The bus hub: don't penalise public transport companies
Any move to get people out of cars and into public transport ought to be congratulated, for all the stated reasons: less congestion, less pollution, cost savings, and so on. It is unfortunate, however, that it's the shareholders of the public transport companies, meaning SMRT, SBS Transit and, by extension, ComfortDelgro, which will ostensibly carry the can for these initiatives. This is because greater competition for routes among various transport operators, while downward pressure on fares and raised expectations for higher quality service will inevitably be borne by the transport operators themselves.
Clearly, solving transportation bottelnecks is not easy. Otherwise cities such as Bangkok and Manila would have found solutions long ago. Increasing taxi fares has already prompted commuters to switch to public transport to some extent, as can be seen by the queues of taxis (not commuters, as was the case in the past) in the CBD, and the long snarls of taxis now at the airport. Raising acquisition and operating costs of cars has undoubtedly helped Singapore, too, although you wouldn't know it heading down the AYE at 7:45 in the morning. The only way to tackle the public transport issue fully, in my view, is to take away from cars the one thing which prompts people to choose them over public transport in the first place: convenience.
Many years ago, when I hosted the morning drive-time program on 938LIVE (then called NewsRadio 93.8), we posed the talkback question: what will it take for you to take public transport? One caller rang to say he would take the bus or train to work in the morning if he could get a seat. I asked him in reply, what the likelihood of this was? He said, very slim. As a result, he said, he would unlikely ever take the bus or train.
Cars allow people to move freely (traffic jams permitting), without being beholden to specific routes, and at a time of their convenience, without being beholden to timetables. Prevent cars from travelling to certain areas or at certain times, or both, and public transport will be the natural alternative.
Clearly it'll be difficult to give everyone a seat on every bus and train, but here are a few suggestions we can take the incentive away from cars, without hitting shareholders in the three public transport companies:
1. Turn Orchard Road into a pedestrian mall. Take away the convenience of cars and people will have no choice but to go (and they will still go, once all the refurbishments under the government's regeneration program are complete) using public transport. Such as the MRT. Or a single two-directional electric bus service. Or something similar. Make it stretch from Scotts Road to Buyong Road, or even past the Meridien Hotel.
2. Make bus services free in some areas. A government subsidy to allow anyone travelling from the harbour end of Anson Road to the Fullerton Hotel to ride for free will undoubtedly remove the incentive to drive out for lunch. It worked wonders down Adelaide and St. George's Terrace in Perth. In my view it can work in Singapore.
3. More direct routes. To be frank, the whole idea of feeder buses that deliver people to the MRT is a waste of time. Meanwhile, take the 157 any time from Toa Payoh to Boon Lay and you soon realise how good a 90 minute nap on a bus can feel. Again - make the bus routes more convenient than cars.
4. Privacy booths. This is a long shot, but taking the train gives you a lot of time to do work without uninterruption. If only you could use your mobile phone without a dozen other people listening in. How about (glass) booths to allow you to get stuff done in private. They could be chargeable.
There's no shortage of ideas. But central to the theme has to be: penalise car usage, not the bus and train companies.
Mark Laudi
Clearly, solving transportation bottelnecks is not easy. Otherwise cities such as Bangkok and Manila would have found solutions long ago. Increasing taxi fares has already prompted commuters to switch to public transport to some extent, as can be seen by the queues of taxis (not commuters, as was the case in the past) in the CBD, and the long snarls of taxis now at the airport. Raising acquisition and operating costs of cars has undoubtedly helped Singapore, too, although you wouldn't know it heading down the AYE at 7:45 in the morning. The only way to tackle the public transport issue fully, in my view, is to take away from cars the one thing which prompts people to choose them over public transport in the first place: convenience.
Many years ago, when I hosted the morning drive-time program on 938LIVE (then called NewsRadio 93.8), we posed the talkback question: what will it take for you to take public transport? One caller rang to say he would take the bus or train to work in the morning if he could get a seat. I asked him in reply, what the likelihood of this was? He said, very slim. As a result, he said, he would unlikely ever take the bus or train.
Cars allow people to move freely (traffic jams permitting), without being beholden to specific routes, and at a time of their convenience, without being beholden to timetables. Prevent cars from travelling to certain areas or at certain times, or both, and public transport will be the natural alternative.
