Transport Minister Khaw Boon Wan said in Parliament on last Friday (18 May) that when a transport system is very unreliable, that is the time to pump in more resources into the system and the operating company cannot be punished by reducing fares.
This was in response to parliamentary questions from Non-Constituency MP Dennis Tan on whether rail reliability and service standards can be captured in the new fare formula which determines how much commuters pay for public transport.
The new public transport fare formula, which was scheduled to start at the end of this year, does not factor in reliability and service standards. But Mr Khaw said he will personally ‘see to it’ that operators maintain such standards.
The Minister for Transport said: "Even though it's not in the fare formula, I deal with it directly myself through the sort of focus and pressure I exert on the operators to make sure the rail reliability is brought about because that is my priority. And I'll see to it that it happens, whether or not it's included in the fare formula.”
When Mr Tan suggested to add a reliability component to the fare formula to penalise operators through lower fares for not performing up to standard, Mr Khaw said, “It could worsen the situation.”
"When a system is very unreliable, in fact that is the time to pump in more resources ... and if you punish them through reduced fares, you are withdrawing resources from the operators and you'll be doing exactly the opposite. The wrong thing. Rail reliability is important but deal with it separately," Mr Khaw said.
Mr Khaw also said that the new fare formula includes a new component, the Network Capacity Factor (NCF), which addresses service standards, although indirectly.
"For example, if we do not expand the rail network but demand grows, as it happened a few years back, resulting in crowded trains, then the NCF will be negative. That means everything being equal, the PTC (Public Transport Council) will be asking for a reduction in fares. ... If things improve through more comfortable rides but costs go up, then the factor is positive," he said.
Mr Khaw reiterated that it is not possible to improve the public transport system without recruiting more manpower such as bus and train drivers, engineers, technicians and mechanicians.
"(But) all those things come with money and I really hope Singaporeans understand that I want to do my job well so that we can have a first-class transport system and we will get there.”
"But I do need money because it is not realistic to hope that you get a first-class, reliable train with no need of any injection of resources," Mr Khaw added.
Mr Khaw said the funding would have to come from either taxpayers through subsidies or commuters through fares. He added, “The PTC has been tasked to balance the interest of both sides.”
With regards to Mr Khaw’s thoughts, readers made many interesting comments on CNA's Facebook page.
RicHard Goh wrote: When my work performance is unreliable, in fact that is the time my boss sld pump in money to increase my pay...
Stanley Tan wrote: All the bosses in Singapore better listen carefully, if your employee screw u up, don't deduct their salary hor.... In fact, u still need to increase their salary...
Ong Liang Wei wrote: Really? Up your train standard first before raising fares Why must commuters be penalised for the bad services ? You don’t hear of anyone going back to same stall when they have the lousy service right ? Linking service to reliability is correct . By not doing that , the system will only gets worst.
Shu Kai Hu wrote: When the restaurant serves lousy food, I don’t go back the second time, pay more to expect better tasting food.
Cj Leo wrote: It can also be argued that by not linking fares to performance like reliability, we could very well be encouraging the management to slacken. For example during period of frequent breakdowns and the fares are increased. This will be rewarding bad performances. Mr Khaw, your thinking is not right.
Valen Chen Tany wrote: The first minister in a developed country who recommend rewarding unreliable operator with more resources...what a load of baloney. In fact it smacks of some fishy business. My country is becoming more ridiculous.
James Fong wrote: When a restaurant cook sucks, patrons won't return. So it is either u change the chef or change the owner and not increase the pay of the chef in hope of better culinary skills
Jack Chan wrote: Why is the system very unreliable in the first place ? The people unrealiable ? The hardware unrealiable ? the system unreliable ? the management unreliable ? ... or any others. Have you presented the hard facts prior to making this statement ? If no, kindly share with us. Otherwise, it becomes a sweeping statement that does not justify for price increase.
Tean Kwoon Chia wrote: Go to Japan to study their culture & attitude there after change your mindset & adopt some good points to implement it. Remember in the late 70S Japanese QCC is so effective.
Scott Tan wrote: There is no iron in this minister. If it’s LKY he will just say either you improve your reliability or I will change the team. No other words needed. Why all these ministers keeps explaining and explaining??
Denny Liao wrote: Of course they are afraid to link fares with reliability.. With current reliability level, the reasonable fare is.. free. In fact, on certain bad days, they should pay us to ride..
Uma Vicnesvare wrote: Basic economics: people pay less for bad service. You only pump in more money into something that is doing badly when it is government-driven. not when it is a service run by for-profit companies that are paying themselves millions and giving their shareholders profits!
Darius Chong wrote: No wonder the SMRT train service is so unreliable and from bad to worst because the minister has such ridiculous thinking. Why should commuters pay more for a substandard service?
Daniel Tts wrote: It has becoming a habit to use money to solve major problem in Singapore. When thing aren’t right, it is time for rising price again..is this a trend in Singapore politics nowadays?
Chansim Lim wrote: Low fare does not means low reliability. He sound like if you take those low cost airline. Safety is on your own. Take note ticket cost/fare price include investment of hardware, maintenance etc. If the company cannot make these target. Then it is either poorly managed or cost calculation is missed. Both cases, management team is to hold responsibility. Not consumer.
