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\r\n Order for Second Reading\r\nread.
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\r\n 5.01 pm
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\r\n \r\n \r\n The Minister for Transport (Mr Lui Tuck\r\nYew)\r\n : Mr Speaker, Sir, I beg to move, \"That the Bill\r\nbe now read a Second time.\"
\r\n
\r\n Sir, in February, the Government\r\nannounced the Bus Service Enhancement Programme, or what I would\r\ncall the BSEP for short, to significantly expand public bus capacity\r\nand improve bus service levels over the next five years. Against\r\nthe backdrop of higher than expected public transport ridership\r\nin recent years, and high levels of peak period crowding, the Government\r\nhad stepped in to decisively improve bus services for commuters,\r\nahead of the roll-out of new rail lines and capacity enhancements\r\nto existing lines in the next few years.
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\r\n Under the BSEP, 550 buses\r\nwill be added to the existing bus fleet with the Government's assistance.\r\nThe Public Transport Operators (PTOs) will fund, at their own cost,\r\nanother 250 buses. Together, this will expand the bus fleet from\r\n4,000 to 4,800 buses, or an increase of about 20%. As these buses\r\nare progressively added, commuters can expect more frequent, more\r\nreliable and less crowded bus services. In addition, we will improve\r\noverall bus connectivity, by adding about 40 new bus routes under\r\nthe BSEP. This represents a 15% increase in the number of bus services.\r\nA small number of this new bus routes will run parallel to stretches\r\nof the existing MRT network.
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\r\n To execute the BSEP, we\r\nhad announced that $1.1 billion would be set aside in a special\r\npurpose Bus Service Enhancement Fund (BSEF). This would cover the\r\nnet costs of purchasing and running 550 buses for 10 years under\r\nthe programme. To put the $1.1 billion in context, we have invested\r\nsome $20 billion in our Rapid Transit System (RTS) network. We will\r\nbe investing some $60 billion more to expand it over the coming\r\n10 years. Our BSEP investment in the bus system complements our\r\ninvestments in the RTS network to achieve a high-quality, well-integrated\r\npublic transport system where both the bus and rail systems work\r\ntogether to deliver high levels of service at affordable fares.
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\r\n With the BSEP, commuters will benefit from\r\na quick and decisive improvement in bus service levels. It also\r\nmeans that no additional costs are borne by commuters, who may have\r\nto pay 15 cents more per journey otherwise. The Government will\r\nensure that the PTOs make no additional profits from the BSEP, which\r\nwill be run on a net cost-recovery basis.
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\r\n Separate from the BSEP,\r\nas part of our periodic review of the overall bus financing framework,\r\nthe Government had also announced, during Committee of Supply 2012, two\r\nother measures which were intended to more closely align support\r\nfor the bus industry to what the Government has provided for the\r\nrail industry. First, a portion of the revenue currently received\r\nby the Government from bus shelter advertisements will be channelled\r\nto the PTOs. Second, the leasing and land-related costs for all\r\nbus depots and bus parks will be taken over by the Government. Both\r\nmeasures will be of some help to the bus operators as they have\r\nto cope with rising costs. We will continue to review and fine-tune\r\nour bus financing framework periodically.
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\r\n Mr Speaker, Sir, let me\r\nnow update Members on the implementation of the BSEP. Since the\r\nannouncement in March 2012, LTA and the PTOs have been working out\r\nthe implementation details. These have largely been sorted out.\r\nThe first buses under the BSEP will be deployed on our roads sometime\r\nin September this year. We will provide details of the new routes\r\nand improvements made to existing services then.
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\r\n Over the next one year,\r\nwe expect to add around 250 buses to the combined public bus fleet\r\nof about 4,000 buses. This increase in 250 buses will allow us to\r\nimprove the service levels for at least one in three existing bus\r\nroutes and introduce about 14 new routes.
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\r\n I know many of you in this\r\nHouse would be anxiously waiting for the new buses to come your\r\nway, but please be patient. The new routes will be implemented progressively,\r\nand as far as possible, geographically distributed to various parts\r\nof the island as needed. The implementation of new routes will be\r\npaced with improvements to existing services. I seek Members' understanding\r\nif some of your requests cannot be met, or not as soon as you would\r\nlike, but I assure you that your constituencies will enjoy improvement\r\nin bus services in the not too distant future.
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\r\n In this regard, LTA has\r\nbeen progressively engaging Members of Parliament and community\r\nleaders to better understand the needs of your residents. I would\r\nlike to thank all of you for your support. We will carefully assess\r\nand prioritise the different requests. Our end objective must be\r\nto achieve the maximum possible benefit with the finite resources\r\nunder the BSEP.
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\r\n To support the roll-out\r\nof the BSEP, both PTOs have recently enhanced salaries for bus drivers\r\nto attract more Singaporean drivers, and together, the PTOs expect\r\nto hire about 360 new bus drivers from now until the end of the\r\nyear.
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\r\n While we have made an encouraging\r\nstart to recruitment of new drivers this year, especially after\r\nthe introduction of the salary enhancements, I have urged both PTOs\r\nto step up their recruitment. I would expect both PTOs to closely\r\nmonitor the effectiveness of their enhanced remuneration packages,\r\nand be ready to make further adjustments if required. Recruitment\r\nand retention of bus drivers will continue to be the most challenging and critical\r\nresource constraint in the roll-out of the BSEP, and I will be personally\r\npaying close attention to this matter.
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\r\n Let me now bring the House\r\nthrough the intent and key provisions of the Bill. The proposed\r\namendments to the LTA Act are primarily to allow LTA to implement\r\nthe BSEP, to establish the BSEF, and to provide grants to the PTOs\r\nin line with the two bus financing measures I mentioned earlier.
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\r\n Section 6(1)(g) will be\r\namended to introduce a new function for LTA, which is to implement\r\nprogrammes, such as the BSEP, to improve public bus services provided\r\nby the PTOs and other bus operators licensed by the Public Transport\r\nCouncil (PTC). Specifically, the amendments provide for LTA to carry\r\nout operational planning for bus services to meet the needs and\r\nexpectations of the public, including coordinating the routes and\r\nscheduling of bus services provided by the operators.
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\r\n To allow LTA to fulfil this\r\nnew function, a new section 7(1)(d) will be added to the LTA Act\r\nto confer powers on LTA to provide financial assistance to the various\r\nbus operators in the form of loans, grants and guarantees for BSEP,\r\nand for any future programmes to improve public bus services. A\r\nnew section 13(1)(l) is also added to the LTA Act to provide that\r\nsuch financial assistance can be provided by LTA through its existing revenue\r\naccounts.
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\r\n Finally, in line with the\r\nGovernment's stated intention for the $1.1 billion to be held in\r\na special-purpose BSEF, a new section 13B will be added to the LTA\r\nAct to provide for the creation of the BSEF. The BSEF will be used\r\nby LTA to provide financial assistance to the PTOs in the form of\r\nloans and grants, to purchase buses, and to finance the operating\r\nexpenditure they incur under the BSEP.
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\r\n We have also built in legislative\r\nflexibility for the BSEF to collect grants or related revenues,\r\nand fund expenditures, under any other future programmes that LTA\r\nmay enter into with bus operators to improve public bus services.\r\nAs I mentioned in my COS 2012 speech, we will be reviewing the bus\r\nfinancing framework. Depending on the outcome of the review as well\r\nas the effectiveness of the BSEP in delivering the expected bus\r\nservice improvements, we will not preclude that the BSEP in its\r\ncurrent form may need to be adjusted, supplemented or even replaced.\r\nAs such, it is only prudent to build in legislative flexibility\r\nso that we can respond in a timely manner to any necessary changes.
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\r\n Mr Speaker, Sir, the proposed\r\namendments are needed for LTA to establish the BSEF, to contract\r\nthe PTOs to implement the BSEP, and provide grants to the PTOs in\r\nline with the two bus financing measures announced at Budget and\r\nCOS 2012. Sir, I beg to move.
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\r\n Question proposed.
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\r\n 5.11 pm
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\r\n \r\n \r\n Mr Gan Thiam Poh (Pasir Ris-Punggol)\r\n :\r\nMr Speaker, Sir, thank you for allowing me to join the debate. I\r\nwill speak in Mandarin first.
