Thursday, June 9, 2011

Incoming Fare Increases

Tuck Yew! (sorry, couldn't resist that!) Who cares about adding additional bus, train capacity if it means higher cost of living for the consumers? After all, as Prof Chin of NUS said, "My feel is that for land transportation (compared with aviation and maritime) - trains, buses - we probably are adding capacity not ahead of demand. Maybe not even in tandem with demand." In other words, the whole mess is due to bad governance over the past years.

Responding to a question on how the Government might try to mitigate any rise in fares, Lui said any fare increases will take effect later this year. Talk about tunnel vision, he can only conceive of price increases, not price reductions. And he would not touch the sacred cow of a flawed formula that has brought in millions to the state coffers, and finances his personal Swiss standard of living. According to his fellow MP Lim Wee Kiak, it's below his dignity to accept anything less.

The formula used for calculating fares, for some strange reason, factors in inflation besides average wages and productivity of the operators to arrive at the fare adjustment. Inflation, a.k.a. consumer price index, is computed using a basket of inputs, including cost of transportation. Think about it. Fares increase will nudge up inflation, which in turn, thanks to the formula, hike the fare further up. Control engineers will recognise this as the mutant negative feedback signal that, instead of modulating the dynamic behavior of the system to a desired level, spirals it out of control.

At fault is the official dictum that "fare rises keep pace with what people can afford". In plain English, what commuters can afford to be ripped off. They actually say it in print, "it ensures operators can earn enough to improving service". Highest paid SMRT CEO Saw Phaik Hwa, 55, was rewarded with $1.67 million in 2009, and her gem of a comment on the state of the transportation system was “We've yet to push people into the train”. Look like the push from 66.6% to 60.1% is not enough to change things for the better.

The Public Transport Council is responsible for using the formula to "regulate" fares. That's Gerard Ee, the same fellow reviewing the salaries of the Ministers to ensure that the end result is dignified for the beneficiaries.
SMRT is the name, profit is the game



    You were right. The same PTC issued satisfactory statement on MSM just weeks before election hustle that all was dandy and fine with our commuters and transport performance. Of course all spin doctoring by the PAP in house newsletter cannot camouflage the reality in the grounds, and the voters have since spoken. The same PTC "happy results" was subsequently repudiated by Global Journey Index that ranked us 54.5pts below the 61 benchmark. Enough said.

    When will our MSM and Transport Ministry going to bloody wake up, and just tell it like it is. Just admit the abysmal performance and get to the real works (not throwing more money at problems by getting more money from us)? Is about time SG introduce more competitive providers instead of subjecting our citizens into this monopoly fielfdom. Competition as we know, can always be good for consumers.

  2. /// Fares increase will nudge up inflation, which in turn, thanks to the formula, hike the fare further up. Control engineers will recognise this as the mutant negative feedback signal that, instead of modulating the dynamic behavior of the system to a desired level, spirals it out of control. ///

    Correction here - you meant positive feedback and not negative feedback. Positive feedback, in response to perturbation, acts to increase the perturbations, thereby making it worse. Negative feedback, OTOH, acts to oppose changes to the system.

    You can see this at work in the Ministers' and top civil servants' pay. Who are the top earners? They bring in all the top MNCs from around the world, which pushes up the top salaries. Then you have the various GLC CEOs who are paid $5-6m apiece in basic salary. With bonuses, some of them hit more than $20m a year. So, we have a merry-go-round happy affair. You up my pay and I up yours.

    Up yours, I say.
    Or say you say, Tuck Yew!!!

  3. anon@10:16
    Thanks for the link, it's amazing how truth is warped so blatantly:
    "The Republic ranked 18th in a survey of 23 cities on public and private transport journey experiences. Copenhagen, Seattle and Sydney had the most satisfied commuters, according to the inaugural Journey Experience Index by business research and consulting firm Frost and Sullivan.

    Singapore scored 54.5 points, below the global benchmark of 61. Those travelling on public transport indicated a higher level of discontent: Out of 740 public transport commuters and 674 private transport commuters polled here, 77.5 per cent and 57 per cent respectively were dissatisfied with their journey experience.

    Frost's findings vary from a customer satisfaction survey commissioned by the Land Transport Authority, the results of which were released earlier this year.

    Of 3,100 public transport commuters polled last October, 92.2 per cent were satisfied with service, according to the latter.

    Respondents gave an average service rating of 7.3 out of 10. Commuters were asked to rate satisfaction levels in eight areas including comfort, waiting time and reliability."

  4. Why should any publicly listed company in a supposedly competitive environment be guaranteed of an operating profit at the expense of the commuters ?

    First they nationalise all the transport companies. Then they profit from their public listing. Lastly they set up the PTC to ensure guaranteed profits.

    And in the name of fake competition if such transport companies are guaranteed to "earn enough", will there be a real need for such companies to cut down on their excessive costs or to improve their productivities ?

    Isn't that similar to that of BN/UMNO govt guaranteeing its own crony subsidiary of a minimum profit margin in the Malaysian NS Highway tolls collection contract ?

    Is there any possibility that someone in the powers-that-be could have benefitted from the whole exercise ? Could it be true ?

    It seems a lot of questions will continue to go unanswered.


    Look at slide 12. And you'll understand how they even intend to monetize from all the apps from their so-called "expertise" to other 2/3rd world countries. That explains why SBS decided to clamp down on the much more innovative and accurate mobile Bus apps from local inventors creativity, although the apps was a much better and brilliant one than what SBS provided. Goes to show, even in innovation/creativity, they want to monopolise it into their GLCs. How to promote entreprenuership like that in SG? In other more lassier faize country, there'll be richard branson or tony fernandez, but in SG, only SIA WILL & CAN come up with a budget aviation. Not only do they have this knack of killing local creativity, they only really just want singaporeans to remain as sheeps. Even silence of the Head Lamb - President. This country is much for meritocracy my BS.