Wednesday, July 26, 2006

Transport Hikes: Where are you, CASE?

July 26, 2006
An Open Letter to Consumer Association of Singapore (CASE)

I am disappointed on that CASE had not made a response to SMRT plan to raise fares across all the public transport systems.

SMRT had cited "large and sustained increase" in the price of diesel over the past two years as the reason and SMRT president and chief executive officer Saw Phaik Hwa said: "There is no reason why we should not apply for a fare adjustment this year."

Just over a year ago in May 2005, Case had made a stand opposing the transport hikes. CASE then argued that the public transport hikes were not justified on the grounds of a record net profit of S$126.6 million by the SMRT in the FY2005.

The circumstances had not changed one year later. SMRT had declared a net profit of S$103.6 million in FY2006 ending on 31 March 2006. This is still a very healthy result, considering SMRT net profits in the FY2003 and FY2004.

FY2003FY2004FY2005FY2006
SMRT Net profit (S$m)72.189.5126.6103.6

In the statement made by President and CEO of SMRT Corporation, Saw Phaik Hwa,
Taking into account the current operating environment, we have performed well and therefore, recommend higher dividends for our shareholders this year. From the growth in retail and advertising, our strategy in the non-fare sectors has certainly paid off. We will continue to intensify our efforts to grow ridership, expand retail space, create more innovative advertising platforms in our public transport system, pursue overseas opportunities to raise the profit contribution from non-fare sectors, and build greater value for our shareholders."
SMRT profit margin has been stable and their outlook optimistic, thus the increase of public transport fares cannot be justified as well. It must be taken into account that SMRT is a public transport company. Commercial profit should not be place way above public interest.

On the other hand, SMRT further announced that single trips fares are unlikely to be adjusted, so as to ensure that Singapore remains "competitive and affordable" to foreign travelers. This is very difficult to comprehend for many Singaporeans. Why are Singaporeans the first to bear the blunt of the increase in price of diesel , instead of foreign travelers?

I urge CASE to further investigate the proposed fares hikes and make a stand for the general public of Singapore.

wert
wertblog@yahoo.com


I had already sent it to CASE through complaints@case.org.sg .Not too sure if it's the best address to do so.


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26 Comments:

Anonymous David said...

Hey, why not send it to Today, Straits Time, NewPaper, or post it in STOMP lol

Wed Jul 26, 06:03:00 PM 2006  
Blogger wert said...

Good idea...I will do just that

Wed Jul 26, 06:33:00 PM 2006  
Anonymous let it be said...

My feel is that you will be bombarded with lots of 'reasonable' arguments as to why increase is justified.Do you not think that it is an exercise in futility?

Wed Jul 26, 07:08:00 PM 2006  
Blogger wert said...

Well, I am realist.
I do know that there is ZERO chance that I will affect their decision.

However, I am sick and tired of sitting on my thumbs, complaining but doing nothing.

Moreover, my aim is to bring about awareness and dispel the way the media had painted Singaporeans' feelings over the issue. It is a way to let the government know that the public feelings over the hikes are not mixed.

Wed Jul 26, 07:21:00 PM 2006  
Anonymous Yamasam said...

You have my support in submitting this letter and I'll will be happy to add my name to it if you want more ammunition.

It may be a futile attempt knowing how this govt works. But at least you have voice your opinion in public (doesn't matter there is no constructive solutions which MICA seemed to require).

This is miles better than just bitching among ourselves.

Wed Jul 26, 09:40:00 PM 2006  
Anonymous Anonymous said...

Exercise in futility or not, the more ppl write in the better, even though outcome is still the same. At the least he is doing something.

Wed Jul 26, 10:24:00 PM 2006  
Blogger Saigon Oi! said...

High profits, yet consumers are made to bear the cost of 'fuel hikes'! Tell me something new.

I'm showing my spoort for you as well

Wed Jul 26, 10:58:00 PM 2006  
Anonymous eyed said...