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\r\n \r\n (In Mandarin): [Please refer to Pg\r\n368-369 for Vernacular Speeches.] Mr\r\nSpeaker, Sir, food, clothing, shelter and transport are basic necessities\r\nof life. People have been seeking a perfect transport solution that\r\nis convenient, fast, safe, reliable and economical. In ancient times, people looked\r\nfor horses that run a thousand miles a day, while in current times,\r\nwe look to MRTs and high speed trains.
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\r\n Recently, I came across\r\nan article \"Subsidies for Public Transport\" written by Zhao Yongshan\r\nwho raised three rather noteworthy suggestions: to have the right\r\namount of subsidy, to improve the methods of subsidies, and to enhance\r\nthe supervision of how subsidies are used.
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\r\n Have the right amount of\r\nsubsidy. Public transport is a public service. Thus, the fares and\r\nroutes cannot be totally based on market principles. The Government\r\nneeds to plan and regulate and provide a certain degree of subsidy.\r\nHowever, public transport is also a business, and too much reliance\r\non subsidy will lower productivity and encourage wastage of resources.\r\nTherefore, financial subsidy should not only help operators manage\r\ncosts but also motivate them to be more efficient. Taking a leaf\r\nfrom countries like the United States, United Kingdom, France, Germany,\r\nJapan, Hong Kong and even Taiwan, the amount of subsidy is best\r\nat the \"level of offsetting operation cost\".
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\r\n Improve the methods of subsidies.\r\nFirst, we need to increase the subsidy for infrastructure. Generally\r\nspeaking, subsidising infrastructure development has greater impact\r\nthan subsidising operating cost as an efficient and reasonably priced transportation\r\nwould attract more ridership. This is why governments in many countries invest\r\nheavily in public transport facilities. Beijing, for example, believes\r\nthat a fast, convenient and on-time land transport is more attractive\r\nthan low fares. Secondly, we need to encourage more involvement\r\nof investment, development and operation of public transport. By\r\ncreating market competition and ensuring that routes will only be tendered\r\nto operators who meet the service standards and at the same time\r\nrequest for the least subsidy, would encourage companies to raise\r\nproductivity and not waste resources trying to secure more subsidies.
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\r\n Strengthen supervision on\r\nsubsidy. The writer suggests that the authorities should stipulate\r\nregular disclosure of information on public transport subsidies,\r\nPTO's profits and losses, forecast and usage of subsidies. The Government\r\nshould enhance the control and audit of public transport operating\r\ncost and Government subsidies.
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\r\n The Transport Minister has\r\nassured us that LTA will audit and supervise the accounts of public\r\ntransport operators and funds will only be given out after the figures\r\nare in. Bus companies will not benefit from the $1.1 billion fund.\r\nThis money is from the people and will be used on the people. The\r\nGovernment's intent of pumping in $1.1 billion is to subsidise bus\r\nfare for commuters, not operators. It is to allow all commuters\r\nto enjoy higher standards of bus services without too big a fare\r\nhike. I think most Singaporeans will find this arrangement acceptable.
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\r\n Mr Speaker, Sir, I support\r\nthis Bill. Singapore's population is growing, and so is our expectation\r\nof public transport. We are looking for a convenient, fast and value-for-money\r\ntransportation system. And it is the Government's responsibility\r\nto build such a system.
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\r\n Convenience means having\r\npublic transport at our doorstep. Even though the MRT network is\r\nexpanding and the Circle Line will be fully operational, the MRT\r\nstill does not reach every neighbourhood. Thus, public buses play\r\na supportive role in making it more convenient for Singaporeans\r\nto move around.
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\r\n Fast – shorter waiting time and journey.\r\nThis requires bus services to be more frequent, which means, we\r\nneed more buses.
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\r\n To attain convenient and\r\nfast service, to get more buses and improve service standards, all\r\nof these require funding. Private companies cannot afford such a\r\nhuge amount. Thus, the Government needs to render help. If the Government\r\ndoes not take responsibility of public transport and allow market\r\nforces to control it, more Singaporeans will not enjoy public transport\r\nor have to put up with bad services. Government subsidies will enlarge\r\nthe coverage of the public transport network and ensure fairer distribution\r\nof bus routes, therefore, more people can enjoy effective public transport.
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\r\n Another noteworthy problem\r\nis whether we can recruit a sufficient number of bus drivers. SBS\r\nTransit has increased the monthly salaries of newly recruited Singaporean drivers\r\nfrom $1,375 to $1,600. Current Singaporean drivers will have a $225\r\npay raise across board. SMRT will also follow suit. Newly recruited\r\ndrivers, with overtime and other allowances, can expect a pay of\r\n$2,250. I hope the authorities will gradually increase the pay of\r\nbus drivers in the next few years so as to retain current drivers\r\nand attract more Singaporeans to join the industry.
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\r\n The various measures are\r\ngood but they would inevitably increase operating cost for small-and-medium\r\nsized bus companies, which would inadvertently drive up the fares for\r\nschool buses. I hope the Government will look into helping affected\r\nfamilies.
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\r\n The Government subsidies\r\nwill not only help bus operators to remain viable but also improve\r\nthe service standards of our public transport for the benefit of\r\nSingaporeans. Therefore, I support the Bill.
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\r\n \r\n (In English): Mr Speaker, Sir,\r\nI fully support the Bill. Our bus capacity is straining to meet\r\nthe demand of our commuters during peak hours and on weekends. Any\r\nincrease to the bus capacity on the scale and within the set timeframe\r\nnecessary to solve this problem can only be achieved with Government\r\nparticipation. The investment costs involved are simply too heavy\r\nfor our bus operators to bear. We must bear in mind that not every\r\nroute is financially viable but our PTOs are still required to provide\r\nbus services to serve the needs of our residents. Hence, we must\r\nevaluate our services based on the entire road network. The Bus\r\nService Enhancement Programme (BSEP) is the fastest way to step\r\nup capacity while keeping our bus fares affordable.
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\r\n We are fortunate that we\r\nhave the financial resources and reserves which allow us to set\r\naside $1.1 billion for the Bus Service Enhancement Fund (BSEF) without\r\nimposing a financial burden on future terms of Government. Furthermore,\r\nwe have the reassurance of the Minister that the operators and shareholders\r\nwill in no way profit from this Government injection. All monetary\r\nflows will be tracked and be accounted for. If necessary, not all\r\nof the $1.1 billion will be disbursed. I believe that MOT will be responsible\r\nfor the judicious management and disbursement of moneys from the\r\nFund to the PTOs; it will put in place the necessary checks and\r\naudits to monitor and control the flow of funds. With this assurance,\r\nI have every confidence that the programme will deliver the results\r\nwe want.
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\r\n The Bill clarifies LTA's\r\nrole in the provision of transportation infrastructure including bus\r\ndepots, bus parks and bicycle parking facilities. This is practical\r\nas it will remove some of the entry hurdles to new PTOs in the future\r\nand allow more competition in this sector. It will be administratively easier\r\nto let the PTOs to focus and compete on the provision of bus services.\r\nThe Government should continue to do more of heavy lifting through\r\nthis funding, construction and maintenance of the infrastructural\r\nassets.
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\r\n I would like to take this\r\nopportunity to appeal for more bus priority measures to be implemented.\r\nWithout these, more buses on our roads would cause more congestion and\r\nbus bunching. In addition, we must look into expanding our bus interchanges\r\nas the few interchanges that were built in the last three years,\r\nsuch as the new Boon Lay and Serangoon Interchanges, are much smaller\r\nthan the previous interchanges. The temporary Jurong East and Bedok\r\nInterchanges also have the same problems.
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\r\n 5.24 pm
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\r\n \r\n \r\n Mr Pritam Singh\r\n : Mr Speaker,\r\nI seek a few clarifications from the Minister with regard to sections\r\n12 and 13B of the proposed amendment and insertion into the Land Transport\r\nAuthority of Singapore Act respectively, made necessary by the Bus\r\nService Enhancement Fund (BSEF).
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\r\n Mr Speaker, the tabling\r\nof these amendments to the LTA Act sheds more light on how the BSEF\r\nwill be implemented, further detailing the points covered by the\r\nFinance and Transport Ministers during the Budget and Committee\r\nof Supply debates earlier this year. In the Minister for Finance's\r\nspeech on 17 February 2012, he referred to the Government's commitment\r\nto fund 550 buses as a \"one-time commitment\". In the Minister's\r\nround-up speech on 1 March 2012, the Minister stated that out of\r\nthe $1.1 billion package, $280 million was budgeted for the purchase\r\nof 550 buses, while $820 million covers net operating costs over\r\n10 years. The Minister also stated that should PTO's losses in running\r\nthe additional 550 buses turn out to be lower than expected, Government\r\nfunding will be reduced correspondingly.
