The Reform Party

A Brighter Future Tomorrow, Today.

Reform Calls on the PAP Government to Explain Why They Have Been Unable to Fix the Public Transport System Despite Spending Tens of Billions of Dollars without Proper Accountability

Published: 8th July 2015

Yesterday’s collapse of both the North-South and East-West Lines for several hours is graphic evidence that the Government is still no nearer fixing the serious problems with the MRT that first appeared in December 2011. Last night’s breakdown was even worse than the one in 2011 since it affected both lines at the same time. Worse still it is evidence of the lack of accountability and conflicts of interest that affect the PAP Government at all levels and indication that the Government’s $60 billion of investment in new MRT lines is giving Singaporeans poor value for money.

From state media reports the cause of the breakdown appeared to be similar to the one that had caused the shutdown of the entire system in 2011. The Committee of Inquiry report in July 2012 found the cause to be sagging of the third rail (which carries power to the trains), caused by defective fasteners, which damaged the trains’ Current Collector Devices and caused the power transmission to fail. The COI report catalogued a sorry tale of incompetence in SMRT and Land Transport Authority (LTA) senior management with seemingly little understanding of the division of responsibilities between the two. LTA are supposed to pay for and manage the infrastructure of track and signalling while SMRT run the actual train services and collect revenue.

In many instances, the trains’ back-up batteries failed to function for the prescribed time leaving the stranded trains without power or ventilation. Astonishingly, SMET had not been conducting regular maintenance checks on the batteries. In addition SMRT was going through the motions of maintenance but had not implemented several checks that were prescribed when the MRT lines were first completed.

When the crisis occurred there was little familiarity among the SMRT staff with the emergency procedures and often overlap and confusion between SMRT and LTA as to where responsibility lay. What emergency bus services were laid on were wholly inadequate with chaotic scenes of hundred, even thousands, of commuters thronging bus stops but being unable to board.

From the state media reports the same problems appear to have occurred last night. Emergency power supplies to the stranded trains were inadequate, there was chaos at the stations and no announcements were made to passengers on other parts of the transport system such as the Circle Line not to travel to NS or EW Line stations. Emergency bus services were just as inadequate with hundreds queuing for each bus.

Reform Calls for a Fresh COIReform therefore demands that the PAP Government convene a fresh Committee of Inquiry (COI) to investigate the causes of last night’s breakdown. As the Government owns SMRT through Temasek’s majority stake and also regulates it, through LTA there is a serious conflict of interest. We therefore need the COI to be chaired by someone outside the Government and the public transport industry, preferably a foreign expert who has experience with running a world-class public transport system. The new Committee should report on whether the previous COI’s recommendations were implemented in full and if not, why not.

Reform Calls for an Independent Regulator

As we have said several times there is a fundamental conflict of interest in having LTA regulate and investigate SMRT when both are arms of the Government, You cannot have the owner of the transport system also control the regulator which is responsible for seeing that the transport companies meet service standards. LTA is what is called a captive regulator. Its decisions will be influenced by the interests of the owner of the transport system (the Government) not of commuters.

SMRT is a publicly listed corporation but Temasek owns the majority stake and appoints the CEO and senior management. LTA builds and leases the infrastructure, including stations, track, signalling and rolling stock to SMRT and SBS Transit (which operates the North East Line). SBS Transit is a subsidiary of Comfort Delgro, which is closely connected to NTUC and has several ex-civil servants, Temasek executives and PAP MPs on its board. The division of responsibility between the transport companies and LTA is not clear even to the staff of both entities as shown by the confusion in 2011 over who was running the Operations Command Centre in the crisis. This confusion seems to have recurred with this breakdown.

Regulatory Sanctions Are a Meaningless Wayang

When LTA fines SMRT for service outages, as it did in 2014 to the tune of $1.6 million, the majority shareholder of SMRT feels no pain because it is just a transfer of money from one Government pocket to another. LTA will be unable to take bold decisions to inject much needed competition into the system or to prevent the operators from abusing their dominant position because of its dual role.

Reform Asks the PAP Government to Justify Its $60 Billion Investment Programme and Provide Accountability

 At the same time as Singaporeans are short-changed by poor service standards and frequent breakdowns the PAP are investing unprecedented amounts in building new MRT lines. Yet the PAP have not proved they have the expertise to run the existing transport system to a high standard.

The PM has mentioned a total investment of $60 billion. Budget 2015 showed the total costs of major projects, including the Circle, Downtown, and Thompson lines and expansion of the NE and NS lines coming in at over $56 billion. We have seen no cost-benefit analyses of the economic gains to justify such large investments. To put them in context they could finance ten years of our proposed social investment programme of $6 billion p.a. ( See SG50: Its Time for Reform).

With such large sums being spent how can Singaporeans be sure that there is proper accountability for the money spent and that fraud and mismanagement do not inflate the costs? When the PAP Government maintains an obsessive culture of secrecy and there is effectively no Opposition in Parliament how can there be proper oversight? Do we really need so many expensive MRT lines when technological developments just over the horizon may make them unnecessary?

We are concerned that the PAP Government is getting Singaporeans to pay through the nose, by foregoing social expenditures like health, education, child benefit and old age pensions, which should be theirs of right as citizens of a rich city, to finance the infrastructure necessary for a big expansion in the population. As usual Singaporeans will pay for a rise in the number of foreign workers to allow our total population to rise to eight to ten million.

Reform Calls for More Competition and for the Consideration of New Options

 At the moment Singaporeans are getting the worst of both worlds. We have a state-owned monopoly of public transport masquerading as a corporatized entity that has fooled Singaporeans into thinking that public transport has been privatized. Without competition to keep the operators efficient private shareholders serve no purpose. There is no spur to greater efficiency, lower costs and higher service standards.

In fact the PAP Government is subsidising the private shareholders of SMRT and SBS as shown by the share price jumps when it assumed the risk of operating the bus services. This should not have been done without forcing the operators to pay the Government, i.e. the taxpayer, for taking this burden off their hands.

The Government failed to explore whether it was possible to introduce greater competition into bus services and to allow them to compete directly with the MRT. A small amount of limited competition has been introduced by allowing foreign operators to tender for some of the bus service packages but this has not gone far enough.

Finally the Government should be considering rapidly changing technologies and the effect this will have in providing a better public transport system. These include driverless cars and buses, ride-sharing apps and minibuses that ply certain routes and can be summoned by using a smart phone. With its huge investment in existing technology the PAP Government will be hostile to new technology that may cannibalize their existing revenues. The Government is also more or less committed to big population increases and expansion in the numbers of foreigners to provide the densities that will make their huge fixed investments economically viable.

Singaporeans are getting the worst of both worlds: poor service standards with little or no accountability from the PAP plus continuing and unnecessary austerity to pay for a massive public investment programme that will chiefly benefit foreign workers and the next generation. It’s time for Reform!

 

Kenneth Jeyaretnam

Secretary General