Clearly it'll be difficult to give everyone a seat on every bus and train, but here are a few suggestions we can take the incentive away from cars, without hitting shareholders in the three public transport companies:
1. Turn Orchard Road into a pedestrian mall. Take away the convenience of cars and people will have no choice but to go (and they will still go, once all the refurbishments under the government's regeneration program are complete) using public transport. Such as the MRT. Or a single two-directional electric bus service. Or something similar. Make it stretch from Scotts Road to Buyong Road, or even past the Meridien Hotel.
2. Make bus services free in some areas. A government subsidy to allow anyone travelling from the harbour end of Anson Road to the Fullerton Hotel to ride for free will undoubtedly remove the incentive to drive out for lunch. It worked wonders down Adelaide and St. George's Terrace in Perth. In my view it can work in Singapore.
3. More direct routes. To be frank, the whole idea of feeder buses that deliver people to the MRT is a waste of time. Meanwhile, take the 157 any time from Toa Payoh to Boon Lay and you soon realise how good a 90 minute nap on a bus can feel. Again - make the bus routes more convenient than cars.
4. Privacy booths. This is a long shot, but taking the train gives you a lot of time to do work without uninterruption. If only you could use your mobile phone without a dozen other people listening in. How about (glass) booths to allow you to get stuff done in private. They could be chargeable.
There's no shortage of ideas. But central to the theme has to be: penalise car usage, not the bus and train companies.
Mark Laudi
Labels: comfortdelgro, public transport, SBS Transit, smrt
Fare Hike: SMRT Shareholders Penalised Again
The Public Transport Council uses a fairly vague financial ratio to decide not to grant the Singapore MRT an increase in fares. So we decided to do a comparison of a variety of other ratios to see whether this yardstick stands up to scrutiny. Our conclusion is that ROTA is not only not useful. It is unfair to punish SMRT for being an efficient, profitable company.
The PTC said in granting SBS, but not SMRT, the right to increase fares by up to two cents it used the Return On Tangible Assets (ROTA) as a "reality check". This measures how much money the company makes based on the value of its trains, equipment and other sellable, tangible assets. According to Reuters data, SMRT has a ROTA of 11% while MTR Corp's is 6.7%. In terms of gross profit margin, last financial year MTR Corp's was a hefty 81.1%, but outpaced by SMRT's 89.8%. At best, all this means is that SMRT is better managed, not that it is gouging consumers.
On a cashflow basis – always our preferred yardstick – MTR is actually performing significantly better than SMRT: S$0.37 compared to SMRT's S$0.18. But even so, this depends on the number of shares on issue.
Let's check out some other ratios, based on Reuters data and a HKD-SGD exchange rate of 5.148:
Revenue growth (last financial year)
MTR Corp: 4.24%
SMRT: 4.41%
Revenue per share
MTR Corp: S$0.34
SMRT: S$0.51
Net earnings per share (a fairly useless but commonly-accepted accounting standard, but let's use it anyway for now):
MTR Corp: S$0.27
SMRT: S$0.09
Dividend per share (last financial year)
MTR Corp: S$0.08
SMRT: S$0.07
Book value per share
MTR Corp: S$2.70
SMRT: S$0.42
Total revenue per employee (last financial year)
MTR Corp: S$282,454
SMRT: S$132,938
We could go on and pick probably a dozen other ratios, but what does this list tell us?
In short, pretty much nothing.
The reason is that while SMRT and MTR Corp are both light rail operators in city states, that's just about where the similarity ends. MTR Corp is a S$24.8 bln company, almost ten times the size of the SMRT's market capitalisation of S$2.6 bln.
Further, MTR Corp has many more people to serve than Singapore, based on population size alone.
In my view, the much better yardstick would be to look at the inflation rate, to see how much of an impact the fare increase has on the average consumer. Is the fare increase going to hurt people's hip pockets? That should be the ultimate question, not whether a company is so well run that it is efficient and profitable.
Two cents is pittance, really, but the principle counts. They are robbing Peter to pay Paul, by penalising shareholders to appease commuters. If you take this attitude, it would be better for the SMRT to be less-well run. With a lower ROTA, it would be granted fare increases more readily.