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\r\n My first query relates to\r\nclause 7 which introduces section 13B(1)(e) to the Act. The section\r\nstates that \"there shall be established by the Authority of Bus\r\nService Enhancement Fund comprising [amongst others] − all investments\r\nand other property purchased out of moneys in the Bus Service Enhancement\r\nFund, including the net income from such investments\". Separately,\r\nsection 13B(1)(f) states that BSEF will comprise \"all interest received\r\non investments belonging to the Bus Service Enhancement Fund, and\r\nall amounts received by the Authority from the sale of any investment\r\nor other property paid for with money from the Bus Service Enhancement Fund\".
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\r\n In light of this, could\r\nthe Minister please explain the effect of section 13B(1)(e) and\r\n(f) that I have just highlighted, which give the Government wide\r\npowers to use BSEF funds beyond bus acquisition and accounting for\r\nnet operating costs as long as the object of these investments is\r\nto improve and expand the range and reliability of bus services?\r\nAt first blush, it appears as if the $280 million earmarked for\r\nbus acquisition and $820 million for net operating costs do not\r\nleave much scope for additional investment since this neatly comes\r\nup to $1.1 billion. If the PTOs do not use the entire $1.1 billion\r\nset aside for 550 buses, the Bill suggests that the BSEF will continue\r\nto exist to extend grants and loans to the PTOs. I understand from\r\nthe Minister that this is the case because it also accounts for\r\npotential future programmes. What this really means is that the\r\nBSEF would institutionalise\r\nactive Government intervention in the public transport sector for the\r\nlong term, until such a time the Government decides to dissolve\r\nthe BSEF.
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\r\n The proposed Bill will also\r\nallows BSEF funds to be employed for investment in any property\r\nin addition to the standard investment power of statutory bodies,\r\nas provided for in section 33A of the Interpretation Act, which\r\nis referred to in section 17 of the LTA Act. Could the Minister\r\nshare with the House the type of investments that the monies in the\r\nBSEF are envisaged to be used for, apart from those permitted under\r\nsection 33A of the Interpretation Act and, more specifically, the\r\nrisk profile of these envisaged investments?
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\r\n My second query relates\r\nto clause 7 introducing section 13B(2) to the Act, which gives wide-ranging\r\npowers to the LTA to withdraw BSEF monies to provide grants or loans\r\nto the holder of a bus service licence or a bus service operator's\r\nlicence. The inclusion of this provision clearly presages the use\r\nof BSEF to extend loans, not just grants − a point which I raised\r\nin my speech on the BSEF during the Budget debate, where I proposed that\r\nthe Government claw back the $1.1 billion from the two PTOs over\r\na fixed period of time.
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\r\n This question is quite central\r\nto the disbursement of $1.1 billion the taxpayer monies, as it is\r\nclear that the Government eschewed from extending the BSEF as a\r\nloan to the PTOs, even though both PTOs operate in near monopolistic\r\nmarket conditions and have announced healthy dividends for their\r\nshareholders over the years. Can the Minister please share with\r\nthe House what considerations the Government deliberated upon when\r\nit decided to extend the $1.1 billion BSEF to the two PTOs, as opposed\r\nto extending a loan − as we now know that this Bill also authorises\r\nthe Government to use the BSEF for the purpose of extending loans\r\nto PTOs and holders of bus operator licences? In addition, can the\r\nMinister also clarify what factors would determine when the LTA\r\nwould decide to extend a loan to a PTO or bus licence holder, as\r\nopposed to a grant from the BSEF?
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\r\n My third query relates to\r\nclause 5 to amend section 12(1) of the Act. Sections 13A and 13B\r\nrequire certain revenue streams to be channelled into the Railway\r\nSinking Fund and the Bus Service Enhancement Fund respectively,\r\ninstead of the Land Transport Revenue Account. The explanatory note\r\nto the proposed Bill states that the Minister will apportion this\r\nrevenue stream between the Bus Service Enhancement Fund on the one\r\nhand, and the Land Transport Revenue Account on the other. Would\r\nthe Minister clarify what is the expected ratio of apportionment\r\nbetween the two accounts?
\r\n
\r\n Finally, Mr Speaker, Sir,\r\nin the Channel NewsAsia report on 14 May 2012, it was reported\r\nthat the purpose of the BSEF was for the Government to set aside\r\nmoney to fund the commitment for the Bus Service Enhancement Programme\r\nand provide transparency and accountability as to the use of the\r\nmoney.
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\r\n I have a final clarification\r\nI seek from the Minister and this pertains to a point about the\r\npotential abuse, or even the creative use of the BSEF by the PTOs.
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\r\n For example, in anticipation\r\nof 550 additional taxpayer-funded buses on the roads, can the PTOs\r\ndeploy the taxpayer-funded BSEF buses rather than their self-financed buses\r\nto service existing routes which are comparatively less revenue-generating\r\nthan other routes? If so, the PTOs can plausibly improve their profit\r\nmargins by deploying their self-financed buses on the more profitable\r\nroutes, legitimately employing the BSEF to subsidise their operations as a whole.\r\nThis is conceivable since the Minister has stated that 300 of the\r\n550 buses will go towards supporting existing bus routes while 250\r\nwill be for new routes.
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\r\n The Minister also stated\r\nduring his COI speech that as an additional safeguard, the LTA will\r\nscrutinise the PTOs' actual costs for the purchase and running of\r\nBSEF buses. However, does this Government scrutiny extend to the\r\nselection of bus routes by the PTOs on which the BSEF buses will\r\noperate? The Finance Minister has assured the House that should\r\nthe PTOs' losses in running the additional 550 buses turn out to\r\nbe lower than expected, Government funding will be reduced correspondingly.
\r\n
\r\n However, there is nothing\r\nin this Bill that can protect the taxpayer from the shrewd use of\r\nthe BSEF by the PTOs – a scenario that should not be discounted\r\nbecause these are ultimately profit-generating entities fundamentally\r\nanswerable to their shareholders. Would the Minister demand strict\r\nand active regulatory oversight over the use of the BSEF such that\r\nthe prospects of abuse are significantly lowered? Can we have an\r\nassurance from the Minister that the LTA will be able to perform\r\nthis role and prevent the abuse of the BSEF, in light of recent\r\nquestion marks over the LTA's regulatory responsibilities with regard\r\nto the COI on SMRT disruptions? With that, thank you very much,\r\nMr Speaker.
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\r\n 5.32 pm
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\r\n \r\n \r\n Mr Gerald Giam Yean Song (Non-Constituency\r\nMember)\r\n : Mr Speaker, the Land Transport Authority\r\n(Amendment) Bill gives the Government the powers to fund and implement\r\nthe Bus Service Enhancement Programme (BSEP). The BSEP provides\r\nfor the purchase of 550 new buses over the next five years, the\r\nhiring of over a thousand bus drivers, and the funding of the maintenance\r\nand operational costs for these buses over 10 years. I support the\r\nobjective of the BSEP, which is to improve and expand the range and\r\nreliability of bus services provided to commuters. Like most commuters,\r\nI hope to see more frequent and less crowded buses, especially during\r\npeak hours. However, I have several concerns about how the Government\r\nis going about achieving this objective.
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\r\n The plans to increase the\r\nbus fleet to ease commuters' woes are long overdue. Over the past\r\n10 years, Singapore's population has grown by over one million people,\r\nyet the pace of expansion of our transport infrastructure and operations\r\nhas not kept pace. The Government's failure to expand our transport\r\ninfrastructure and operations in tandem with the influx of foreigners\r\nhas led to the current situation of long waiting times, overcrowded\r\nbuses and trains, and very frustrated commuters.
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\r\n [Mr Deputy Speaker (Mr Seah\r\nKian Peng) in the Chair]
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\r\n The Government has belatedly\r\nrealised that the quality of service (QoS) standards that the public\r\ntransport operators (PTOs) signed up to previously are not sufficient\r\nto meet the needs and expectations of commuters. But who established\r\nthese service standards? Is it not the Public Transport Council\r\n(PTC), which is an agency under the Ministry of Transport? Why did\r\nthe PTC set the bar for QoS so low? For example, the current QoS\r\nallows for bus loading of up to 95% capacity. This is a very generous allowance,\r\nconsidering it includes standing passengers, not just sitting passengers.\r\nI have boarded such\r\npacked buses before, where I have found myself standing on the entrance\r\nstairs, barely able to even reach the fare card reader to tap my\r\nezLink card. Despite this soft standard, both bus operators failed\r\nto meet the standards in three of the six months in the most recent\r\nQoS reporting period. They were issued paltry fines in the magnitude\r\nof $100 each time they were caught not meeting these standards.
