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7/14/2011

Lui Tuck Yew defending the privatization of public transport

Lui Tuck Yew spoke against the Worker’s Party proposal to nationalize public transport. To him, the privatization formula works and if it is nationalized, it will become inefficient, non commuters will also have to pay and cost will go up and everyone ended paying more.

Assuming he is right, and I think he is. Look at the housing programme after it was privatized. Look at the medical care services after they are privatized, and transportation of course. All became world class and all so cheap and affordable. Ok, cannot say cheap, but affordable. If they were not privatized, the cost would have gone up even more and everyone paying more. Please be grateful that they are privatized.

And there will be no motivation for a nationalized public service to improve, except maybe the ministries. The ministries are not privatized, and presumingly running well. Or are they, like all non privatized organizations, running inefficiently and incurring more and more cost? In a nutshell, is the govt runnning efficiently without being privatized or it is running badly and incurring higher cost? If it cannot run efficiently without being privatized, then the govt/ministries should also be privatized.

Let’s move away from all these circular arguments that are self serving. Let’s ask a simple question. Can the transport companies continue to run, under the present system and staff, ceteris paribus, and don’t run into the red for another 3 years?

Another question, can the public transport companies operate with the current profit margin or lesser profit margin by ploughing back some profits to commuters and avoid another fare hike in the short term?
How much profit is enough for the privately run companies? Or is it a privately run company in the first place? Why is a minister defending a privately run company and its profits?

In my opinion, any able administrator could run the companies without raising fares for the next three years without making losses, unless fuel cost shot up dramatically.

So why the hurry to raise fare?

23 comments:

Anonymous said...

Privatisation is good if there is true competition in a really open market. Government intervention is necessary only for consumer pricing watch. And yet, this can only work if there is a total accountable and transparent government to its people. Other than these above requirement, experience of other advanced countries tells you privatisation will fail in terms of consumers market.

Anonymous said...

It's not privatization that is bad. What is bad is a rogue government that supports huge profit (20% return on equity year after year) for the "private" company, which is largely owned by a "private" investment unit which is run by the government through "private" appointees. TH owns 54% of the shares.

so1trg said...

You know, I know.
Simple economic theory.
Unfortunately this brings up the question how come we spent plenty of tax-payers money cultivating scholars who skew economic theories for their own benefit.

Anonymous said...

When cartels are allowed to operate, privatization works against the consumers.
What is needed in Singapore is free market.
Whatever it is, it is the duty of any government to make sure that the people get a fair deal. The consumer pays a fair price for the goods and services and the businesses get a fair profit.
However, in Sin, consumers have the choice of buy if You can afford or go without if You can't. Of course, ah longs also operate in quite the same manner, You want/need the money, pay the interest of market rate they have set, otherwise don't take the loan. They do not use any force to make anyone takes their lendings, in fact, they are very careful. Theirs' is a very essential service to some Singaporeans to get other essentials.
And Singaporeans have a lot more essential needs; safety, foods, shelter, medical care, transportation and education etc.
Just imagine when cartels are the suppliers and operators of all the essentials and they are sanctioned.
Where do the people stand?

Anonymous said...

It could be worst.

The said...

What privatization? What competition?
Singapore's transport industry is basically a monopoly or duopoly.

Tuck Yew said severe downside if WP's suggestion is adopted. That has already happened in the past decades. Non-public transport users (read motorists) have been paying billions a year to the government. If part of these are used to fund public transport, not just nationalizing them, we can even have free public buses and trains and still have hundreds of millions of unused funds from the collection of ARF/PARF, COE, ERP, petrol tax, road tax, etc.

Anonymous said...

Never argue with politicians. Even with shit drooling from their mouths they will argue that it is candy they are eating.

No matter how badly the healthcare system looks or the public housing system looks or the transport system looks or the labour situation looks, they will still argue that it is they have the best in the whole wide world.

Just do the right thing in 2016. Kinda early to say that, but there is no better way to make them listen.

southernglory1 said...

Before the advent of the PAP there were quite a few truly private bus companies viz Hock Lee Bus, Green Bus, Paya leybar Bus, Bedok Bus, Ponggol Bus, Easy Bus and may be one or two others. These were truly private commercial companies where the owners risked their capital in the undertaking. Despite great competition among themselves these companies ran well, provided good services and cheap fares and still managed to make good profits.However the PAP government googled at these profitable bus companies with eagle eyes. Soon these private bus companies were forced to surrender their rights to operate. In its place a pseudo commercial entity or quasi government company "Singapore Bus" was launched with capital from public issues. Singapore Bus is a virtual monopoly . Just like any other government linked companies its CEO and Board of Directors squeeze the company dry with high salaries and bonuses which run into millions of dollars. So how can Singapore Bus be called a privatise commercial concern. It is supposed to be the people's bus, but do the people get any benefit except paying an ever increasing high fare annually justified by a spurious reason of high operating cost. Operating cost will come down if the CEO and the directors stop paying themselves millions. So Lui Tuck Yew please speak with some sense and stop bluffing. Southernglory 1

southernglory1 said...

Tuck Yew says 'profit motive spurs efficiency'. Does he know what he is talking? Or is he indulging in some sort of demagogic or dogmatic style of reasoning. Surely when a company is efficiently run and profitable it must bring some benefits to the people and the share holders in the form of better service and cheaper fares. Or does he see profit as a motive in efficiency for the CEO and the directors to reward themselves ever higher salaries and bonuses which run into the millions. Every year Singapore Bus makes hundreds of millions of dollars in net profit. Wherefor the reason to raise fares? Please. Tuck Yew, don't spout spurious reasons. Southernglory1

Chua Chin Leng aka redbean said...

The spin doctor is at work. Try fuzzy logic, or self serving logic.

Anonymous said...

I had a joke before.

Mahatir met LKY and boasted to LKY,
Mahatir: I started Proton which made Malaysia millions of dollars over the years.

LKY replied: I printed stacks of papers (COEs) and sold them for millions of dollars.

Mahatir: !@#!

Chua Chin Leng aka redbean said...

The real victims of this joke are Singaporeans buying cars, also those not buying cars. In fact all Singaporeans. Taxis also have to buy COEs. Guess who ended paying for this expensive piece of paper.

Anonymous said...

Hi Mr Southernglory;

Minister Lui maybe too young to know the Bus Companies You mentioned here. But, despite/beside his ignorance of the historical/factual evidence, the Statement he made, had no logic or sensibility, it was a load of gibber.

HOW HE HAD CONVINCED HIMSELF ABOUT THE VERACITY OF HIS OWN STATEMENT IS BEYOND THE COMPREHENSION OF EVERYONE ELSE!

Anonymous said...

Privatization means the loss of power for ruling party to squeeze tax payer's dry by rising fares unnecessary when they earn sky high profits without significantly reduce overcrowding and increasing the frequency of buses/mrts. Hence, it will hit the pay pocket of ministers with less bonuses. So of course this Lui objects to privatization. This issue will hit his pay pocket badly so would he be so daft to support it? Dream on.

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