By Andrew Loh
Mr Gan Thiam Poh, MP for Pasir Ris-Punggol GRC, says the public transport fare review hopes to make the link between wages for public transport workers and fares clearer. This is “so people can understand there is correlationship, to make it more reflective of the cost structure."
Mr Gan, who is also a member of the Government Parliamentary Committee (GPC) for Transport, was speaking at a neighbourhood public forum in Hougang on Sunday morning. He was replying to questions from this writer.
Mr Gan was asked for his views on several questions, namely: the rationale behind Transport Minister Lui Tuck Yew’s recent comments that fares will have to rise in order to “improve drivers’ pay”, and why the government is saying this despite the fact that the transport operators are making healthy profits.
The Workers’ Party, in a statement released on Sunday, pointed to this as well.
“The two public transport operators (PTOs) remain very profitable,” the party said. “SMRT and SBS Transit turned a profit of $119.9 million and $36.7 million respectively in the last financial year, while providing shareholders a return on equity (ROE) of 15.1% and 11.3% respectively over the same period. In contrast, the median ROE for Singapore Exchange-listed companies over the past year was 7.8%.”
In a 10-minute exchange with this writer, Mr Gan says that in fact there is no confirmation or certainty that there will be a fare increase next year.
What Mr Lui meant, Mr Gan explains, is that the current fare formula does not show the link between wages and fares and thus it might be good to make this clearer in the formula.
What the government is trying to do is to "to review this formula." Mr Gan also said the trains service are subsidising the bus service as “the buses do not make money”, he said he was told.
Mr Lui’s remarks on 7 December have attracted criticism, especially online, with many questioning the rationale and the timing of such an announcement, given the recent strike incident at SMRT and the continuing problems with the transport system.
"Any fare adjustment will allow the two operators to have more resources in time to come to make further salary adjustments,” Mr Lui said. “We recognise that the drivers need to be paid more. (The) question is where is that money coming from?” (TODAY)
What is also unclear is the relationship between wages and fares, given the seemingly contradictory statements made by different officials.
In March, Finance Minister Tharman Shanmugaratnam announced a S$1.1 billion Bus Services Enhancement Fund for the transport companies. Part of this is to help them purchase 800 new buses.
“IF THE Government does not step in to help public transport operators SBS Transit and SMRT improve bus services,” the Straits Times reported Mr Tharman’s explanation, “commuters will have to pay 15 cents more in fares per journey to get the better service they want.”
In February, Mr S Iswaran, Second Minister for Home Affairs and Second Minister for Trade and Industry, said “part of this funding is also designed to address some of the operating cost implications over the next 10 years.”
It would thus seem that the government is also lending a helping hand to the operators in terms of wages as well, which would be part of their operating costs.
In May, however, commenting on the wage increase for its workers by SMRT, Mr Cedric Foo, the chairman of the Transport GPC, said he didn’t “think there's a direct correlation between drivers' wages and bus fares”, when he was asked if the pay rise would mean increased fares.
So, do fares have any linkage to wages for transport workers? And since the government is already heavily subsidising transport operators’ costs (for as long as the next 10 years), why’re transport operators still allowed to increase fares? These are some of the questions which the public are asking.
But they are not new questions. The operators are allowed a window each year to submit applications for fares “review”, a euphemistic term for fare increase. This has always raised the ire of commuters and members of the public. This time, however, the anger is more pronounced, given the numerous breakdowns, bad maintenance regimes, and bad Human Resource management in the SMRT which resulted in Singapore’s first strike in two and a half decades.
As for Mr Lui’s remarks about possible fare increases next year, Mr Gan says, “I think people have misunderstood.”
What is on record is that fares have been raised 8 times since 2000.
“Commuters should not be expected to pay higher fares, especially when service standards remain unsatisfactory,” the WP said, “as they have been since the last fare hike. The Government and PTOs must put the public interest before shareholders’ interests. If PTOs are unable to do so because of their obligations to shareholders, public transport should be taken out of private hands and run by a not-for-profit corporation which focuses on providing efficient and quality public transport, instead of generating shareholder returns.”
Meantime, here is the 10-minute exchange between this writer and MP Gan Thiam Poh in Hougang on Sunday morning.
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