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\r\n Now the Government wants\r\nto set more stringent QoS standards for the PTOs. Among these, the\r\nbus loading limit will be lowered from 95% to 85%. If the Government had\r\nset these more stringent QoS standards earlier, and rolled them\r\nout more gradually over the past 10 years in anticipation of our\r\npopulation boom, there would be no need to suddenly ramp it up now.\r\nBus operators could have planned their purchases of new buses and\r\nfactored them into their annual cost projections. This might have\r\ncut into their profit margins, but taxpayers might have been spared\r\nhaving to fork out $1.1 billion to help the operators meet these\r\nsudden new standards. The Government needs to answer for this planning\r\nand regulatory failure.
\r\n
\r\n A related question I have\r\non the QoS is whether it is really the case that the Government\r\ncannot increase the standards without breaching the contracts with\r\nthe bus operators. I understand the PTOs operate on 10-year contracts.\r\nWhen were the current contracts signed and when would they be up\r\nfor renewal? According to the PTC website, the QoS standards were\r\nrevised in August 2007, August 2008 and August 2009. Obviously,\r\nthese were done mid-way during the contract. Why are we being told\r\nnow that the Government cannot revise the QoS standards without\r\ncompensating the PTOs?
\r\n
\r\n A second broad concern I\r\nhave about the Bill is how the Government is going to ensure that\r\nthe subsidy does not get used, either directly or indirectly, to\r\nimprove the bottom lines of our very profitable PTOs. During the\r\nCommittee of Supply debate in March, the Transport Minister said\r\nhe was going to \"scrutinise the PTOs' actual costs for the purchase\r\nand running of the buses\" to ensure that PTOs do not profit from\r\nthis subsidy. Unfortunately, this Bill does not prescribe any mechanism\r\nfor such scrutiny. Is there any process in place to prevent the\r\nPTOs from acquiring spare parts or maintenance equipment, or conducting\r\nstaff training using BSEP funds that can be used to benefit the\r\nrest of their fleet? How will the LTA prevent the PTOs from making\r\nthe BSEP buses run only the unprofitable routes in far flung areas,\r\nwhile running the profitable routes using their own buses? In short,\r\nhow is the Government going to prevent BSEP funds from cross subsidising\r\nother parts of the PTOs' operations? Will the operations and accounting\r\nfor the 550 buses be managed by the PTOs, who will then report the\r\nfigures to LTA and seek funding accordingly? Will LTA take at face\r\nvalue all the figures the PTOs report to them? How will LTA audit\r\nthe reporting?
\r\n
\r\n Will the establishment of\r\nthe BSEP mean that LTA will need to set up another department to\r\nmanage and audit the operations of the PTOs? How many more staff\r\nis LTA going to have to hire to manage this 550-bus operation? How\r\nmuch is it going to cost? Is this cost going to be part of the $1.1\r\nbillion package or is it extra? And who is going to fund the operations\r\nand replacement of the 550 buses after the 10 years are up? Is this\r\nthe last such subsidy that taxpayers are going to give to PTOs?\r\nIf not, are we on a path to permanent operational subsidies being\r\ngiven to these two listed companies?
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\r\n Mr Deputy Speaker, during\r\nthe COS debate earlier this year, the Transport Minister, in arguing\r\nhis case for having profit-oriented companies run public transport\r\noperations, said that, I quote, \"the profit incentive drives the\r\noperators towards higher efficiency and productivity, which keeps\r\ncosts as low as possible\". This sounds ironic in light of all that has happened in the\r\npast year. Commuters have experienced the most serious and sustained\r\nseries of MRT breakdowns in its 25-year history. It was not just\r\nthe December 15 and 17 stoppages, but several other disruptions\r\non the Circle Line, the LRT, the Northeast Line and the East-West\r\nLine that took place after that, some of which occurred as the MRT\r\nCommittee of Inquiry (COI) was underway.
\r\n
\r\n Despite all the official\r\njustifications for the BSEP, there is no running away from two facts.\r\nOne, that bus service standards are not up to the mark and, two,\r\nthe Government is stepping in to the tune of $1.1 billion to subsidise\r\nthis service recovery. What higher efficiencies has the profit-oriented\r\nmodel brought us? We have not seen an improvement in service quality,\r\nbut a deterioration, especially over the past five years. We have\r\nseen fares increase but yet the Government still needs to pour in\r\nbillion-dollar operational subsidies. We have seen trains break\r\ndown due to underinvestment in maintenance, yet these companies\r\nare reporting hundreds of millions of dollars in profits each year.\r\nSince 2003, SMRT and SBS Transit have paid over $1 billion in dividends\r\nto their shareholders.
\r\n
\r\n Public transport is an essential\r\npublic good just like education, healthcare and public housing.\r\nThe returns from this public good benefit more than just the commuters themselves.\r\nWhen commuters are able to get to work quickly, conveniently and\r\nin comfort, their companies benefit from their more productive work.\r\nBy allowing them to reach home on time after work and with less\r\nfrustration, they can build better relationships with their families,\r\nand perhaps even raise the national fertility rate. The economy\r\nand society benefit when we have good and affordable public transport.\r\nThese positive externalities do not show up in the balance sheets\r\nof the PTOs.
\r\n
\r\n The BSEP seems to belatedly\r\nrecognise that greater Government investments are necessary to rectify\r\nthe market failure in the public transport industry. With this Bill,\r\nthe LTA will not just be a regulator, but will purchase the buses\r\nand fully fund their operations. Effectively the LTA, which is a\r\nGovernment agency, is going to be the de facto owner of a\r\nfleet of 550 buses plying our roads. However, it is neither here\r\nnor there. The BSEP does not introduce any competition to spur efficiency\r\nand service improvements, yet we do not have a full public monopoly\r\nwhich reaps the benefits of direct control, with profits being reinvested\r\nto improve service quality. It is the worst of both worlds.
\r\n
\r\n The public transport model\r\nhas a great bearing on the long-term outcomes of our public transport\r\nsystem. The focus of our bus and train operators should be on improving\r\nservice quality to meet or exceed commuters' expectations, not maximising profits\r\nfor their shareholders. Mr Deputy Speaker, Sir, as a daily commuter\r\nmyself, I share the concerns of many Singaporeans about the quality,\r\ncomfort and affordability of our buses and trains. The public transport\r\nfailures of the past few years have caused much angst among Singaporeans.\r\nIt is incumbent upon this Government to set things right, both in\r\nthe short term as well as in the long term.
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Page: 293
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\r\n 5.42 pm
\r\n
\r\n \r\n \r\n Asst Prof Tan Kheng Boon Eugene\r\n :\r\nMr Deputy Speaker, Sir, I rise in support of the Bill which seeks\r\nto significantly improve the quality of bus services over the next\r\nfive years. The public\r\ntransport system has been very much in the news, reflecting the sentiments\r\nand concerns of the average Singaporean over the system's reliability, affordability,\r\nand overall integration. Given the growing congestion on our roads,\r\non our trains and buses, the public transport system must rise to\r\nthe challenge or else Singapore could, in effect, become a car park!
\r\n
\r\n Sir, I use the public transport\r\nsystem on every work day. As it stands, the crowded buses, unreliable\r\nfrequencies, and poor service quality are a poor advertisement for\r\nour bus system. Anyone seeking to switch from private car travel\r\nto public transport will hesitate, given the litany of woes that\r\nwe hear, see and experience on a daily basis.
\r\n
\r\n Sir, the Transport Minister\r\nin March this year had informed us that the 800 new buses – 550\r\nfunded with Government's assistance through Bus Service Enhancement Programme\r\n(BSEP) and 250 from the bus operators – will also see the two public transport\r\noperators (PTOs) having to deliver higher service standards, beyond\r\nthe current requirements of the Quality of Service standards. At\r\nthe outset, I seek a clarification from the Minister: what happens\r\nif a PTO does not meet the higher service standards? Will the sanctions\r\nfor non-compliance be made known before the funds are disbursed?\r\nIn the interest of full disclosure, they should be made known.