To " let it be" This is exactlt the type of apathetic attitide that these GLC's were counting on...Stand up for god's sake, even if it is only to be shot down...We are citizens of this country, not mere ecnomic statistics that is to be exploited

Fri Jul 28, 10:23:00 AM 2006  
Anonymous Danny said...

Interest income from 4 million ez-link cardholders of say $10 per card and at 3% interest = $1.2 million for SMRT

Fri Jul 28, 12:28:00 PM 2006  
Anonymous Anonymous said...

Yes and the good performance has resulted in lots of cockroaches and the likes on their buses. They seem a bit lost.

Fri Jul 28, 01:13:00 PM 2006  
Anonymous Anonymous said...

Some reality check here....

CASE belongs to NTUC which belongs to the govt.

Major shareholder of the transport company is Temasek Holdings which belongs to the govt too.

So, do you think you still have a case?? I doubt so.

Fri Jul 28, 01:43:00 PM 2006  
Anonymous let it be said...

To "eyed". I am not apathetic to SMRT unsataited greed.In fact I am testing the responses of the populace and I am very happy that at least Wert has taken the initiative to complain to
CASE. We all know that it is not going to get any result.

Everyone here should be praised for voicing their objection to the transport hikes that increase the financial burden of the commuters.

Fri Jul 28, 03:37:00 PM 2006  
Blogger the Finn said...

the current interest rate is about 3%? which means that you'll expect your savings to give you that much return. businesses have to show a return on the capital invested at a much better rate than a savings bank, say 10%.

from the 2006 annual report, SMRT has a total equity/liabilities of about 1.4 billion. so returning 100 million in profit actually isn't very good at all. doing business is generally a risky thing, much riskier than putting money in a bank - hence the return has to be much better than 3% for it to be a justifiable venture.

everyone wants a pay rise, and that'll only happen if businesses make more money (given that most people are employed by businesses large and small). the PTC limits fare increases to less than 5% anyhow, unlike in other cities (London, for example) where the price of taking public transport has doubled in less than ten years.

if you don't come from a reasoned standpoint, you're unlikely to get the answer that you want. ironically, if you reasoned it out, you'd probably find that you don't have much of a case to argue against the fare hike...

Fri Jul 28, 05:18:00 PM 2006  
Blogger wert said...

the finn,

I think you are right when you are refering to a commerical private company. However, SMRT is a government controlled company operating a virtual monopoly. The risk they carry is surely less than that of a private company with no government backing operating in a free market enviroment.

Furthermore, as a public transport company, despite all its commerical interest, SMRT does have a duty to the general public. If I am not wrong, not many public transport companies in the world have turn in such consistent profits.

Despite all that, I must confess to have next to none business or economics background. Thus, maybe you can share with us from your professional viewpoint how much profits is "good enough" and the reasoning behind the figure.

Fri Jul 28, 06:03:00 PM 2006  
Anonymous Anonymous said...

Oh,"the finn", Wert must surely be disappointed that mathematically,he or she is wrong.

Fri Jul 28, 06:10:00 PM 2006  
Anonymous eyed said...

" let it be" like whatever...i'm with wert, basic econs dictate that it is the responsibility of the govt to take intrest in the affair of a monopoly. To finn, please elaborate on the part where u say that a business venture has to provide more returns than bank savings...this is the use of a public good here not some corporate venture, where's your soul mr finn?

Fri Jul 28, 08:12:00 PM 2006  
Anonymous Anonymous said...

problem here is we don't have leaders with absolute integrity nor understand that there is no justification for perpetuating half truths. ultimately, it is their foolish vision and perverted values cooked in a complex mixtures of inconsitency that will sink the ship.
i don't think there is a CASE here.

Fri Jul 28, 09:01:00 PM 2006  
Blogger at82 said...

Hi finn,

Yes SMRT control 1.4 billion worth of assets and the 104 million profit margin is lousy if u see it in that way.

However you neglected the fact that the MRT lines are all funded by the taxpayers and not SMRT or SBS. The govt used our $ to build the infrastructure and transfer the operating rights to these transport companies.

