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Friday, December 7, 2012

Bus Fare Increase!

I read with disbelief the headline in the papers today what Minister Lui said. I am perturbed why an increase in salary for staff in a public listed company is the concern of the government.  As if pumping $1.1b tax payer money into these companies is not enough – now they expect the public to pay for the increase in the salary through higher fares! They might as well put a donation box on each bus and train and ask the commuters to donate money for the staff!

For goodness sake, if the transport sector is so unprofitable, then the transport company should exit the business and let somebody else take over. Minister Lui asked and as quoted in the papers “where is that money coming from?”

Let me tell you where:

SBS and SMRT are the 2 main public transport operators together with Comfort Delgro which operates mainly taxis and private hired buses.

In their latest financial announcements, SBS and SMRT reported net profit for the current year up to the current quarter at $16m and $70m respectively. For their last full financial year end, the profits were $37m and $120m respectively. Shareholders' fund was $332m and $791m. If that isn’t money to be used to pay for the salary increase what is?

Aside from that, from their annual report, salary cost was $305m and $340m for SBS and SMRT out of which $2.4m and $9.7m went to directors and senior management respectively. No wonder SMRT has such human resource problems. Look at the amount that they pay their top as compared to SBS! Me think, they should cut the pay of the bloody incompetent management at SMRT and give it to the bus drivers.
Annual Reports for SBS
Annual Report for SMRT

Both SBS and SMRT are listed on the SGX and answerable to its shareholders for its bottom-line but yet it is operating a public service which may necessitate some loss making operations. Public service and profit driven objectives cannot be easily reconciled and where there is a conflict, the interest of the owners will always take precedent over the provision of public service. After all, the logic will be that the company cannot fail otherwise greater harm will be done so these companies are allowed to get away with slipshod services like not providing buses to far flung places like Kranji; Senoko etc or operating the trains at later hours.

Since the government is pumping so much money into these companies, I think the government might as well take back the operation of public transport in Singapore. At least than there will be justification to use tax payer money to fund them!

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