\r\n
\r\n Sir, the Bill provides\r\nfor the Bus Service Enhancement Programme to finance a wide range\r\nof purposes. These include:
\r\n
\r\n • the purchases of buses;
\r\n
\r\n • the acquisition of immovable\r\nproperty;
\r\n
\r\n • the salaries of bus captains,\r\nthe running costs including fuel and maintenance;
\r\n
\r\n • investments in accordance\r\nwith section 17 of monies in the BSEP, to payment of principal or\r\ninterest borrowed; and
\r\n
\r\n • the set-up, administration\r\nand management costs of BSEP, including legal costs.
\r\n
\r\n Would the Minister enlighten\r\nus as to the ball-park percentages of the BSEP funds that will go\r\nto the various expense items, broadly defined? While I am not in\r\nfavour of legislators or bureaucrats micro-managing, my concern\r\nis that the BSEP becomes unwieldy with a significant part of the\r\nfunds going towards indirect operational costs such as the set-up,\r\nadministration and management costs. In short, notwithstanding the accountability\r\nthat is necessary for public funds, the financial assistance to\r\nthe PTOs should not become unduly burdensome in its administration.
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Page: 294
\r\n
\r\n Sir, the Bill also explicitly\r\nintroduces a new function for the LTA in order to allow LTA to implement\r\nBSEP. The Explanatory Statement to the Bill informs us that this\r\nnew function includes \"operational planning for bus services to\r\nmeet the needs and expectations of the public\". It goes on to note\r\nthat this function is \"without prejudice to the role of the Public\r\nTransport Council\".
\r\n
\r\n
\r\n
\r\n
\r\n Sir, issues of accountability\r\ncan be complex, if not blurred, where different regulatory agencies\r\nshare powers and responsibilities. While I doubt there will be a\r\nturf war between the two statutory boards, the LTA and the Public\r\nTransport Council, can the Minister clarify how the LTA's roles\r\nwill not duplicate, or conflict with, that of the Public Transport\r\nCouncil's? How would the two agencies coordinate better for the\r\nlarger benefit? Or\r\nwould we have a situation in which where one agency assumes that\r\nthe other is minding a particular operational planning subject-matter?
\r\n
\r\n In addition, I note that\r\nthis new function seeks to provide the LTA with \"operational planning\"\r\npower. How does this conflict with and compromise the LTA's role\r\nas a regulator? Would it not be timely and necessary to consider\r\na distinct separation of the regulatory arm and the operational\r\narm of the LTA? After all, the LTA should not regulate and/or audit\r\nits own operational planning. It is more likely than not, however,\r\nthat the LTA will not regulate or audit its own operational planning.
\r\n
\r\n Sir, the BSEP has been\r\ndesigned and presented as a financial assistance scheme to our public\r\ntransport operators. We have heard of and been given the assurance\r\nthat the PTOs will not profit from the injection of the buses and\r\nthe funds. At one level, that is accurate. During the Committee\r\nof Supply's debate on his Ministry on 7 March this year, the Minister\r\nfor Transport assured this House \"the $1.1 billion that the Government\r\nis putting into this programme is, in reality, a subsidy to benefit\r\npublic transport commuters so that they enjoy a higher level of\r\nservice. It is not a subsidy to the operators\".
\r\n
\r\n However, it is also important\r\nto appreciate that the public transport operators stand to gain\r\nfinancially and non-financially in the medium- to long-term if our\r\npublic transport system and the PTOs are held in high regard by\r\nthe users for its affordability, reliability, efficiency and effectiveness.\r\nIn this regard, the BSEP can play the catalytic and complementary\r\nrole in boosting public confidence in our public transport system.\r\nI hope the public transport operators would recognise that and be\r\nmindful of their social responsibility even as they pursue their\r\ncommercial interests.
\r\n
\r\n Notwithstanding my reservations,\r\nSir, I welcome this Bill. Thank you.
\r\n
\r\n
\r\n
\r\n
\r\n 5.48 pm
\r\n
\r\n \r\n \r\n Mrs Lina Chiam (Non-Constituency Member)\r\n :\r\nMr Deputy Speaker, Sir, I recall the debates in this House on the\r\nBus Service Enhancement Fund back in March during the Budget debate.\r\nThe consensus was that more buses are certainly needed but, for\r\nvarious reasons, our bus companies are incapable of funding these\r\nthemselves. Concerns were raised by Members of all political parties\r\nin this House as to the effectiveness of our hybrid public transport\r\nmodel, which adheres neither to genuine privatisation nor nationalisation,\r\nand yet seems to be afflicted by the problems of both.
\r\n
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Page: 295
\r\n
\r\n Clause 3B of this Bill empowers\r\nthe LTA in implementing the Bus Service Enhancement Fund to provide\r\nfinancial and other forms of assistance to holders of bus service\r\noperator licences to improve the range and reliability of the bus\r\nservices. This, of course, refers to the two big companies, SBS\r\nand SMRT, which effectively enjoy a monopoly of bus service operations\r\nin Singapore. My fear is that the two bus companies will come to\r\nrely on the financial and other forms of assistance from LTA like\r\na handicap. It is like a bail-out fund you know you can always fall\r\nback on when you cannot do your job properly. At its worst, it may\r\nbe a disincentive for the bus companies to operate efficiently.
\r\n
\r\n I believe the problem may\r\nlie in how our bus service licensing works. Some elements of market\r\ncompetition could be introduced to the process of awarding the bus\r\nservice licence to\r\na bus company. In London, for instance, operators bid for bus routes\r\nfrom the government body, Transport for London, in a tendering system.\r\nOther bus service models could be studied. In Hong Kong, franchised\r\nbus services, which are operated by some of the world's largest\r\nprivately-owned bus companies, run alongside with non-franchised\r\nservices which serve routes that are less profitable but still indispensable. These\r\nare just some of the ways which could create the right conditions\r\nfor our bus operators to operate more efficiently and not to be\r\nfixated on delivering big dividends to the shareholders which has\r\nno bearing on the bus service itself.
\r\n
\r\n Therefore, my question to\r\nthe Minister in relation to clause 3B of this Bill is, would he consider\r\nthe benefits of the Bus Service Enhancement Fund to potential new\r\nand rival bus companies? Would he consider ending the monopoly of\r\nSBS and SMRT? Would he at least consider reviewing the bus service\r\nlicensing process, now that SBS and SMRT stand to benefit from this\r\nhandicap? And, lastly, if the amendment Bill is passed, would the\r\nMinister set up a committee consisting of some independent members\r\nfrom the public to oversee the control of this Fund?
\r\n
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\r\n 5.51 pm
\r\n
\r\n \r\n \r\n Er Dr Lee Bee Wah\r\n : Mr Deputy\r\nSpeaker, Sir, transport was once the bane of our society. Buses\r\nwere overloaded, people had to fight to hang on for a ride, and\r\nschedules were chaotic. The Government stepped in and, with its\r\nintervention, came the merger of the bus companies. Things went\r\non for a smooth ride at least for a good period of time, and we\r\nhad the MRT on our shores. This time, however, the problem is different.\r\nIt persisted like the 100-day cough and refuses to go off despite\r\nprescribing various measures. The problems range from the lack of\r\nskilled bus drivers to mechanical breakdowns, inconsistent frequencies\r\nand over-crowdedness.
\r\n
\r\n The Transport Minister has\r\ntaken a step in the right direction to amend the Bill and give more\r\nattention to how public transport operators (PTOs) are managing\r\na key asset of the nation. I praise the Minister for his doggedness\r\nin turning up at each major incident to personally see how the operators\r\nare coping. He is dedicated and committed to solving the problems\r\nbefore him, though they may not be of his doing.
\r\n
\r\n In recent years, greater\r\nemphasis has been placed on expanding our train network. Up came\r\nthe North East Line, followed by the Circle Line, which no doubt\r\nbenefited many more residents greatly. The planning of bus routes\r\nand bus services seems to have taken a backseat. In fact, some bus\r\nroutes have even been cancelled or re-routed. This is a shame, because\r\nbuses can share the peak hour burden with the trains, as well as\r\nserve as an alternative form of transport during train breakdowns,\r\nif bus routes are efficient and reliable. I am glad to note that\r\nthe LTA plans to assist PTOs with improving the coordination of\r\nbus routes and scheduling of bus services.
