Saturday, 16 February 2013

SMRT chief executive Desmond Kuek: Man on a mission to change things

He digs deep, asking staff for feedback on what the problems are
By Christopher Tan, The Straits Times, 15 Feb 2013

SINCE taking what is arguably one of the hottest seats in the corporate world last October, SMRT Corp chief executive Desmond Kuek has gone deep to find out what ails the Temasek-owned transport operator ' a company that has been besieged by security breaches, massive train breakdowns and a bus driver strike.

In his first weeks after taking over the helm from Ms Saw Phaik Hwa, he sent out a company-wide e-mail asking for feedback.

Now with the help of more than 300 responses from staff, the former chief of army thinks he has figured it out. And he is setting out to change things.

'The common threads in the responses are that we needed to improve on our preventive maintenance regimen, that a lot of HR policies needed to be reviewed, that our processes needed to be made more efficient and streamlined,' he said, adding that the last referred to enabling people across departments to work better together.

These were some of the points highlighted by the Committee of Inquiry that was convened after two major rail disruptions in December 2011 ' events that played a part in his joining the company.

His first action will be to free up lines of communication across the organisation, beef up his management team and set out five 'key strategic thrusts' distilled from the feedback he received.

The five thrusts are: operational performance, customer experience, workforce health, organisational excellence and sustainable growth.

They may sound like a leaf straight from a management book, but he believes these areas of focus give SMRT 'a much more balanced portfolio of outcomes that I would want to measure the company by'.

He is in the process of developing key performance indicators for each of the five. Management will lead by 'walking the talk', he said in an interview with The Straits Times yesterday.

But what does all this mean for commuters and their top beefs: breakdowns and crowded trains?

Mr Kuek revealed that plans are already under way to renew the rail infrastructure and operating assets.

Rail sleepers are being replaced progressively, the signalling system ' which determines train frequency ' will be upgraded from June, 35 new trains are arriving to beef up capacity and 85 older trains in the current fleet will be upgraded to improve reliability.

All these plans will take five to six years to complete, though. Until then, the CEO conceded, there will not be a 'quantum leap' in service improvement.

Also, much depends on how fast passenger numbers grow over the next few years. In the last five years, rail ridership shot up by more than 60 per cent to 2.65 million trips a day.

However, he said SMRT will do all that it can in the meantime to minimise service disruptions and delays.

'We are going beyond the regulatory standard, which is no more than 2.1 train withdrawals per 100,000km run,' he said. 'We hope to get to zero withdrawal.'

He is also putting in place a technical advisory panel this year to beef up SMRT's engineering strengths.

What about disruptions caused by incidents such as fires, faulty power cables and sagging third rails? These, Mr Kuek, said, are being addressed by the infrastructural works that will take up to the end of the decade to complete.

Industry watchers say they welcome his game plan, even if it is too early to tell if he will deliver.

Ms Lee Wen Ching, an analyst with CIMB, said: 'To be fair, he's been on the job for only four months. But I think it's positive that he has identified the problems and crystallised his strategic thrusts.'

But Mr Kuek said he is confident improvement will come and that he is already seeing 'some initial progress, some buzz, new energy' within the ranks.

'It's not as uniform as I would like, but given time and concerted effort, I'm confident we'd be able to see a compelling change in values and culture.'


If we were to compare with metros around the world, if there is an 'A', maybe for SMRT we would assess ourselves to probably be a 'B' in some areas of reliability and availability today.

- SMRT CEO Desmond Kuek, noting that the operator would not be giving itself a top grade compared to other world metros and that it has room for improvement. He said SMRT is committed and determined to get to an 'A' or 'A*' as soon as possible

SMRT boss shakes up bus ops management
Small number of under-performing staff will leave company, says CEO
By Jermyn Chow And Royston Sim, The Straits Times, 15 Feb 2013

THERE has been a major shake-up at SMRT Corp's bus operations in the wake of last November's illegal strike by its drivers.

Besides a reshuffling at the top, under-performing staff have been counselled, redeployed or handed warning letters.

"A small number" of them will be leaving the company, chief executive Desmond Kuek told The Straits Times yesterday.

