Aljunied GRC MP Cynthia Phua said, in parliament yesterday, that public transport companies could consider delisting or become co-operatives to serve the public better.

Her remarks were founded on the basis that these companies faced the dilemma of serving the interests of the public and that of the shareholders.

Singapore's transport system is run by a duopoly, SMRT and SBS Transit, both of which are listed on the Singapore Exchange. SBS Transit's parent company Comfort DelGro is also SGX-listed.

I couldn't agree more – it would be beneficial for consumers that the money that these two companies earn does not go into lining the pockets of shareholders in the form of dividends, but put back into improving the transport system.

“The primary profit-making objective of these listed transport companies was a reason why transport fares increased even though the companies are in the black,” she is quoted as saying.

Which is true, SBS transit reported in its outlook statement for Q3 that 'The fare increase effective from 1 October 2006 is expected to improve both bus and rail revenue.'

However, ComfortDelGro, which owns 75% of SBS Transit, might not be so keen to agree.

It derives about 60% of revenue from the Singapore market, which is inclusive of not just the trains and buses deployed by SBS Transit, but also taxis, car rentals, automotive and engineering services and outdoor advertising.

The rest comes from overseas ventures.

If its subsidiary SBS Transit were to become a co-operative, it will have to look for other avenues to derive revenue.

And it might not be able to pay the 3 cents dividend it paid shareholders last year.

Yet, with the proposed hike in the GST, the notion of turning the transport companies into co-operatives might not be such a bad idea after all.

Consumers won't have to contend with them (the transport companies) applying to the Public Transport Council to increase transport fares annually.


Desiree Pakiam