. Solution? Offer more money (tax funded) and thus bypass the market signal that public education is failing. Same wirth public healthcare in many countries --- waiting lists are getting longer, i.e. SHORTAGES are occuring. Reason: prior planning ignored market signals - that there was more DEMAND for services than the tax system could SUPPLY. Solution: either raise taxes or convert to partially funded public healthcare (i.e. balance to be borne by patients)

However, over the long term, all these band aid measures will fail too. Anything and everything which is publically funded will eventually fail. You can bet money on that, and bet on the privatised solution to make you even more money.

redbean said...

read my chicken rice myth.

public policies and services must be tailored to the needs of the people not what the decision makers think the people should need and should pay for.

the demand must be from the people and not from the policy makers. compulsory demand.

Matilah_Singapura said...

> the demand must be from the people and not from the policy makers. compulsory demand. <

In that case, it would be "majority wins".

Which leads right back to tyranny.

The argument that the govt doesn't need "consent" for every policy it introduces is that the govt already HAS the consent by peoples' mandate.

Either which way you cut it, it goes back to tyranny, if you are the minority or individual who does not agree with whatever policy is being introduced.

Like it or not (most people don't like it — even me sometimes), the free market is the only mechanism where individual choice is placed FIRST, so that no one will be "sacrificed" for the majority, and there is ALWAYS a way, backed by a RIGHT to disengage oneself from the herd.

True free-market reform of the transport and specifically the bus system means that the govt will allow TRUE COMPETITION.

For e.g.

(1) operators running school and private bus services (like the bus from bio tech park) and coaches be allowed to compete with the national operators. After all, they don't ferry kids or staff all day. At the moment after these buses have done their job, they are idle.

(2) The allowing of "pawang-chas" the good-old "pirate" taxis of the 50's to 70's. Also allow free market pricing - i.e. they can charge what they like or use meters - up to them and up to customers to accept or reject.

The idea of free market reforms is always to put THE CUSTOMER FIRST, and give him "bang for the buck". This is why we have in the market cheap computers, watches, pens, shoes and clothes. Of course you have the choice of buying the expensive varieties of these goods, but that is the point - you choose, no one forces you. And the fact remains that even "cheap" pens, watches and clothes all perform their function very well. For e.g. A 50¢ ball point pen is extremely reliable.

Contrary to what many believe, the free market does not make things more expensive, the free market makes thing CHEAPER.