Boost to improve efficiency of public bus service: Who should foot the bill?

22 Feb

Dear Esteemed Members of the Parliament Committee for Transport,

I wrote earlier in Dec 11 that generous dividends were being paid to shareholders of public transport operators. For Budget2012, Min Tharman announced that $1.1bil will be injected to boost bus services. Govt will fund the majority of the buses to be added to the system while the transport companies will also contribute a portion.

If these companies needed help with their capital reinvestments, then why did they pay out such generous dividends to shareholders in the past years (many who do not take public transport)?

Why should the govt and taxpayers bear the majority burden of boosting bus services when these are listed companies? If these are listed companies, shouldn’t they look to the capital markets for money, such as share placements or rights issue? Would there be an effort to replenish the $1.1bil to state coffers from the transport companies?

Singapore is rather unique in running its public transport companies via a stock exchange listing. Should there be efforts to review this dichotomy?

“Deputy Prime Minister Tharman Shanmugaratnam said Friday that the government will channel $1.1 billion towards increasing Singapore’s bus capacity by 20 per cent over the next five years.

Delivering Singapore’s budget for 2012 in parliament today, Mr Tharman said the ‘Bus Services Enhancement Fund’ will include the purchase of buses and running costs for 10 years.” Asiaone dated 17 Feb

Thank you for reading my queries amidst your busy schedules. I hope you would be able to shed some light on the issue or perhaps bring it up during the Budget debate.


My earlier post on the privatization and dividend policy of SMRT:


7 Responses to “Boost to improve efficiency of public bus service: Who should foot the bill?”

  1. Saycheese February 22, 2012 at 4:18 pm #

    We have been cutting taxes for the rich and increasing GST to help the poor; any wonder why GINI is widening? The taxpayers pay to increase bus capacity so that the rich shareholders can have a bigger profit!
    Seriously, we have to look into the shareholding structures of the transport companies – no surprise if the PAP’s cronies are the main shareholders.

  2. Yamsam February 22, 2012 at 5:22 pm #

    The obvious conclusion from the setting up of this “Bus Services Enhancement Fund” is that the privatisation model for public transportation has failed miserably.

    $1.1B of taxpayers monies have to be injected to public-listed companies to purchase new buses to meet basic service level of commuters. How did we ended up with such a situation ?

    For all commercial enterprises, profit and shareholders returns take precedence over everything else. These companies will utilise their resources in areas where returns are maximsed. Investing in new buses and trains are certainly not high on their list. Expanding retail spaces in bus interchanges and MRT stations are money spinners. If you are the CEOs, where would you invest your limited resources ? Buy a new bus or build a few more new retail shops ?

    Isn’t it quite apparent that the commercial goals are not aligned with the social objectives of the transportation companies ? The sad part now is that taxpayers have to be used to “bail’ out these companies to provide a basic level of service to commuters.

    While I welcome any measures that improve the service level to commuters, using taxpayers monies to “bail” out these companies is certainly not the way to go. After this exercise, do we have to “bail” them out again in future ?

    With the new buses added for “free”, revenue will increase, more profits will be generated to fatten the pockets of shareholders. Is bigger dividends coming their way ? Is this Singapore’s model of private enterprises ? Private profit, public risk ?

    I have always held the view that privatisation model is not appropriate for certain public services such as transportation and utilities (such as water and electricity). I believe the setup of this fund should serve as a background to open up a debate on whether we should nationalise these providers of basic public services.

  3. Alan Wong February 22, 2012 at 7:36 pm #

    This is a very good example of an over-indulging govt getting too involved in all kinds of businesses which should have been better left managed by the private sector.

    By allowing capital expenditure of public listed companies funded by public taxpayers monies, the first question that comes to mind is what kind of hanky panky are they up to ? And who are the secret majority shareholders in the first place to benefit from such a great subsidy ?

    And what about the rest of the public listed companies listed on the SGX ? What is the criteria and where is it going to end ?

  4. Bekko February 22, 2012 at 11:20 pm #

    This will not happen if you have voted in more credible opps into Parliament and deny PAP the 2/3 majority. They can just roughshod anything in Parliament now.

    So repent Singaporean for not doing your duty in GE2010.

  5. Daft Singaporean February 23, 2012 at 9:57 am #

    Only in Singapore…GLC get double bites of the cherry and the people get screwed twice over. After using the government fund to upgrade the buses, the PTC will approve another round of increase in fares because of higher operations cost due to upgrading. That’s the double wammy for the people.

  6. everyday bus taker February 24, 2012 at 9:39 am #

    I don’t owe any shares and I take the public transport everyday. I just hope I have a better bus ride everyday. This $1.1bil over ten years is well spent if services really improve and bus fares stay constant.


  1. Daily SG: 22 Feb 2012 « The Singapore Daily - February 22, 2012

    […] – Unbranded Bread n Butter: Boost to improve efficiency of public bus service: Who should foot the bill? […]

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