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Page: 296
\r\n
\r\n I wish to take this opportunity\r\nto ask for a new bus service to Khatib MRT station for Yishun residents.\r\nThis is something I have requested several times in the last few months,\r\nand I have even raised the issue during this year's Committee of\r\nSupply Debate, but to no avail. I urge the Minister to give serious\r\nthought to this matter because regardless of how exemplary our train\r\nnetwork is, it would be of little use to those residents who have\r\nproblem in taking a bus or buses to the MRT station. I have in mind the\r\nresidents in Jade Spring and Dew Spring estate and other upcoming\r\nBTOs. They live between Yishun MRT station and Khatib MRT station.\r\nThe bus ride to Yishun MRT station\r\nis 10 minutes away, and residents have complained of waiting times\r\nas long as 20 minutes due to over-crowding. The total journey to\r\nthe MRT station alone adds up to 30 minutes. And there is no direct\r\nbus to Khatib MRT station.
\r\n
\r\n With four more BTO projects\r\ncoming up, heartlands will expand, more residents will be taking\r\nthe already overcrowded bus and they will require better connector\r\nservices. The problem of overcrowding of buses will worsen, and\r\nbus frequencies will fall behind further. I urge the Minister to\r\nadd more buses to existing bus services, including bus 806 and 969,\r\nand perhaps introduce parallel bus service during peak hours.
\r\n
\r\n In the meantime, PTOs should\r\nhire more drivers but ensure that bus drivers are well-trained to\r\nunderstand and abide by local traffic regulations, and are familiar\r\nwith their bus routes. I note with concern that SMRT bus drivers\r\nnow have to do six-day work week, including Saturdays. Although\r\nthey theoretically receive a salary increase, I am aware that some\r\ndrivers are unhappy about the new system and claim that the adjustment\r\nto their working hours and salary, in fact, does not lead to a salary\r\nincrease as SMRT claims. I hope that LTA will look into this and\r\nensure that the drivers are paid what they rightfully deserve, while\r\nworking hours that they are comfortable with. Otherwise, I fear\r\nthat this will compromise the safety of the commuters and also worsen the\r\nshortage of drivers.
\r\n
\r\n With the amendment of the\r\nBill, I understand that a fund will be established to finance the\r\nPTOs. There are some Singaporeans who believe that there are measures\r\nwe can adopt to improve our public transport system without utilising\r\npublic funds that can otherwise be placed to better use elsewhere.
\r\n
\r\n Our PTOs are private companies.\r\nThey are profit-run; they have reserves and banking facilities.\r\nAdvertising is a rich source of revenue for them. As corporations,\r\nthey can issue bonds to raise capital quickly without diluting the\r\ncurrent shareholders' equity. Do they require assistance from the\r\nGovernment? Why are they not investing their rich resources in improving\r\nour transport system? Why have they not prepared a comprehensive\r\ncontinuity plan in times of train breakdown? After all, even top\r\ncities with world-class transport systems are known to experience\r\na mishap every now and then.
\r\n
\r\n I quote Andrew Barr, Operational\r\nPlanning and Integration Manager of the London Underground, referring\r\nto his recommendations for a backup plan during a train breakdown\r\nwhich he presented at the Committee of Inquiry hearing for the 2011\r\nMRT breakdowns: \"fairly common sense and not rocket science\". Those\r\nwere his words.
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\r\n So, the various failures\r\nin our transport system are not due to lack of funding. They are\r\nthe result, perhaps, of poor management of resources or insufficient\r\nallocation of resources at the right place or at the right priority.\r\nWhat the LTA should do, instead of providing funds and resources\r\nto the PTOs, is to assist them with hiring management personnel\r\nwho actually know how to fulfil their duties, as well as drawing\r\nup guidelines and benchmarks, and ensuring that PTOs fulfil them.
\r\n
\r\n Meritocracy has always been\r\nthe foundation of our success; we reward those who perform well\r\nand, at the same time, we do not give the top jobs to those who\r\nare undeserving of them.
\r\n
\r\n If PTOs fail to perform to public standards,\r\nthe Government should step in once more, revoke their licences and\r\nde-privatise our transport system, at least until the persistent problems\r\ngo away, and Singaporeans get back our efficient and reliable transport system\r\nwe were once proud of.
\r\n
\r\n The above is the view of\r\nsome Singaporeans, including some of my residents, and I urge Minister\r\nto explain in detail why public fund is used to buy buses. For me,\r\nas a Member of Parliament, I would like to see better bus services\r\nfor my residents.
\r\n
\r\n We can say a lot about the\r\ngrand plans that we have to improve our transport services, but\r\nthe test of the pudding is in the eating.
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\r\n How will our residents benefit?\r\nHow will 800 new buses translate to meeting the residents' needs\r\nand expectations? When will this be done? And can this be done faster? Is\r\n800 buses enough? If not, can the Government invest more funds to\r\nmeet the residents' needs? Just now, the Minister urged us to be\r\npatient. I would like to respond, in Mandarin, in the form of a\r\nsong. \"你知道我在等你，吗？\" 我希望部长不要让义顺的居民痴痴地等下去。我们要看的是实际行动。 (\"Do\r\nyou know I am waiting for you?\" Yishun residents will continue to\r\nwait. What we want to see is practical action.) (In English):\r\nWith that, I support the amendment Bill.
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\r\n 6.01 pm
\r\n
\r\n \r\n \r\n Mr Png Eng Huat (Hougang)\r\n :\r\nSir, I am happy to note that commuters can expect better transport\r\nservices going forward. The $1.1 billion package by the Government\r\nto help public transport operators (PTOs) meet service levels in\r\nbus operations is, indeed, extraordinary.
\r\n
\r\n This Government has also\r\npulled out all the stops to ensure bus operations remain viable\r\ngoing forward by bearing the development and land costs for bus\r\nservice infrastructure. It will also allow PTOs to retain a portion\r\nof the advertising revenue from bus shelters.
\r\n
\r\n While this Government continues\r\nto tinker with the transport model, the introduction of the Bus\r\nService Enhancement Programme (BSEP) is nonetheless a tacit admission that\r\nprivatisation, particularly for bus operations, has not produced\r\nthe intended results as envisioned by the Government. I know the\r\nMinister has stated that the $1.1 billion package is a subsidy to\r\nbenefit commuters, not a subsidy to benefit the PTOs. But depending\r\non how you want to look at it, a glass can be half-empty or half-full.\r\nThe BSEP will definitely benefit the operators because it will lift\r\na huge burden off their backs in meeting enhanced bus service standards\r\nwithout hurting their bottomlines.
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\r\n The establishment of the\r\nBus Service Enhancement fund under section 13B of the proposed amendment\r\nto the LTA Act allows the LTA \"to provide for grants or loans to any\r\nholder of a bus service licence or a bus service operator's licence\r\nfor the purpose of improving and expanding the range and reliability\r\nof the bus services\". From the onset, the Government has already\r\ndecided to give the PTOs a grant instead of a loan despite the operators\r\nbeing financially healthy to begin with. These publicly-traded operators have\r\npaid out more than a billion dollars in dividends to their shareholders\r\nover the years.
\r\n
\r\n We must send a message to these operators\r\nthat it will not be business as usual after the gifting of the 550\r\nadditional buses that comes complete with drivers and full maintenance.\r\nBecause at the end of the day, the commuters should be the ones\r\nsmiling and not the shareholders.
\r\n
\r\n The two main reasons cited\r\nby the Government on the need to introduce the BSEP to help PTOs\r\nare: first, the Government cannot mandate the PTOs to add 550 buses\r\nto improve bus service levels beyond what is stipulated in the existing\r\nregulatory framework; secondly, the PTOs' bus operations are already\r\nrunning operating losses.
\r\n
\r\n While it may be seen as\r\nunfair to expect PTOs to meet higher bus service standards on short\r\nnotice, it is not unreasonable to expect these operators to have\r\nplanned for projected increases in ridership over the tenure of\r\ntheir service agreements. I believe the PTOs have done their projections.\r\nThat is why they have the provision and the ability to buy 250 additional\r\nbuses on their own to meet the growth in ridership.
\r\n
\r\n So, what went wrong with\r\ntheir ridership projections that this Government sees fit to come\r\nup with a shock treatment for bus operations to the tune of $1.1\r\nbillion? The clue lies in an article in The \r\n Straits Times on\r\n7 September 2010. It reads: \"On housing, Mr Goh acknowledged that\r\nthe surge of immigrants in 2007 and 2008 caught the Government by surprise.\r\nBut the Government had not stopped them from coming because the\r\nbooming economy needed workers\". Mr Goh Chok Tong went on to say\r\nthe National Development Ministry \"did not provide for the sudden\r\nsurge\" in its housing plans.