"This is because they did not exercise their management or supervisory responsibilities. They did not carry these out well," he said, declining to say how many were disciplined.

Some 171 Chinese national bus drivers protested over salary and living conditions on Nov 26 last year. The following day, 88 of them continued to stay away from work.

Five drivers have since been charged in court and another 29 repatriated for taking part in the illegal strike - Singapore's first in 26 years. Among them, three alleged ringleaders of the strike were sacked last month.

To steer the company back on track, Mr Kuek, who took over the top job only the month before the strike happened, said he wanted to beef up its human resources to ensure the company better manages its 2,000-plus bus drivers, including 450 Chinese nationals.

Roles and responsibilities of managers and supervisors have been redefined so they are "more multi-functional and less siloed" in dealing with issues, he said.

"It allows bus captains to approach any member of the management supervisory team rather than look for that one particular supervisor who used to be directly responsible for their well-being."

Part of their new job scope involves reviewing bus drivers' duty rosters, which he admitted "has been an area of some concern", and improving communication with all drivers.

He said the latest overhaul will ensure management "spends more time understanding the issues and walking the ground, meeting the needs and concerns of all the bus captains".

After the strike, the company conducted an internal investigation and instituted the changes.

Mr Kuek had admitted, in a Straits Times interview last December, that the illegal strike could have been avoided if supervisors had been more "sensitive, attentive and responsive" to the bus drivers' complaints.

Mr Kuek, a former Chief of Defence Force, had tapped former military men for key posts, including the director of buses and deputy director of workers liaison and industrial relations.

He also appointed former army colonel Gerard Koh as SMRT's human resources director.

The 45 relief bus drivers who were on loan from SBS Transit and other private operators after the strike have since returned to their parent companies, after SMRT stabilised its driver rosters.

Looking to grow bottom line while setting house in order
By Christopher Tan, The Straits Times, 15 Feb 2013

TRANSPORT operator SMRT Corp is poised to grow its bottom line even as it struggles to get its house in order.

Chief executive Desmond Kuek is starting a department to look at mergers and acquisitions, both at home and overseas. He is also looking to improve the company's retail business, arguing that it enhances the travelling experience and does not detract from SMRT's core competence.

The company will opt for a new rail financing framework that will convert it into an asset- light organisation with a flatter capital expenditure pattern.

Mr Kuek revealed these plans in an interview with The Straits Times yesterday.

He said he has interviewed a few candidates to look at merger and acquisition opportunities here and abroad, but has not made a decision yet. The Straits Times understands one candidate is Mr Chua Su Tye, a long-time stock analyst from Credit Suisse.

Unlike rival ComfortDelGro Corp, SMRT has largely been unsuccessful in landing new businesses. Only 2 per cent of its profit is derived from overseas operations, versus more than 45 per cent for ComfortDelGro.

Mr Kuek said SMRT has made its submission to the authorities on adopting the new rail financial framework, which will see the Government assuming ownership of all operating and infrastructural assets.

Currently, the Government owns the latter, but the operator is responsible for maintaining them. The operator is granted the first set of operating assets, but will have to pay for replacements.

The new arrangement, first applied for the upcoming Downtown Line which SBS Transit will operate, "gives better clarity on who owns what", Mr Kuek said.

He said SMRT will also have a more even capital expenditure pattern with the new regime. Currently, the pattern is "lumpy", with certain years requiring high expenditures and others far less.

Observers expressed surprise at the chief executive's new plans but noted the switch to being an asset-light company could free up cash for investment or business opportunities. However, others point out that the operator will still have to spend money on leasing the assets from the Government and maintaining them.

Mr Kuek described the new framework as "superior", but added that the switch should be neutral to SMRT and the Government. "No one is going to get a windfall from it," he said. "At the same time, we should not be worse off."

As for its business of renting out retail space at train stations - an activity that came under criticism following the December 2011 breakdowns - Mr Kuek said it took up only 2 per cent of staff strength but contributed about 50 per cent to profits.

"It is not an either-or situation," he said of the transport and non-transport businesses. "What we are doing is putting additional resources into the transport side."

He added that the retail outlets in stations enhance the travelling experience for commuters.

"It's the softer side of customer experience," he said.

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