Uncle Leong: Transport fare review: What’s missing?

[Sammyboy RSS Feed]

An honorable member of the Coffee Shop Has Just Posted the Following:

Transport fare review: What’s missing?


November 8th, 2013 | Author: Contributions




Holland-Bt Timah-MP Liang Eng Hwa (above) proposes that
the Govt not increase public transport fares until commuters' confidence in
services is restored.


I refer to the articles “Up to 1 million commuters to benefit if fare review
recommendations are approved” and “Continued affordability of public transport is key: Lui Tuck
Yew“ (Straits Times, Nov 6).

Wait until next fare increase then get concessions?

The latter states that “In a Facebook post Tuesday he said: “We must do this
while recognising the need to keep the public transport system in Singapore
financially viable. In this regard, we should use the next fare exercise to
enhance existing as well as implement new concession schemes for various groups
of commuters, with special attention to the disadvantaged groups.””

Since the fare review committee took much longer than the original time frame
that it was given, and groups like the disabled, polytechnic students and
lower-income have been waiting for years for concessions, shouldn’t the response
have been that the concessions will be implemented in say 3 months – instead of
“we should use the next fare exercise to enhance existing as well as implement
new concession schemes”?

When is the next fare (increase) exercise?

Always give and take back?

Why can’t we for once give first and then take increase to take back later,
as has often been the case when it comes to paying for practically everything in
Singapore? Why must we wait until we increase fares next, then enhance the
concessions?

No transport operators’ financial projections?

Why is it that the fare review report does not have any projections of the
transport operators revenue, costs and profits taking into account the projected
increase in the population and ridership in the future, under the proposed new
fare adjustment formula?

Other countries have guaranteed fare increase formula?

Are there any developed countries that have public transport fare adjustment
formulae that practically guarantees annual fare increases for transport
operators as the formula is linked to inflation and average wage increase?

If you have concessions which say are a discount on the ever increasing
fares, the disadvantaged in society may continue to be progressively worse off
in the future.

Fair comparison with 4 cities?

Why is it that a comparison is made with fares in 4 cities, but there is no
comparison as to the proportion of fares expenditure to income, and wage
levels?

Why is it that the fares comparison with the 4 cities on a trip basis, do not
take into account that all these cities have monthly or longer passes which
reduce per trip travel costs substantially?

Since there was also a comparison that 2 of the cities’ fare increase in the
last 5 years were higher than Singapore’s, does it mean that the other 2 cities
were less than Singapore’s? – Failure to mention the obvious?

Why only choose to compare with these 4 cities – which are among the highest
wage level countries in the world with minimum wages to compare with Singapore
which has one of the lowest wage levels among developed countries and without a
minimum wage?

Silence on transport vouchers’ issues?

Why is the report silent on the plight of the lower income when transport
vouchers were generally only enough to offset the year the fares go up, but
ignoring the previous almost annual fare increases?

No lower-income workers’ statistics?

Why talk about helping the 2nd quintile and 2nd decile of the lower-income,
without any statistics as to how many lower-income workers there are in the
population?

Can spend $1b, but commuters have to co-fund
concessions?

Since the Government can spend more than a billion dollars to help the
transport operators in their bus operations, why does the report say that “The
Committee feels that having the Government and commuters share the funding of
concessions promotes the spirit of partnership. This is supported by the
quantitative survey findings gathered by the Committee”?

More concerned about operators’ wage costs or people’s
wages?

As to “There have been some suggestions to consider the use of the
median Wage Index (WI) instead of the mean WI6 that is currently used.
The Committee looked at the correlation of both wage indices with the PTOs’
manpower cost and found that the mean WI has a closer correlation. In
addition, the mean WI was found to be less volatile compared to the median WI.
Thus the Committee recommends retaining the use of the mean WI in the formula” –
are we more concerned and focused on the operators’ wage costs or the historical
low real median income growth of Singaporeans?

Profitability dropped because … ?

Have all the very detailed explanations in the 85 page report about the
decline in the operators’ profits, other financials and increase in costs, taken
into account the arguably unique recent problems of breakdowns and maintenance,
etc – as reflected in say SMRT’s annual report?

- “R&M expenses rose 32.7% to $112.5 million with increased scheduled
repairs and maintenance and overhaul of ageing trains.”

Impairment of interest in associate, Shenzhen Zona, amounting to $17.3
million.

Other operating expenses saw an increase of 8.8% to $204.5 million, due
mainly to higher legal and professional fees and a $2.0 million penalty imposed
by LTA for the December 2011 train service disruptions … higher insurance
expenses and increase in security related expenditure

Depreciation net amortisation rose 16.2% to $150.6 million taking into
consideration the full impact of the 17 new trains, and a larger bus and taxi
fleet”

Same old story, but ignoring the obvious?

In the final analysis, we seem to be talking about and focusing on the same
old story about our public transport system, but ignoring some of the obvious
questions, issues and problems highlighted
above.

Leong Sze
Hian

Leong Sze Hian is the past President
of the Society of Financial Service Professionals, an alumnus of Harvard
University, Wharton Fellow, SEACeM Fellow and an author of 4 books. He is
frequently quoted in the media. He has also been invited to speak more than 100
times in 25 countries on 5 continents. He has served as Honorary Consul of
Jamaica, Chairman of the Institute of Administrative Management, and founding
advisor to the Financial Planning Associations of Brunei and Indonesia. He has 3
Masters, 2 Bachelors degrees and 13 professional qualifications. He blogs at www.leongszehian.com.


Click here to view the whole thread at www.sammyboy.com.