\r\n
\r\n Sir, when housing, which\r\nrequires long-term planning, can be caught by surprise by a surge\r\nin population growth, what hope is there left for public transport\r\nto avoid the sudden crush? When you have a problem housing the extra\r\nimmigrants, you will have a problem moving them. In fact, most of\r\nthe infrastructure and essential services will suffer the same fate.\r\nSo, the issue here is beyond the question of whether it is right\r\nor it is wrong to mandate the PTOs to ramp up their bus operations\r\nto cope with the rising demand. It is an issue where the right hand\r\ndid not know what the left hand was doing, and the problem began\r\nto snowball to a point where this Government had no choice but to\r\nimplement a $1.1 billion shock therapy to help bring back some sanity\r\ninto our transport system.
\r\n
\r\n I am happy to note that\r\nthe Government has decided to exercise more control in bus operations.\r\nThe Workers' Party has always advocated that. This will improve\r\nreaction time to meet any surge in demand for essential services\r\ncaused by inorganic growth in population in the future.
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Page: 299
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\r\n The next justification by\r\nthe Government on the need to help privatised and profitable operators\r\nrun their bus operations is also disturbing. Both the Finance and Transport\r\nMinisters have voiced their concerns about the viability of the\r\nbus industry going forward. The Transport Minister said \"the reality\r\nis that the finances of the bus industry have been deteriorating\r\nin recent years\" and that \"the PTOs' bus operations have been running\r\noperating losses for some time already.\"
\r\n
\r\n Sir, it is not correct to\r\nsingle out bus operations as a loss-making business to justify the\r\nneed to help PTOs. The operators are also given other cash cows\r\nto operate to make good money for their shareholders. Cross-subsidy\r\nis not an uncommon practice in business\r\noperations. Cross-subsidy is even more critical when it comes to\r\nessential services. It allows such services to continue even if\r\nthey may become unprofitable. If the PTOs are losing some money\r\nin bus operations, the train operations and advertising revenue\r\nare more than sufficient to cover the losses incurred in the running\r\nof the buses.
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\r\n I decided to find out how\r\nlong the PTOs have been running losses for the past five years beginning\r\n2007 for bus operations and how profitable the operators are as\r\na company. For bus operations alone, SMRT made a profit of $1.5\r\nmillion in 2007 but lost $20.1 million from April 2008 to March\r\n2012. The total bus operation P&L for SMRT for the five-year\r\nperiod is a loss of $18.6 million. But over the same period, the\r\ncompany made a total of $756.5 million in after-tax profit. Although\r\nSMRT lost money on bus operations for the past four years, the amount\r\nis minuscule when compared to the total profit made from other operations.\r\nIt is not easy for SMRT to run bus operations because it does not\r\nenjoy economies of scale. Its fleet size is only a third that of\r\nSBS Transit.
\r\n
\r\n The picture for SBS Transit\r\nis quite the opposite. For bus operations alone, the company made\r\na loss of $6 million in 2011 but made an operating profit of $71.4\r\nmillion from 2007 to 2010. So, 2011 was the only year it lost money\r\non bus operations for this period. Over the same period, the company\r\nmade a total of $236.2 million in after-tax profit.
\r\n
\r\n Sir, the case that the finances\r\nof the bus industry have been deteriorating in recent years and\r\nthat bus operations have been running operating losses for some\r\ntime already, does not hold true for SBS Transit. The company was\r\nrunning a healthy bus service with the exception of 2011. It is\r\nnot a coincidence that both companies lost money in 2011. Last year\r\nwas a challenging year for businesses that depend a lot on fuel and\r\nelectricity to operate. Oil prices ended 2011 up 13.3% to average\r\nnearly $111 a barrel for the year, as reported by Reuters.\r\nBut despite the volatility in oil prices, the most important thing\r\nto note is that both PTOs have healthy cash cows in the form of\r\nrail operations to keep their shareholders happy.
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\r\n The BSEP and PTOs make strange\r\nbedfellows. One entity in this unusual partnership is willing to\r\nspend without expecting a return while the other expects nothing\r\nbut attractive returns. The combination of these two entities may\r\nresult in a smoother ride for commuters but not a cheaper ride.\r\nThe combination of these two entities will not guarantee commuters\r\na stay in fare increases but it will guarantee shareholders attractive\r\ndividend yield for the next 10 years.
\r\n
\r\n I hope that, moving forward,\r\nthe Government does not see it fit again to dish out free money\r\nto profitable PTOs. These operators are not cash-strapped to begin\r\nwith, and no operator will reject free money to improve service\r\nlevels. As mentioned at the beginning of my speech, I am happy that\r\ncommuters can look forward to a better and less stressful public\r\ntransport service. I would like to ask for more bus services to\r\nHougang and Aljunied areas. I look forward to working with the LTA\r\nto improve bus services in the Aljunied-Hougang areas. Last but\r\nnot least, I want to thank the voters of Hougang for giving me this\r\nopportunity to serve them at the national level.
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\r\n 6.09 pm
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\r\n \r\n \r\n Dr Janil Puthucheary (Pasir Ris-Punggol)\r\n :\r\nMr Deputy Speaker, Sir, our public transport system has increasing\r\ndemands placed on it, both in terms of capacity, as a number of my parliamentary\r\ncolleagues have mentioned, as well as expectations from the public.\r\nThe operators, the regulatory agencies and the transport commission\r\nhave been under increasing scrutiny. Er Dr Lee Bee Wah has mentioned\r\nthe \"100-day cough\". It is a seductive temptation for a physician\r\nto use a medical analogy. Seeing as my colleague has brought it\r\nup, I will extend it. In the 100-day cough, there are three big challenges\r\nthat a physician faces. The first is to reassure the parent of the\r\nchild that everything will be okay in the end, and, second, that\r\nno medicine is going to provide you with a quick fix, and the third\r\nis that you know what is happening and you understand what is going\r\non. The Ministry of Transport, the Minister for Transport and the\r\nLTA have my sympathies. I commend MOT and LTA for the amendments\r\nto this Bill which seek to allow significant changes to both the\r\nregulatory and financing frameworks of our public bus services,\r\nin order to make right the current gaps. The amendments clarify\r\nand strengthen the role of LTA in the private-public partnership\r\nthat we have as our hybrid model and further emphasise and enhance\r\nthe hybrid nature of our national public transport system. Nevertheless,\r\nI have some concerns.
\r\n
\r\n Sir, the BSEP is targeted\r\nto meet the needs of bus commuters, but it has been described as\r\nan unanticipated \"catch-up\" measure where the provision of services\r\nwill follow sometime after the demand has grown. On one hand, this\r\nis commendable in that it reflects the willingness to do what is\r\nright, to put right the problem, and to do so in a comprehensive\r\nand decisive way. Rather than looking back at why the situation\r\nhas occurred – this has been discussed extensively – it is perhaps\r\nmore valid to ask, looking forward, what strategies the Ministry\r\nhas in general for our transport system to ensure that there is\r\nsome anticipation, some building ahead of need, some provision of\r\ncapacity in excess of demand. If we build capacity too far ahead,\r\nour trains and buses run close to empty for years, and we pay a\r\nfinancial cost. If our public transport services are bursting at\r\nits seams before we increase capacity, we pay a social cost. The\r\nMinister has described that there is a willingness to consider if\r\nthe BSEP is sufficient or appropriate and for it to be reviewed\r\nin the future. Can we avoid this situation in the future?
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\r\n Sir, the need for more bus\r\ndrivers, and the need to increase their salaries has been brought\r\nup. Some of the public discussion has been about the suitability\r\nof recruiting a large number of drivers from overseas. Is this concern\r\nvalid? Specifically, has there been an increase in the number of\r\nSingaporeans applying for the job, especially with the higher salaries?\r\nConcerns, such as the risks to the safety of commuters and other\r\nroad users, have also been raised. The assumption has been that\r\nwhile these additional drivers are essential to the provision of\r\na much-needed service, the large number of new drivers will be a\r\nrisk that needs to be managed. Are there steps that will be taken\r\nto ensure that the safety of commuters and pedestrians is not compromised?\r\nWill the training programme for the new bus drivers be enhanced?\r\nAnd are there plans to address the supervisory framework for these\r\nnew drivers?
