Opinion
SMRT privatization: Shielding information or strategic restructuring?
In 2016, SMRT was privatized to focus on long-term goals over market pressures, aiming to enhance rail maintenance and service quality. Yet, recent severe disruptions question if this move obscured vital operational details from public view.
In 2016, the privatization of SMRT under the ownership of Temasek Holdings was defended vigorously with promises of greater focus on long-term strategic goals rather than short-term market pressures.
This move was touted as a necessity to enable SMRT to tackle the evolving challenges of Singapore’s public transport needs, particularly the maintenance of an ageing rail system following the 2011 breakdowns that saw the resignation of Saw Phaik Hwa, who prioritised on the development of the transport, company’s retail business and skimming on maintenance expenses.
Temasek, in its announcement, said, “Privatisation will provide SMRT with greater flexibility to focus on its primary role of delivering safe and high-quality rail service, without short-term pressures of being a listed company, in the midst of its transition to a new regulatory framework under the New Rail Financing Framework.”
However, with recent developments, particularly the massive 2023 rail disruption that we are seeing for the East-West Line, questions arise: Has privatization truly served its stated purpose, or has it instead cloaked critical operational details from public scrutiny?
Transparency and Its Implications
The annual reports published by SMRT before and after its privatization tell a tale of changing transparency levels.
Pre-privatization, the 2016 report was replete with details about executive remuneration, specific maintenance expenditures, and breakdowns of revenue and expenses.
Such transparency empowered stakeholders to understand where and how funds were being allocated, particularly towards crucial maintenance operations and how much the top executives were being paid.
Post-privatization, after being delisted from the Singapore Stock Exchange, these details have become conspicuously sparse.
The 2023 report, for example, lacks detailed disclosures about how much is spent on maintenance and whether these activities are handled in-house or outsourced to subcontractors.
What we have now is just a chunk of text outlining SMRT’s policies on remuneration and maintenance.
Such omissions not only cloud stakeholder understanding but also prevent the public from assessing whether the transition away from public markets has led to better or worse management practices.
Recent Disruptions and Maintenance Oversight
The recent and severe disruption along the East-West Line, which involved extensive rail damage due to alleged maintenance failures, sharply contrasts with the purported benefits of privatization.
The lack of detailed financial reporting makes it difficult to verify if appropriate investments are being made in maintenance or if cost-cutting measures have led to reduced direct oversight and increased reliance on potentially less accountable subcontractors.
Discussion on Reddit recalled remarks made by SMRT Corporation Chairman Mr Seah Moon Ming in a June 2023 interview with The Straits Times.
He stated, “We never want to undermaintain because, in the past, it was an issue. But neither do we want to do overmaintenance.”
At that time, the 67-year-old emphasized the need for high performance while also considering costs. The Straits Times even boasted about the significant improvement in SMRT’s train services since his appointment.
The ST even boasted about the reliability of SMRT’s train services has improved significantly since his appointment.
While acknowledging that SMRT can always improve, Mr Seah cautioned against excessive efforts to achieve ever-higher reliability scores, citing the risk of overspending public funds received through government grants.
Mr Seah mentioned that SMRT is leveraging technology such as data analytics to optimize its maintenance regimen and better predict when components need replacement. He noted that SMRT’s rail lines have consistently achieved a mean kilometres travelled between failures (MKBF) of over one million train-kilometers—a recognized international measure of rail reliability.
Separately, SMRT Group Chief Executive Mr Ngien Hoon Ping, who was appointed in August 2022, stated that the one million MKBF benchmark is sufficient from a regulatory standpoint. The former LTA chief noted that raising this bar yields diminishing returns and could be prohibitively expensive.
“If 99.9 per cent of the time the train is going to work, commuters will take the train. Once you reach one million MKBF, it is about there already, ” Mr Ngien said.
So, what does Mr Seah’s position entail for the maintenance regime? When he says that SMRT does not want to do over-maintenance, how much more or less have they actually spent on maintaining the rail system?
We don’t really know, given that financial details have been omitted from the transport company’s annual report following its privatization.
A Call for Rebalanced Priorities
While the motive to shield SMRT from the volatility of public markets might have been well-intentioned, the resulting lack of transparency has significant repercussions. It impacts not just investor confidence but also public trust, as they can only speculate with the limited information available, especially when failures lead to substantial service disruptions like the ones we are seeing today.
For privatization to be genuinely effective, it must be paired with a commitment to transparency that reassures the public about the responsible management of their critical transport services.
As SMRT faces the most severe breakdown in Singapore’s transport history, it faces the imperative to disclose more, not less, about its maintenance regimes, staffing, and the deployment of resources to ensure the reliability and safety of its services.
Opinion
Iswaran unlikely to serve full 12-month sentence under conditional remission and possibly home detention
Former Transport Minister S Iswaran is unlikely to serve the full 12 months of his sentence. Under Singapore’s Conditional Remission System, he could leave prison after serving less than eight months, with the remainder of his sentence served under strict supervision, including home detention. While Iswaran is scheduled to surrender on 7 October 2024, there is a possibility of an appeal.
Former Transport Minister Iswaran was sentenced to 12 months in prison on 3 October 2024 for accepting valuable gifts while in public office and obstructing the course of justice.
The court granted Iswaran’s request to surrender himself at 4 p.m. on 7 October 2024 to begin his sentence. However, his lead lawyer, Davinder Singh, indicated that the start of the sentence could be delayed depending on “instructions,” hinting at the possibility of an appeal.
However, despite the 12-month sentence, it is highly likely that Iswaran will serve less time in prison due to Singapore’s Conditional Remission System (CRS) and potentially the Home Detention Scheme (HDS).
Under the CRS, prisoners in Singapore may be released early if they demonstrate good behaviour.
