In yet another legalised transfer of taxes to private companies, the Singapore government Land Transport Authority (LTA) paid out a total of S$1.84 million in taxpayer monies to SBS and SMRT for “service improvement”.
Under the Bus Service Reliability Framework, the LTA is contracted to pay out “rewards” when buses arrive on-time. SBS received S$1.34 million while SMRT received S$504,000. The two Temasek Holdings-owned entities have also recently reported record profits, with SMRT alone posting a 20% increase in profits to S$109 million for FY2016.
Despite record profits and state-transfer of taxes, SMRT complained that bus fares are still “not keeping pace with rising operating costs”. The two transport operators have never failed to apply for fare increases every year while the government, through the Public Transport Council, never once failed to approve their requests. Both SMRT and SBS are “recession-proof” as losses will be nationalised and paid for by taxes, while profits are privatised for shareholders. There has been growing speculation that such transfer of taxes is necessary to boost domestic profits compensating for losses in foreign investments made by Temasek Holdings, whose CEO is the wife of Prime Minister Lee Hsien Loong.
The CEO of SMRT is the former Chief of Defense Force, Desmond Kuek, while the SBS CEO Juay Kiat Gan was also a senior officer with the Singapore army.
Although there have been an increasing number of train breakdowns, there is no mention of any penalty by LTA. Commuters are also not compensated when the public transport breakdowns caused tens of millions of losses in economic productivity. Interestingly, the two operators were instead “rewarded” for doing their job. In other democratic countries, such “rewards” constitute corruption and the Transport Ministry should be under investigation for corruption.
SMRT net profit jumped 20% but complain fares are still too cheap