Wednesday, September 13, 2006

Increase is small but ....

Well, fares are up.

From October, adult EZ-link fares for buses and trains will increase by 1 to 3 cents, which amounts to an overall fare hike of 1.7 percent. On the surface, it doesn't account to much, however please do remember it is per trip and it does add up.

Any normal commuter would take at least 2 trips a day, and with a good percentage taking 4 trips. If we made a rough esitmate of 10 cents increase per day, an average person would had to fork out around $3 more per month.

In my opinion, the increase isn't much. But is the increase fair?

The mainstream media had gone on the offensive, highlighting the 1.7% percent and 1-3 cents increase but they had totally skipped around the question if the fare increases is justisfied in the first place.

The Public Transport Council (PTC) says that given the positive economic outlook, it assessed that there were no "extenuating circumstances" to vary or reject the proposal. However, I would also say that there were no "extenuating circumstances" to submit the proposal in the first place.

Simply take a peek at the dividend yield of SMRT and SBS Transit.

SMRT Corp's total gross dividend for the financial year ended March of 7 cents per share — S$84.6 million net — represents 81.6 per cent of its S$103.6million net profit.

For SBS Transit, it pays even better. 19 per cent dividend per share and "1 Year Total Return" of 71 per cent.

Both companies seems to be more interested in "increasing shareholders' value" then to invest some of the profits back into their business. Why is so?

It is because they can ask for regular fare increase and never had to justisfy for it.


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posted by wert | Wednesday, September 13, 2006 | Email This!


2 Comments:

Anonymous Anonymous said...

Buy SMRT shares. In fact, buy all the shares in government transport companies. They never allow you to lose money. No risks involve. As the saying goes, put money,take money. To hell with conscience.

Wed Sep 13, 05:34:00 PM 2006  
Anonymous Anonymous said...

Saw you letter to CASE. Your persistance is commendable. But the letter could have been more effective if you had been more focused on championing a clear cause. All Singaporeans and no constructive suggestions will get the letter nowhere.

Thu Sep 21, 05:09:00 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.