Photo of Khaw Boon Wan from Facebook video

Transport Minister Khaw Boon Wan told Parliament on Friday (May 18) that he is worried about the profits of SMRT and SBS Transit, which is why he wants to raise fares. The PAP Minister said that even if the train system is more unreliable, fares will still need to increase to “help” the two Temasek Holdings-linked companies:

“The Public Transport Council (PTC) had mulled over including rail reliability into the formula for calculating public transport fares, but ultimately decided against it. This was partly because reducing fares in the face of an unreliable rail system would mean withdrawing resources from the operators when they, in fact, need to inject more funds to fix the system. When a system is very unreliable, in fact, that is the time to pump in more resources. And because of that, you punish them through reduced fares; you are withdrawing resources from the operators and you’ll be doing exactly the opposite, the wrong thing.”

The corrupted Transport Minister who bailed out SMRT while showering the former army general crony SMRT CEO with millions in remuneration, said that rail reliability is a “separate” issue from fares:

“Rail reliability is important but it should be dealt with separately. I deal with it directly myself through the sort of focus and pressure I exert on the operators.”

However when questioned if the rail reliability can be factored into the fares, the ex-Malaysian Minister backtracked his words and said it is “already a part”:

“Service standards was “indirectly” a part of the formula via the Network Capacity Factor. For instance, if demand balloons while the rail network does not expand, resulting in congested trains and more uncomfortable rides, the factor will be negative. Everything being equal, the PTC will be asking for a reduction in fares… to counter this reduction in service levels.”

The outgoing Transport Minister complained that he needs more money for the “first-class reliable train system” and claimed that the fares are very cheap when compared to New York and London:

“Fares fluctuate and they cannot always decrease, because manpower costs form a large part of operating costs. This is especially so as the government beefs up maintenance of transport assets by hiring more engineers, mechanics and technicians. All those come with money. It is not realistic to hope that you get a good, first-class reliable train system with no need for any injection of resources. Over time, public transport affordability has improved. Over the last decade, the proportion of household income spent by the lower-income group on public transport each month fell from 4.2 per cent to 2.7 per cent. Overall, Singapore’s public transport fares were not outrageous at all when compared with those in cities such as New York and London. I think Singaporeans in their heart, when they travel, they know (this), because the PTC told me they do fairly frequent focus-group discussions with commuters, asking, ‘do you find fares reasonable?’ And actually, most of them said that it is so.”

In Feb 2018, SBS Transit reported a 50% rise in profits to S$47.3 million for the year of 2017. For the same year, SMRT posted a S$26 million profit. Transport fares were raised by 4.2% in Oct 2017, and the government refused to pass the 5.4% discount calculated from their own formula. The Transport Minister has since revised the formula to see only fare raise, as the older formula was based off oil prices which has plummeted in recent years.