Saturday 31 October 2015

Government should run Singapore's public transport system: Kishore Mahbubani

Privatisation of public transport may have gone too far: Mahbubani
He calls on Singapore to free itself from 'old economic ideas' and to have political courage to make policy U-turns
By Soon Weilun, The Business Times, 30 Oct 2015

PRIVATISATION of Singapore's public transport system may have gone "too far", and the government should consider running the system instead, a leading academic said on Thursday.

Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy, urged Singapore to not be "a prisoner of old economic ideas" and to have the "political courage" to make policy U-turns, including on the idea of the role privatisation plays in the country's economy.

"Let us consider the possibility that we may have gone too far, and we have become a prisoner of old economic ideas. And, to suggest one concrete area where we have gone too far, is in the area of public transport."

He was speaking as a panelist at the Singapore Economic Policy Forum, an annual forum co-organised this year by the Economic Society of Singapore (ESS) and Nanyang Technological University.

In his speech to forum attendees, Prof Mahbubani listed out three challenges that Singapore might face in the future, including the geopolitical rivalry between the United States and China, and the strategic importance of Asean to Singapore's survival.

It was in the context of the third challenge - that of being willing to make policy changes - that his point about Singapore's reluctance to deprivatise the public transport sector was raised.

He said public transport was a public good, but Singapore had decided that private operators were better placed to deliver such a service.

"Then we ask ourselves: Why is the MRT breaking down so often?" he mused.

His comments come in the wake of faults and breakdowns in the country's rail system in the past three days, which disrupted trunk services on operator SMRT's North-South and East-West Lines and SBS Transit's North-East Line.

Prof Mahbubani attributed the frequency of breakdowns to the operators being profit-maximising private corporations, to whom long-term maintenance works were viewed as costs.

He referred to a recent media report about Hong Kong's MTR Corporation (MTRC) spending 37 per cent of its rail revenue last year on maintenance, against SMRT's 19 per cent.

Separately, SMRT clarified on Wednesday that its rail-related maintenance costs ranged between 39 per cent and 45 per cent of rail revenue during financial year 2015.

Its revenue for 2015 was S$1,235.5 million; that for SBS Transit last year was S$951 million.

Prof Mahbubani's comments on Thursday drew a firm rebuttal from Banyan Tree Holdings executive chairman Ho Kwon Ping in a question-and-answer session.

Mr Ho, who also spoke at the forum, said he did not support "excessive privatisation", but also believed that re-nationalising industries was not a solution. In his view, MTRC owns the real estate that sits above its stations, so it can generate revenue from that, which underwrites the non-profitable parts of public transport.

"We privatised wrongly, and Hong Kong privatised in a way that is probably more correct," he said.

Analysts were cautiously optimistic about prospects for better railway services in Singapore.

Some said the transition to a new rail financing framework and government contracting model for bus fleets would alleviate strains on capital expenditure for SMRT and SBS Transit, which would in turn free up cash flow for them to focus more on preventive maintenance.

They added that the new regulations that allow the government to impose harsher penalties on operators for service disruptions constitute an added prod to operators to invest more in maintenance.

Then, there is the political factor.

Eugene Chua from OCBC Investment Research said in a September report: "In our view, with Singapore's General Election 2015 over and a new transport minister appointed, we do not rule out the possibility that rail reform could potentially be accelerated."

Ultimately, Prof Mahbubani said that the state of Singapore's public transportation was a good example of Singapore's readiness to confront mistakes in public policy.

"I'm afraid of what's happened in Singapore - that once you make a decision to go in a direction and when it becomes clear that it is not working, we are very reluctant to do a U-turn and do something else," he said.

Singapore's public transport woes are a result of privatising bus, train and taxi networks. The system should be de-privatised, says prominent academic Kishore Mahbubani.
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Kishore Mahbubani calls for national transport agency in Singapore
It can help S'pore develop the best ecosystem of public transport, says Kishore Mahbubani
By Christopher Tan, Senior Transport Correspondent, The Straits Times, 19 Nov 2015

Singapore's public sector is world class. But its private sector is not. So if the country wants the best public transport system in the world, shouldn't the public sector be in the driver's seat?