Typically, under the CRS, inmates are eligible for release after serving two-thirds of their sentence. In Iswaran’s case, this means he could be released after serving eight months in prison, with the remaining four months of his sentence subject to a Conditional Remission Order (CRO).
The CRO, a legal mechanism that enforces strict conditions post-release, requires compliance with several terms, such as reporting to authorities and avoiding any criminal activity. If Iswaran violates these conditions, he could face penalties, including being sent back to prison to serve the remainder of his sentence.
Alongside CRS, there is also the possibility that Iswaran could serve part of his sentence under the Home Detention Scheme (HDS), which allows prisoners to serve their final months under strict supervision at home.
Take the case of former Singapore Civil Defence Force (SCDF) Chief Peter Lim Sin Pang, for example.
Lim was sentenced to six months in prison in 2013 for corruption.
After serving three months in Changi Prison, he was supposedly placed on home detention for one month — if we consider how CRO grants him two months of remission — allowing him to complete his sentence under supervision.
Home detention meant that Lim would spend his remaining sentence at home under electronic monitoring, fitted with an electronic monitoring device, typically worn as an ankle bracelet, which allows authorities to track his location at all times.
Like other inmates under the HDS, his movements were tightly controlled, and he was allowed out only for specific activities, such as attending work, medical appointments, or rehabilitation programmes, during limited hours.
Any deviation from the permitted activities or failure to return home on time could lead to immediate consequences, including being returned to prison to complete the sentence.
Eligibility for home detention depends on various factors, such as the inmate’s behaviour during incarceration and the level of risk they pose to society.
This scheme aims to reintegrate prisoners into society while maintaining strict oversight.
If HDS is applicable, Iswaran might spend even less time behind bars, as he could transition to home detention before completing the full period under the CRS.
Opinion
Why the silence by Minister Shanmugam on his S$88 million property sale?
Despite being quick to rebut allegations, Minister K Shanmugam has remained silent on the S$88 million sale of his Good Class Bungalow (GCB) in August 2023. The lack of public commentary, especially given the potential conflict of interest with the Singapore Land Authority’s role, raises questions.
When it comes to addressing allegations, Minister for Home Affairs and Law, K Shanmugam, has shown he can respond swiftly and decisively, as seen in his and Dr Vivian Balakrishnan’s rapid legal actions against Mr Lee Hsien Yang (LHY) for defamation, as well as their recent rebuttal to LHY’s statement regarding the defamation costs paid to the two ministers.
However, the stark contrast in how Mr. Shanmugam has handled recent revelations about his own financial dealings, and his silence regarding the S$88 million sale of a Good Class Bungalow (GCB), is puzzling and raises concerns about transparency and potential conflicts of interest.
TOC had earlier disclosed that Mr Shanmugam sold his GCB at 6 Astrid Hill for a staggering S$88 million in August 2023.
The sale was to UBS Trustees (Singapore) Ltd, a transaction managed by legal professionals from his former law firm and concluded without any encumbrances like a mortgage. This deal turned a home bought for S$7.95 million into an S$88 million sale—garnering a massive profit.
This sale was made just a month after he made his ministerial statement explaining the circumstances of his leasing of the massive black-and-white bungalow estate at 26 Ridout Road from the Singapore Land Authority (SLA), a statutory board that he oversees as the Minister for Law.
This transaction, particularly the identity of the buyer and the approval process for such a high-value sale, is of public interest because GCBs are subject to stringent sale conditions.
They are generally only sold to Singaporeans or approved Permanent Residents who have made significant economic contributions to Singapore. The approval for such transactions typically comes from the SLA.
This raises an inherent question: Why has Mr Shanmugam not addressed the public regarding this substantial financial transaction, especially when such approvals could potentially involve his direct oversight? We have written to him for his comments but were met with silence.
We do not know who the actual beneficiaries of the property are, as it was sold to ‘The Jasmine Villa Settlement,’ a trust managed by UBS Trustees. The beneficiaries could be Singaporeans, foreigners, or a mix of both.
His silence is notable because it contrasts sharply with his and other ministers’ rapid responses to allegations made by LHY.
The potential conflict of interest in the sale of the minister’s GCB is similar to earlier concerns about his rental of a black-and-white property at 26 Ridout Road, which also involved the SLA from which he has said to have recused himself from decisions made. Notably, the government has also cleared him of any wrongdoing.
The lack of public commentary from Mr Shanmugam about the sale of his GCB, despite the potential need for SLA’s approval, and the silence from the mainstream media on this revelation, merit scrutiny.
The public deserves to know:
- Who was the buyer and, if the buyer is a non-Singaporean, who approved the sale to UBS Trustees and under what criteria? Especially since GCBs can only be sold to Singaporeans or Permanent Residents who have not only been resident in Singapore for over five years but have also made exceptional economic contributions—a criterion subject to the subjective approval of the authorities.
- Was there any conflict of interest given the minister’s role over the SLA? This is particularly pertinent given that the SLA, which falls under the purview of the Ministry of Law, would typically be involved in approving such transactions if the buyer does not meet the usual criteria. Moreover, given the huge sum involved in the transaction, extra scrutiny is warranted, especially as Mr. Shanmugam is a public servant holding significant power.
- Why has there been no public statement from Minister Shanmugam on this matter, especially given the rapid response to defamation accusations? His silence contrasts sharply with his prompt responses to other public issues, raising questions about consistency and transparency in handling personal financial dealings versus public allegations.
Minister Shanmugam’s transparency in this matter would reaffirm public trust and ensure that his actions as a minister do not conflict with his personal financial dealings.
His response, or lack thereof, will significantly influence public perception of his commitment to transparency and accountability in his official capacities.
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