Or take SMRT private and run it as a public service, not as a publicly listed company. Ultimately, publicly listed companies have their shareholders to answer to, not their customers.
Mark Laudi
The PTC said in granting SBS, but not SMRT, the right to increase fares by up to two cents it used the Return On Tangible Assets (ROTA) as a "reality check". This measures how much money the company makes based on the value of its trains, equipment and other sellable, tangible assets. According to Reuters data, SMRT has a ROTA of 11% while MTR Corp's is 6.7%. In terms of gross profit margin, last financial year MTR Corp's was a hefty 81.1%, but outpaced by SMRT's 89.8%. At best, all this means is that SMRT is better managed, not that it is gouging consumers.
On a cashflow basis – always our preferred yardstick – MTR is actually performing significantly better than SMRT: S$0.37 compared to SMRT's S$0.18. But even so, this depends on the number of shares on issue.
Let's check out some other ratios, based on Reuters data and a HKD-SGD exchange rate of 5.148:
Revenue growth (last financial year)
MTR Corp: 4.24%
SMRT: 4.41%
Revenue per share
MTR Corp: S$0.34
SMRT: S$0.51
Net earnings per share (a fairly useless but commonly-accepted accounting standard, but let's use it anyway for now):
MTR Corp: S$0.27
SMRT: S$0.09
Dividend per share (last financial year)
MTR Corp: S$0.08
SMRT: S$0.07
Book value per share
MTR Corp: S$2.70
SMRT: S$0.42
Total revenue per employee (last financial year)
MTR Corp: S$282,454
SMRT: S$132,938
We could go on and pick probably a dozen other ratios, but what does this list tell us?
In short, pretty much nothing.
The reason is that while SMRT and MTR Corp are both light rail operators in city states, that's just about where the similarity ends. MTR Corp is a S$24.8 bln company, almost ten times the size of the SMRT's market capitalisation of S$2.6 bln.
Further, MTR Corp has many more people to serve than Singapore, based on population size alone.
In my view, the much better yardstick would be to look at the inflation rate, to see how much of an impact the fare increase has on the average consumer. Is the fare increase going to hurt people's hip pockets? That should be the ultimate question, not whether a company is so well run that it is efficient and profitable.
Two cents is pittance, really, but the principle counts. They are robbing Peter to pay Paul, by penalising shareholders to appease commuters. If you take this attitude, it would be better for the SMRT to be less-well run. With a lower ROTA, it would be granted fare increases more readily.
Or take SMRT private and run it as a public service, not as a publicly listed company. Ultimately, publicly listed companies have their shareholders to answer to, not their customers.
Mark Laudi
Labels: fare hike, MTR Corp, Public Transport Council, SBS, smrt
Singapore get your act together!
Singapore seems to be tackling on larger issues and working double hard to spruce up for the upcoming national day at the Marina Bay.
I can already picture it, the magnificent Fullerton hotel, the majestic Merlion, the 'sky scrapers' of the CBD and of course the sound of swirling water of the Singapore river.
That's not the only event to look forward too, there's of course the Formula 1, and the much anticipated integrated resorts!
Those alone may be enough to help raise Singapore up the ranks as more then just a clean and green city.
Despite our size, our country has a lot going on for it.
Yes, we may be developing and improving at a pretty break-neck paced, which is good, but it seems majority of the people in Singapore are being left behind.
You would expect a developing country boasting with numerous pretigious events to have at the most basic etiquette.
Don't get me wrong, I'm not saying that Singaporeans or just people who call Singapore their home are a bunch of rude mannered individuals.
But its just appalling to admire the developments of our country and yet know that there are people who are just not fitting, or not in line with the country's direction.
On the straits times website today, there's an article which reported that the National Environment Agency, SBS Transit and SMRT have joined forces to launch a campaign to encourage consumers to keep buses and bus interchanges clean!
Incentives, SBS Transit will be rewarding commuters with complementary ride for those who are spotted going out of their way to keep bus interchanges clean.
Its bad enough that conductors have to go around checking EZ-link cards to make sure commuters don't cheat on fares, and now they have to look out for the 'cleanest commuter award'!
In the article, they ranked cigarette butts, paper strips, tissue paper, plastic wrappers and sweet wrappers as the top five most common litters found in bus terminals.
