In Breach of Social Contract in Public Transport
Some
years back in 1996, it was clearly stated in no uncertain terms that “a kind of
social contract (exists) among the Government, the people, and the transport
service providers on the kind of land transport system we want”.
It is another fine example of
Tripartism as
the organizing basis for Singapore society by nurturing and promoting the
partnership between the government, people and private enterprises through
dialogue and mutual understanding for long term beneficial benefits.
This
sacred Social Contract in Public Transport emphasises a strict sense
of social responsibility and social conscience in that “it
will NOT leave it entirely to market forces to determine the
market structure and fares. Instead, it demanded public transport operators
(PTO) to embark on long-term strategic planning, fiscal prudence, and the
efficient allocation of resources through market forces. In essence, competitive market forces shall
be leveraged wherever possible to impel and drive PTO to operate in a socially responsible
manner by being efficient, productive, improving services continuously and
provide value to the commuters (people).
In return
for PTO’s corporate social responsibility in managing public transport, the
government (representing the people) would continue to develop and invest in
the train and public bus infrastructure, as it does in roads and public works
for other road users.
PTOs
as private enterprises are expected to manage the MRT and public buses
efficiently and “profitably” insofar as to enable revenue to recover the use of operating assets while
maintaining a socially acceptable level of quality services. At the same time, they (particularly, for MRT
operators) have to set aside and accumulate sufficient reserves, like any
prudent management, to replace operating assets fully.
An
examination of recent SMRT Annual Reports reveals that it has grossly
inadequate provision in its Reserves for the replacement of
operating assets. Its first set of
operating assets is supposed to be replaced in 2017 at a estimated cost of $6.9
billion, and SMRT’s share is to be $1.6 billion with the government paying the rest. SMRT Reserves has set aside more money for
the issue of employees share options and performance shares for Management than
for the crucial replacement of MRT operating assets for the continuous benefits
and enjoyment of MRT commuters.
Clearly the SMRT, like other PTOs, has no
sustainable policy on MRT and public bus assets development. These
profit-seeking private companies expect the government ie the people to
continue pumping public funds into THEIR operating assets!
In 2013,
the government announced that it would inject an awesome S$1.1 billion to help
the PTOs purchase 800 brand new buses PLUS helping them finance the operating
costs of these buses for the next 10 years. This is in addition to the
government’s unceasing efforts in expanding hundreds of kilometer of MRT tracks
and builds the associated infrastructure for more MRT stations.
Interestingly,
one should note that in 2011, SBS Transit made $36.7 million overall, when
included revenues from its other businesses (e.g rail and advertising) but it announced
an operating loss of $6 million on its bus business. Similarly, SMRT made $119.9 million in FY2012,
even though its bus operations incurred an operating loss of $11.6 million.
The
SMRT is also expected to increase revenues from its new Kallang Wave Mall, 70%
owned with NTUC Fairprice, with over 41,000 sqm of retail space. It has already
reaped bumper profits from train
operations in 2014 as well as from the leasing of
approximately 34,000 sqm of commercial space along its rail network, together
with 700 shop spaces, 80 event spaces and 16 push carts.
Affordability,
a key Principle of the Social Contract, is defined as “fares had to be
realistic and revised periodically to adjust for justifiable cost
increases”. This is breached in the
light of the latest arbitrary, non-transparent and unreasonable public
transport fare hike.
Non-Affordability
is evident from the fact that government has to use
S$7.5million of public funds to subsidise the latest fare increase in
order to mitigate its impact on more than 1.1 million commuters. This is tantamount to subsidising the profits
of highly profitable private PTO companies.
In
fact, the Social Contract in Public Transport has been eroding over the years as
the temptation for profits in PTOs precedes their duty of social responsibility.
The obsession with profits without social conscience means a “race to
the bottom” in terms of public service quality. Without operating assets development and timely replacement,
the current MRT and public bus systems are plagued by overcrowding, delays,
breakdowns and other manifestations of poor service. Without
investing in operating assets, which is another breach of the Social Contract
which demands a “Longer Term View”, any amount of fare increases for better
revenue is counter-productive for service quality.
Singapore Public Transport
Operators Breach Social Contract
In Breach of Social Contract in Public Transport
We
need to have a new Social Contract in Public Transport with more
socially responsible National PTOs beyond the current types and model of
private obsessive profit-seeker types of companies. We need Public
Transport Social Enterprises that
have embedded social responsibility values into its leadership and
management.
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