Singapore’s public transport operator SMRT saw it’s net profit jumped 20% to S$109 million for FY2016 but it still complains about the price of public transport fares being too cheap. Group revenue increased 4.9 per cent to $1.3 billion in FY2016, while operating profit improved 14.6 per cent to S$138.5 million. However, SMRT complained that public transport fare adjustments have not kept pace with rising operating costs.
The press release by SMRT also did not comment about the increasing frequency of train breakdowns, or explain how have service standards improved to justify their statement calling for a fare hike.
Public transport in Singapore is heavily subsidized by taxes but profits reaped from fares collection is privatized by the transport companies. In 2012, under the Bus Service Enhancement Programme (BSEP), the Singapore government gave S$1.1 billion worth of buses to the two companies to ramp up on service supply. In Nov 2015, the Land Transport Authority also announced that it will be giving more than S$1 billion worth of trains and manpower training to the two public transport companies companies in a bid to cut down the increasing frequency of train breakdowns due to lack of competence and expertise on SMRT and SBS’s part.
The major shareholder of SMRT and SBS is Temasek Holdings, which is managed by the wife of Prime Minister Lee Hsien Loong. Given Lee Hsien Loong’s position as the leader of the government, in other countries, such practice constitutes corruption and conflict of interests as it is hard to prove that government policies did not directly benefit SMRT and SBS out of nepotism. The CEO of SMRT is Desmond Kuek, a former army general who had zero experience dealing with public transport. Currently, SMRT trains break down on an average of twice a month, with 3 major breakdowns already happening in the same week just last week.