COMMENT: Lui Tuck Yew in the hot seat again

Andrew helms publichouse.sg as Editor-in-Chief. His writings have been reproduced in other publications, including the Australian Housing Journal in 2010. He was nominated by Yahoo! Singapore as one of Singapore's most influential media persons in 2011. The views expressed here are his own.

With the news that the Fare Review Mechanism Committee (FRMC) has completed its report, all eyes will now be on the Ministry of Transport (MOT), and its minister, Mr Lui Tuck Yew.

The perennial bugbear of fare increases will feature again as MOT gives its view on the FRMC report in about a week’s time.

The commuting public will await to see if Mr Lui will announce any fare hikes to the public transportation system. The word is that indeed there will be an increase, given recent remarks by Mr Lui himself.

In March last year, he announced in Parliament that the government was injecting S$1.1 billion to help the public transport operators (PTOs) meet the costs of purchasing 800 news buses and the operating costs for 550 of them over the next 10 years.

The funds are part of the Bus Services Enhancement Fund (BSEF).

Allaying fears that the huge sum from taxpayers would go into the coffers of the PTOs, Deputy Prime Minister Tharman Shanmugaratnam said:

“The $1.1 billion government package, or $110 million per year, is a subsidy for public transport commuters and not a subsidy for the public transport operators. It will improve service levels for commuters, not the profits of the public transport operators.”

Few were convinced by Mr Tharman’s explanation and saw it as a play of words.

A year later, complaints about poor services continue to be raised – and not just with regards to buses but also the Mass Rapid Transit (MRT) system as well. Breakdowns on the train system are now a regular occurrence, in fact.

So, any fare hikes will surely – once again – raise the ire of commuters, given that there have been no noticeable or significant improvements to services. The buses and trains are still as packed, especially during peak hours, and breakdowns continue to plague the system.

Last December, Mr Lui was almost defiant in the face of public outcry following his remarks that fares may have to be increased so that bus drivers’ salaries can be raised.

But raising drivers’ salaries was not the only reason for the possible fare hike, he said. It is also to improve service levels for commuters while keeping operations commercially viable.

“The further improvements we are thinking of, such as even more improved service levels, which will require amongst others more bus drivers and higher salaries, are costly,” he said. “They come on top of various costs increases to the operators, such as rising energy costs. Somebody has to pay for these costs, either commuters in fares, or taxpayers in government subsidies, or the PTOs.”

He added: “[We] should not simply take the populist approach of avoiding any fare increases completely, and just push it onto the PTOs or rely on more and more government subsidies.”

In March, he said the cost of upgrading the transport system “has to be properly shared between the Government, the operators and the public.”

And that is where the rub is – as far as the public is concerned.

With the government having injected S$1.1 billion to help the PTOs operate the new fleet of 550 buses over the next 10 years, some are asking why commuters should once again bear any fare hikes.

In essence, why are commuters asked to fund essentially all the financial needs of the operators – whether directly through fare hikes, or indirectly through government handouts?

Whatever happened to no free lunch, they wonder.

As this writer wrote last February:

Minister of State for Finance and Transport, Mrs Josephine Teo, tried to explain the government’s position at a REACH forum on 22 February.

"Between funding this through a big increase in fares and the government coming in to inject into the system the resources to purchase these additional 550 buses, we thought it is a better thing to do (the latter),” she said.

It is unclear why the government feels it is better for it to inject the resources instead of the PTOs doing so themselves.

While one can argue whether it is the right thing for the government to do, perhaps there is an underlying premise to all this – that the issue of public transportation has become such a hot political potato for the PAP government that it is willing to bend over backwards to assuage public discontent. In trying to do so, however, the government could instead be subjecting itself to a “messy affair” which raises fundamental questions of how the PTOs operate and how public funds are used.

Finally, Mr Lui said in December that the “purpose of fare increases is not to boost the short-term profits of PTOs.”

“It is also not just to improve salaries of bus drivers but to improve service to commuters while keeping public transport operations commercially viable.”

The problem is that there has been no significant improvement in services, although it must be said that some bus services have indeed done better.

However, as long as commuters have to fight to get into a train, or have to squeeze cheek by jowl with others, or wait for more than one train or bus before being able to board, or have to put up with regular breakdowns, any justification for fare hikes based on the claim that services have ‘improved” will meet with ridicule, and anger.

With the public having to bear with an inflation rate which is expected to remain high from now through the next one year, at least, and with the expected hikes in S&C charges, along with rising food prices, Mr Lui has his work cut out to convince the commuting public that a S$1.1 billion injection of public funds – in addition to the annual profit the PTOs are making - is not enough to sustain the operation of the PTOs.

A public transport fare hike will only add to the already heavy burden of an increasing cost of living in S’pore.

No one envies Mr Lui.

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