Professor Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy, asked this in an address at yesterday's Future Mobility symposium, reiterating his call for public transport to be nationalised.

"We should create a new agency and call it Public Transport Board," Prof Mahbubani said.

"It should merge all the trains, buses, taxis and shared vehicles in Singapore, including bicycles and scooters for hire.

"If Singapore has already become the most successful society in human history in the first 50 years, there is no reason why we cannot develop the best ecosystem of public transport in the world."

In this "ecosystem", there would be "zero car ownership", and the percentage of land space devoted to roads would be halved from 12 to 6 per cent.

Instead, there would be jogging and cycling tracks, and "air-conditioned walkways", the professor said in his speech that began with Martin Luther King's "I have a dream" declaration.

Professor Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy, yesterday reiterated his call for...
Posted by The Straits Times on Wednesday, November 18, 2015

Citing the success of agencies like the Housing Development Board and Economic Development Board, Prof Mahbubani said a similar agency could "take over the management of all the limbs of our public transport".

Repeating his clarion call for a state-run transport system - one made by the Workers' Party for a number of years now - Prof Mahbubani said that by 2050, a smartphone app created by the new "Public Transport Board" would "tell me the cheapest and fastest way to get to work".

Trips would be made predominantly by trains, and the app would be able to arrange for autonomous pods to make the first and last miles.

The professor called for public transport to be nationalised last month when he spoke at the Singapore Economic Policy Forum, saying that Singapore's public transport woes are the result of privatisation "taken too far", and the country should have the "political courage" to make changes to the system.

He said the country should not "remain a prisoner of old economic ideas", such as the notion that public transport should be privatised.

The Government is already taking fuller ownership of the transport system, with the new bus contracting regimen as well as the new rail financing framework.

And on Tuesday, Transport Minister Khaw Boon Wan hinted in a blog that further changes may be afoot to pave the way for better integration between designers, builders and operators of MRT lines.

Should the public transport system be government-owned? Nearly half of 50 Singaporeans in a poll were for it. Some experts, however, favoured a hybrid model.
Posted by The Straits Times on Sunday, November 22, 2015

Poll: Many prefer government-owned transport system in Singapore
Others see hybrid model - govt-owned assets, with services run privately - as ideal
By Adrian Lim, Amelia Teng and Melissa Lin, The Straits Times, 23 Nov 2015

While nearly half of 50 Singaporeans polled were in favour of a government-owned public transport system, some experts appeared to favour a hybrid model.

Instead of overhauling the entire sector and taking ownership and control of it, they felt that the Government could own the assets but leave the day-to-day operations to private operators.

At a transport symposium last Wednesday, Professor Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy, called for the public transport system to be nationalised.

He had also said at a forum last month that Singapore's public transport woes are the result of privatisation "taken too far".

Prof Mahbubani's sentiment resonated with many on the ground.

Nearly half (48 per cent) of the 50 people polled by The Straits Times said that the public transport system should be nationalised.

Housewife Elizabeth Tan, 41, said: "Now, public transport is run by operators like businesses, so profits come first. Some things, like maintenance of railway tracks, may be compromised and they may tend to focus on more profitable bus routes."

Another 13 commuters surveyed were opposed to nationalisation, while the remaining 13 were not sure which transport model would suit Singapore best.

Said Madam Fatimah Alias, 62, a hotel supervisor: "If the Government takes over, taxes will probably get higher. Every country experiences train breakdowns. The problem lies with the system, not who manages it."

Dr Park Byung Joon, adjunct associate professor at SIM University, said a model where the Government takes full management and ownership of the operating assets, such as railway tracks and trains, but engages operators to run the services may be ideal.

"Upgrading and maintenance of assets will be done based on public utility, rather than on ROIs (returns on investment)," he said. His view was echoed by some others.

In Singapore, the Government is already taking a bigger hand in the transport system, through a bus contracting model where routes are put up for competitive tender and revenue risk is state-borne, as well as a new rail financing framework.

Some of those who opposed the idea of the Government taking over said that a hybrid model could be more effective.

Civil servant Eileen Chua, 26, said that private operators "are well placed to be motivated to provide the best service . But the Government should step in where private companies don't see profitable opportunities, like transport services for the disabled."

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