Forgive me if i seem worked up but you would think commuters who use the services on a daily basis and a couple a times a day would have the decency to 'take ownership of their litter'!
Just to name you a few examples:
I was walking along the underground train station to the gantries when the lady in front of me stopped and spat on the ground! I would have stepped on it if i hadn't recovered from my state of shock and disgust as quick as I did!
Another one, I have witness a man on the bus, snort and dispensed his nasal fluid on the floor of the bus !!!!
And a lady spitting on the bus too.
That's not all, do Singaporeans of people in general not know to keep to the left hand side of the escalator unless overtaking?
Or that its only polite to let passengers off the train first before boarding?
I have to take my hat off to some though who, once the train doors open, they give a loud exclamation: “ you don't let me out how u go in?!”. And its usually pregnant mothers or parents with strollers.
My point is, yes, we are definitely growing and progressing as a nation but what about the people? And it is the people that make up the nation right.
But of course not everyone is like that.
It does raise eyebrows to have a country that looks great and is great but to have people who are so far off the tangent.
I can already picture it, the magnificent Fullerton hotel, the majestic Merlion, the 'sky scrapers' of the CBD and of course the sound of swirling water of the Singapore river.
That's not the only event to look forward too, there's of course the Formula 1, and the much anticipated integrated resorts!
Those alone may be enough to help raise Singapore up the ranks as more then just a clean and green city.
Despite our size, our country has a lot going on for it.
Yes, we may be developing and improving at a pretty break-neck paced, which is good, but it seems majority of the people in Singapore are being left behind.
You would expect a developing country boasting with numerous pretigious events to have at the most basic etiquette.
Don't get me wrong, I'm not saying that Singaporeans or just people who call Singapore their home are a bunch of rude mannered individuals.
But its just appalling to admire the developments of our country and yet know that there are people who are just not fitting, or not in line with the country's direction.
On the straits times website today, there's an article which reported that the National Environment Agency, SBS Transit and SMRT have joined forces to launch a campaign to encourage consumers to keep buses and bus interchanges clean!
Incentives, SBS Transit will be rewarding commuters with complementary ride for those who are spotted going out of their way to keep bus interchanges clean.
Its bad enough that conductors have to go around checking EZ-link cards to make sure commuters don't cheat on fares, and now they have to look out for the 'cleanest commuter award'!
In the article, they ranked cigarette butts, paper strips, tissue paper, plastic wrappers and sweet wrappers as the top five most common litters found in bus terminals.
Forgive me if i seem worked up but you would think commuters who use the services on a daily basis and a couple a times a day would have the decency to 'take ownership of their litter'!
Just to name you a few examples:
I was walking along the underground train station to the gantries when the lady in front of me stopped and spat on the ground! I would have stepped on it if i hadn't recovered from my state of shock and disgust as quick as I did!
Another one, I have witness a man on the bus, snort and dispensed his nasal fluid on the floor of the bus !!!!
And a lady spitting on the bus too.
That's not all, do Singaporeans of people in general not know to keep to the left hand side of the escalator unless overtaking?
Or that its only polite to let passengers off the train first before boarding?
I have to take my hat off to some though who, once the train doors open, they give a loud exclamation: “ you don't let me out how u go in?!”. And its usually pregnant mothers or parents with strollers.
My point is, yes, we are definitely growing and progressing as a nation but what about the people? And it is the people that make up the nation right.
But of course not everyone is like that.
It does raise eyebrows to have a country that looks great and is great but to have people who are so far off the tangent.
Labels: escalators, etiquette, National Environment Agency, SBS Transit, smrt, Spit, trains
ComfortDelgro and SMRT should merge.
SMRT president Saw Phaik Hwa is now singing a different tune from almost four years ago.
In 2003, when former transport minister Yeo Cheow Tong suggested for one operator to run all trains to save overheads and offered that SMRT take over the then loss-making North-East Line, Saw said she would not buy a loss-maker.
According to the Straits Times, she now says she does not have a problem running NEL, “but the price must make sense” since it is a business deal.
She also said then, that an industry overhaul is unnecessary, but that improvements could be made.
ComfortDelgro chairman Lim Jit Poh has, on the other hand, suggested “a mega-merger with rival SMRT to create a single public transport group” in his recent formal proposal to the Government. He also suggested an option of having one operator run buses and the other run trains.
