Public transport operators are thriving, capital should be raised from shareholders
THE report “New routes and more elbow room on buses” (March 8) creates fresh doubts over the direction of the Government’s S$1.1 billion bus package.
Our public transport industry is basically a duopoly owned by a coterie of private investors, so one question comes to mind first.
Were other avenues to raise the required funds seriously explored by the public transport operators (PTOs) before the Government came to their rescue?
The over-subscription for Genting Singapore’s loan stock recently, with S$6 billion chasing S$1.8 billion, indicates that the market is awash with liquidity. Raising funds should have been a breeze.
The accepted practice in companies, both private and public-listed, is to raise any required capital from their shareholders.
By all accounts, SBS Transit and SMRT Corporation are thriving, thanks to periodically approved fare increases. So why the need for public funds when there is no sign that they are in extremis?
In comparison, when the Pan Electric crisis erupted in 1985, it was the local banks who bailed out the stockbroking industry, with the Government only in supervisory mode. There is no comparable threat today.
The S$1.1 billion package works out to S$2 million for each of the 550 buses that the Government will fund. And here, other ambiguities creep into the scenario.
The Transport Minister’s explanation that it is a “budgeted figure” is more alarming than reassuring, as it could also run over budget.
The Finance Minister’s view that the package subsidises commuters, not the PTOs, is another novel interpretation of the situation.
The more common understanding is that state funds are citizens’ funds, and the sum in question works out to more than S$300 per citizen. So who really is “subsidising” whom? Most pertinently, what quid pro quo is there from the citizen’s perspective?
The sop to commuters that bus and train fares will be unchanged this year must lead to the inevitable question: After that, what?
It would also be in the public interest of better awareness and transparency to know how much the appointments and deliberations of the Public Transport Council cost. So too the remuneration of those heading the PTOs.
After all, public money is involved, even if it may seem only indirectly, to fund their operations. Meanwhile, long-suffering commuters are wondering whether they can really expect any relief in conditions.