Too Big To Fall

And you thought the whole shebang was about shaving off some minutes from your waiting time for the next bus. A little birdie just let it be known that the duopoly of public bus transport operators was losing money in recent times, to the tune of some $40 million a year. You'll never glean this from the published figures, the SBS Transit 2013 annual report indicates a healthy operating profit of $15.526 millions, down from 2012's $25.418 millions. The red ink must be stanched at all cost.

The sale of assets to the Government will net a transfusion of cash, whether priced at written down value or cost at acquisition. Whatever's best for dressing up the books. Thanks to the greedy anticipation of large dividend payouts when the huge amount of "free money" rushes in, shares of both companies have soared and closed at their highest in two years.

You will appreciate the popularity of the exercise with stakeholders when you know who stands to benefit most from the bailout:

SMRT Top 5 largest shareholders:
Temasek Holdings Pte Ltd (54.23%)
DBSN Services Pte Ltd (4.97%)
DBS Nominees Pte Ltd (3.70%)
Citibank Nominees Pte Ltd (3.56%)
HSBC (Singapore) Nominees Pte Ltd (2.18)

SBS Transit Top 5 largest shareholders:
Comfort Delgro Corporation Limited (75.21%)
BNP Paribas Securites Services Singapore (3.55%)
DBS Nominees Pte Ltd (1.70%)
United Overseas Bank Nominees Pte Ltd (0.91%)
Citibank Nominees Singapore Pte Ltd (0.52%)

ComfortDelGro Corp's 3rd largest shareholder used to be the Singapore Labour Foundation (after DBS nominees and DBSN Services), which has pared down its stake in the transport giant over the years, from 12.08% (2011), 11.18% (2012) to 2.47% in 2013.

Whither the harassed ordinary commuter? Same old, same old, pay and pay until broke. It's no coincidence that an Australian bus operator has declared their intent to enter the "ideal" Singapore market, where profits are guaranteed by captive consumers who have no alternative but to grin and bear it.