The Transport Ministry wouldn't say what else ComfortDelgo has proposed, but is expected to release results of its review by the end of the year.
My two cents to the Transport Ministry is this: Suggest the merger of these two companies and split the running of buses and trains into separate divisions operating independently of each other, but adhering to the same corporate message and allowing cross-platform collaboration.
I had worked with SBS Transit and left just before NEL was launched, so most of my work only circled around buses and corporate matters. My sources from within the company then availed to how messy things were with NEL and how difficult it was to deal with both buses and trains.
The dust seems to have settled since then, but when (according to ST) SBS Transit says it does not make much money from rail and SMRT says it does not make much from buses, isn't it already blindingly obvious that something needs to be done?
Let's picture a scenario with only one public transport company – ComfortDelgro – which has bus (SBS Transit), train (SMRT) and taxi (Comfort) divisions.
SBS Transit would be able to run a more efficient bus company by planning services that ply unique routes without any worry of duplication, which usually leads to diluted revenue.
SMRT can run the North-South, North-East and circle line, which can all be further integrated to streamline operations and improve efficacy.
Both divisions can even come together to organise some transfer solutions for commuters.
Fares would also be standardised and regulated because there would be no competition, essentially.
One might argue that this does not necessarily require them both to merge into one entity since each only needs to concentrate on one business.
But unless both companies get the same memos from management, have both sides on the same page and are both working towards a common goal, SBS Transit and SMRT as individual companies will not be able to achieve the same level of productivity they would under one main group.
Perhaps after merging, ComfortDelgro may even decide to delist and become a co-operative instead to focus on serving the needs of the public.
We'd love to hear your comments.
Serene Lim
*pictures courtesy of clangnuts.com and www.rochford.gov.uk.
ArchivesIn 2003, when former transport minister Yeo Cheow Tong suggested for one operator to run all trains to save overheads and offered that SMRT take over the then loss-making North-East Line, Saw said she would not buy a loss-maker.
According to the Straits Times, she now says she does not have a problem running NEL, “but the price must make sense” since it is a business deal.
She also said then, that an industry overhaul is unnecessary, but that improvements could be made.
ComfortDelgro chairman Lim Jit Poh has, on the other hand, suggested “a mega-merger with rival SMRT to create a single public transport group” in his recent formal proposal to the Government. He also suggested an option of having one operator run buses and the other run trains.
The Transport Ministry wouldn't say what else ComfortDelgo has proposed, but is expected to release results of its review by the end of the year.
My two cents to the Transport Ministry is this: Suggest the merger of these two companies and split the running of buses and trains into separate divisions operating independently of each other, but adhering to the same corporate message and allowing cross-platform collaboration.
I had worked with SBS Transit and left just before NEL was launched, so most of my work only circled around buses and corporate matters. My sources from within the company then availed to how messy things were with NEL and how difficult it was to deal with both buses and trains.The dust seems to have settled since then, but when (according to ST) SBS Transit says it does not make much money from rail and SMRT says it does not make much from buses, isn't it already blindingly obvious that something needs to be done?
Let's picture a scenario with only one public transport company – ComfortDelgro – which has bus (SBS Transit), train (SMRT) and taxi (Comfort) divisions.
SBS Transit would be able to run a more efficient bus company by planning services that ply unique routes without any worry of duplication, which usually leads to diluted revenue.
SMRT can run the North-South, North-East and circle line, which can all be further integrated to streamline operations and improve efficacy.
Both divisions can even come together to organise some transfer solutions for commuters.
Fares would also be standardised and regulated because there would be no competition, essentially.
One might argue that this does not necessarily require them both to merge into one entity since each only needs to concentrate on one business.
But unless both companies get the same memos from management, have both sides on the same page and are both working towards a common goal, SBS Transit and SMRT as individual companies will not be able to achieve the same level of productivity they would under one main group.
Perhaps after merging, ComfortDelgro may even decide to delist and become a co-operative instead to focus on serving the needs of the public.
We'd love to hear your comments.
Serene Lim
*pictures courtesy of clangnuts.com and www.rochford.gov.uk.
Labels: bus, comfortdelgro, merger, smrt, train, transport
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