Keith Low wrote: Nowhere in the world has a company been guaranteed profit even when product/servicd reliability is in question except SMRT.
Keith Wee Kheng Leong wrote: If a restaurant’s / business’s or minister’s service is below acceptable, it’s only logical to not dump in money or generals recklessly to turn it around. I don’t think anyone earning a clean wage expects a pay raise for underperforming either.
Nick Pedro wrote: What a crap is this? What drama is this? Hello. If the operator cannot handle it is OUT! Don’t bid and later complain about resources and pump in public funds. If you cannot have a reliable contractor at all. Lull off the plug on MRT. Shut it down, before we go deep in problems and find excuse more and more often . Minister cannot handle it, ask him to retire, and move back to Malaysia.
Andy Yeo wrote: This is the current PAP mentality ... nothing amazed me at all ... EXPECTED! But forgot to tell them, my vote will do the saying when the election comes! Don't beg me please!
Song Moh Chia wrote: KPKB now you are implying that if public wants reliable transport system they must pay more? Every time PAP Ministers talk it is always money related.
Philip Wong wrote: Is this chap even talking sense now? Yes, please don't KPKB if your expensive car is very unreliable, and by your logic, pay more for it instead. Do be reminded that you're leading LTA and should be on the commuter side who paid your salary, not SMRT which failed to meet the mark repeatedly! Oh wait, I forgotten you don't take public transport unlike most average sinkies and don't feel the pain! #firekbw #tokcocksingsong #outoftouch
Andrew Chua wrote: In the first place they paid top dollar for below average work done.. they should just suck it up and pay for their own mistakes instead of making commuters pay. Secondly the public already lost their trust in the system, what makes it different that this time the budget will be well spent? Think singaporeans stupid for trusting you again?
HM Soh wrote: Its only fair to passengers that the fares are directly related to the reliability and performance of SMRT in its delivery of its services. Merit based system! Its atrocious to make us continue to pay the same fares when your major mrt lines take turns to break down on alternative consecutive days. We need a better leader to lead this Transport portfolio. And please, someone who is down to earth, takes the train on a daily basis and knows the pains of the people on the ground. Not someone who is all talk only and knows nuts about how people feel.
Colvis Tan wrote: they like to talk about $ increase fares why cant passenger ask for refund and PTC to imposed higher fines to SMRT and that KHP to clock distance of non breakdown to be reset if door or breakdown back to zero. and no quarterly bonus and GDP bonus. stop them from getting that benefits if that quarter there breakdown.
Victor Ho wrote: Similarly when the construction is lacking of safety measures or skill resulted in collapse of structure, death or injury.. why fine them heavily...That is the time for them to pump in more resources $$$ ... to work towards improvement...
Melvin Chiam wrote: Full of nonsense .... look at Japan... openly they apologise when train screw up ... even early also consider screw up... KWB did u even apologise? Pump in resources u number 1.
You Beng Yap wrote: Please go take a loan from banks. Reduce bonuses. Use your company reserve. Do you think private companies up their product prices so that they can solve their systemic problems?
Kelvin Rongzhen wrote: Temasek holding never pump money to invest in you meh? Maybe they should start.. or did they? where all the money go?
Xu Youqing wrote: Kinda explains why the CEO pay is going up despite the unreliability. I'd love to have KPIs like this. SMRT is the best employer. No doubt.
Nur Halimah wrote: This is the best news ever!! Gonna show my boss that the mistakes I’m gonna make at work will justify my pay raise, puny one at that. – Fad
Edison Chan wrote: My respect to you, Minister Khaw, I suggest you take a basic course in economics to understand good service get to be at higher price whereas poor service deserve lower price.
Only a few readers commented positively to Mr Khaw’s idea, but not wholly:
Zack Lim wrote:
Seriously I am saying this as objectively as I can. We all know there are PROs and CONs in privatising some of the traditional govt services such as public transport, and we (the people) have supported your decision to do it for many years already.
But when it has consistently failed us for many years while the operators continue to demand for higher fares, more government funding and yet pay super high bonuses to the leaders (I know your so called logic behind these but sorry I dont completely agree)... If our govt needs to take back this responsibility, please DO IT and we will all support you. In many countries, in some specific situations, it had been very beneficial for governments to take control of certain services and industries when there is a need to. I am not saying we need to move back towards socialism and further from a free market, but everything has to be taken into consideration in its CONTEXT!
All these public transport problems are really getting out of hand despite your best efforts, the next steps are very very obvious already. Just take them back. (I feel bad too that those corporate blood suckers had bleed us and fed themselves, leaving us a mess now to take over, but we can't change the past now, we can onlt stop them from doing more harm.)
If you dare to make this move, I for one will support, and I'm sure many of us will cheer for this decision and band together to make our public transport better again. (Then again I am no expert in this field, please pardon me if I had said anything wrong, this is just my own layman's opinion.)
Huiting Ashlyn wrote: It is true that increased resources are required to enhance the standards but the resources could be taken from the company's equity. Why does it have to come from the commuters instead? It does not make sense at all. In that case, how does SmRt punished itself for its own bad performance and how does it justify to the public for increasing its fare despite despite its deteriotating service?!
Andrew Tang wrote: Totally agree but dun increase fare,cancell the T5 and ECRL project that is wasteful and channel the resources to smrt
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