Hence I dun see any justification of the increases in fares just to maintain their profit margins given that these companies had not share the cost of building the infrastructure.

Sat Jul 29, 04:54:00 PM 2006  
Anonymous Capitalist Infidel said...

Finn, I had supported the view that private companies should make money as well but considering the fact that SMRTis owned mainly by the government and has a monopoly built by the government, control is needed for the fares. They are no longer a private company. They are a public company in disguise

Sat Jul 29, 10:48:00 PM 2006  
Blogger Lance said...

i really cant believe it mann.. they are increasing the price again???? look at their profits, all these just doesnt justify their action.

well, i think the best thing to do now, isnt to grumble and yak here. something easy and easier to gain attention of SBS. perhaps a petition? an online one.. anyone know any sites for petitions?

its just so unfair. all the increased gains go to the pockets of the rich shareholders, while us poor transit users dig and scrape to the bottom of our pans. just doesnt rationalize.

i wont wanna pay more, on top of my polytechnic bus and mrt fares mann. *refering also to the jc vs poly fare system.

-lance.

Sat Jul 29, 11:52:00 PM 2006  
Blogger wert said...

Online petition is only useful up to a point for they will only questioned your anonymity and your agenda.

Therefore, it would be better to write in. If you believe in something, you got to put your name on it. Else others have scant reason to believe that you believed, much less your beliefs.

You can even write to your ever capable and tireless MP for a start. SMRT/LTA/Mass media are good targets as well.

Sun Jul 30, 01:53:00 AM 2006  
Blogger Hangman said...

Well, the Singaporean "Public" transport system is misnamed.

While being called a public transport system, they are public listed companies with shares and shareholders, with PROFIT MOTIVE.

However, because the infrastructure costs are covered significantly by the government (because which company wants to spend that kind of money to build something), they are regulated by the PTC.

This is why at the end of the day we keep facing such issues and problems. The public transport companies are private enterprises which have profit motive, accountable to their shareholders just like any other company.

In other countries the public transport tends to really be PUBLIC. Of course that also means it generally loses money and is really inefficient.

Sun Jul 30, 05:00:00 PM 2006  
Blogger Hangman said...

Well, the Singaporean "Public" transport system is misnamed.

While being called a public transport system, they are public listed companies with shares and shareholders, with PROFIT MOTIVE.

However, because the infrastructure costs are covered significantly by the government (because which company wants to spend that kind of money to build something), they are regulated by the PTC.

This is why at the end of the day we keep facing such issues and problems. The public transport companies are private enterprises which have profit motive, accountable to their shareholders just like any other company.

In other countries the public transport tends to really be PUBLIC. Of course that also means it generally loses money and is really inefficient.

Sun Jul 30, 05:00:00 PM 2006  
Anonymous Anonymous said...

it is inefficient because the people are wrongly motivated.

Sun Jul 30, 08:43:00 PM 2006  
Anonymous Anonymous said...

"While being called a public transport system, they are public listed companies with shares and shareholders, with PROFIT MOTIVE."

Do you mind telling me who are these shareholders? The majority of the these shares are not in public hands. The government holds an very significant indirect stake on these "private" companies.

Sun Jul 30, 09:00:00 PM 2006  
Anonymous Anonymous said...

When kopi price went up, CASE KPKB....
Transportation fare adjustment is gradual and every year 1~2 cents is acceptable(according to some advice from the top)....We "beep" "beep" everyday,transportation company CEO and govertment smiling all the way to the bank!

Wed Aug 02, 04:19:00 PM 2006  

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Disclaimer: This blog is not intended to be authorative or clever in any way. It was based on rambling of a half crazed creature, so treat it as such and let it be! I was asked to keep my dangerous thoughts and unbalanced views all in one safe place , and so I did. Objectivity, Accuracy, Responsiblity and any High Standards are certainly not part of this blog's features. However, I must stress that I do not strive to mislead people, confuse people, and much less undermine our national strategy.