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\r\n More buses on the roads\r\nwill be better for passengers. The services, especially those that\r\nply the heavily utilised routes, will increase in frequency and\r\nthis will ease the congestion within the buses, but what about on-road\r\ncongestion? If on-road congestion were perhaps better managed, the\r\nexisting bus fleet could provide a better service, and handle a\r\nhigher throughput of passengers. Some, such as Mr Gan Thiam Poh,\r\nhave raised the concern that there may be road congestion as a result\r\nof the increasing number of buses. I have to respectfully disagree.\r\nI do not believe that this will be a significant factor because, in truth, there\r\nwill be far more cars added to our roads over the same time period,\r\nwhich are going to affect congestion to a much greater degree. Are\r\nthere any new plans to manage traffic congestion in the near future?\r\nGiven that cars are our greatest contributor to road congestion,\r\nwould the Minister for Transport elaborate on the changes to the\r\nprojected COE growth numbers and is he, in particular, prepared\r\nto comment at what point we anticipate reaching a point of zero\r\ncar growth?
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\r\n Sir, as the COEs are turned\r\nover, what consideration is given to the utilisation of COEs by\r\nour taxi services? The reason I bring this up is that taxis can\r\nbe viewed, on the one hand, as a form of private transport – a private\r\ncar, but one that you hire for the duration of a journey, or they\r\ncan be viewed as an enhanced version of public transport – a transport\r\nservice at a higher charge to meet a specific time-limited need.\r\nWe can see taxis as an extension of public transport, and I believe\r\nwe should. Does the Ministry? Does the Minister intend to drive\r\n– pun intended – an increase in the size of the taxi fleet? Or,\r\nalternatively, an improvement in the provision of taxi services\r\ncan be made by ensuring that each taxi COE is optimally used. This\r\nis an issue because the utilisation of taxis, in terms of the number\r\nof hours a given taxi operates, is highly variable. A taxi that is\r\nsub-optimally operational has taken a COE that might be otherwise\r\nmore productively used
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\r\n Is there an optimum operational\r\nutilisation of a taxi, and, if so, how is this target achieved?\r\nCould the Ministry leverage on an improved provision of taxis, to\r\nfill the gaps where public transport is insufficient? Do we have\r\nenough taxis on the road, and are they being used optimally?
\r\n
\r\n Sir, returning to the Bill\r\nand the BSEF, a portion of the revenue currently received by the\r\nGovernment will be channelled to the PTOs. Will the PTOs have a\r\nrole in generating or attracting more advertisers to place advertisements?\r\nIs this a shift in their focus and role? Furthermore, should the\r\nPTOs require a loan from the Government, has consideration been\r\ngiven to how comparable these conditions will be to market rates?\r\nI would encourage that the conditions are supportive but not overly\r\ngenerous as these companies are publicly listed with their own shareholders,\r\nas has been pointed out many times. While we want to provide support\r\nso that our public transport is financially viable, we do need to\r\nstrike a balance to ensure that the companies will have to be prudent\r\nand responsible.
\r\n
\r\n Sir, the financing framework\r\nmerits further explanation and discussion. Despite repeated reassurances\r\nfrom the Ministry on this subject, members of the public and of this\r\nHouse continue to be concerned that public money is being used to\r\nhelp a private company turn a profit. As has been explained by Er\r\nDr Lee Bee Wah, the public continues to wonder if improving internal\r\ncross-subsidy would be better. Some are assuming that the operators\r\ncould continue as is, without any help, and, possibly, with minimal\r\nfare increases. Some of these concerns are, of course, inflated\r\nand inflamed, some as a result of misunderstanding, as has been\r\nbrought up before, a misunderstanding about the amendments to section\r\n6, where LTA takes on the role of being the route planner and central\r\nplanner, rather than leaving this to the PTOs. That has been misunderstood several\r\ntimes. Some of these concerns are inflamed as a result of misinformation,\r\nsome of which may be deliberate. The key points, that no profit\r\nwill be made as a result of the BSEP, that the assistance it provides\r\nto the operators will be calibrated and adjusted to ensure this\r\nis so, need to be explained and discussed. The public needs reassurance\r\n− reassurance that must be repeated and reinforced.
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\r\n Sir, the amendments to the Bill allow\r\nLTA to take the necessary steps to deal with some major current\r\nproblems affecting our bus services. They ensure that subsidies continue\r\nand that these subsidies are on the side of infrastructure and supply\r\nrather than primarily on the side of demand, and that this approach\r\nserves all Singaporeans. The amendments ensure that revenue from\r\nthe bus shelters can be put to work to improve services for commuters.\r\nThe amendments make explicit LTA's role as central planner as well\r\nas the provider of infrastructure. These amendments emphasise the\r\nhybrid nature of our system. They emphasise the intent to use a\r\nmodel of partnership between a private operator, a public planner\r\nand a public regulator to provide the best possible transport service\r\nfor our Nation. Sir, I support the Bill.
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\r\n \r\n \r\n Mr Lui Tuck Yew\r\n : Mr Deputy\r\nSpeaker, Sir, let me try to respond to all the comments, suggestions\r\nand views that have been expressed, and it has been a wide range\r\nof views. It ranges from \"why do\", to \"do now\", to \"do more\". There\r\nhave been expressions of clear, unequivocal support. There have\r\nbeen others that have stayed silent on this matter altogether, like\r\nMr Pritam Singh, and there have been others who have taken a more\r\nnuanced position, like Mr Png, who welcomes it but did not quite express\r\nsupport for it. I understand their concerns. Indeed, I will try\r\nto take this opportunity to explain it as best as I can. But let\r\nme also assure you that there is no intention whatsoever on my part\r\nto impose the benefits of the BSEP on your residents over your objections\r\nand against your principles. So, I would be very clear on that score.
\r\n
\r\n I would like to categorise\r\nthe points that have been made, and try and deal with them in a\r\nfew categories. I think there has been this nationalisation versus\r\nprivatisation issue that has been raised by both Mrs Chiam as well\r\nas Mr Giam. Related to it, why not more competition, why not take\r\nthe opportunity to look at a third operator? There have been views\r\non the bus financials, how it stands − and I think Mr Png did a\r\ngreat deal of work in researching the financials of the bus industry\r\nover the last five or six years − but also questions related to\r\nwhy we should not have the PTOs cross-subsidise between the rail and\r\nthe bus networks. There have been points that are raised about very\r\nfrustrated commuters, that bus services are not up to the mark,\r\nand these are points that have been raised by Mr Gerald Giam. So,\r\nI hope to talk a little bit about where exactly we are, lest people\r\nrun away with the impression that the whole system is so broken\r\nand so poor.
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\r\n I want to cite, for example,\r\nthe UniSIM study that is independently conducted every year, where\r\na direct question is posed to regular commuters of both the bus\r\nand the rail networks whether they perceive bus services to have\r\nimproved compared to the previous year. I shall use their response\r\nto the question to try and give an understanding of where exactly\r\ncommuters are as a whole on this issue, and also to talk a little\r\nbit more about what improvements we can expect.
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\r\n Lastly, I would want to\r\ntry and talk a little bit about the roles of PTC versus LTA, and perhaps\r\nto address some of the points that are raised by Mr Pritam Singh,\r\nand technical issues that are related to the BSEF itself. And if\r\nI do not manage to cover all of your queries or do not cover them\r\nadequately, please raise it again and I will try my best to answer\r\nthem.
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\r\n Let us start with nationalisation\r\nversus privatisation, and the issue of competition. Where do we\r\nstand? Our model is one where we allow private entities to operate\r\nand provide the services because it is our belief that it is in\r\nthe long-term public interest for them to be delivered and served this way.\r\nThere is a profit incentive that drives higher efficiency and productivity.\r\nBut ultimately it is not for the benefit of the operators themselves.\r\nIt is for the benefit of commuters because they will benefit through\r\nlower fare increases, and I will talk about fare increases versus\r\ncost a little bit later when I go into bus financials. But the room\r\nfor the operators to manoeuvre is not unfettered because there are\r\na number of safeguards that are in place. Firstly, the operators\r\ndo not set the fares. That is done by the PTC. Secondly, the operators\r\ndo not establish the standards. Again, that is a function that comes\r\nunder the PTC. Lastly, the licence is given to them for a limited\r\nand defined period. In the case of the buses, the licences will\r\nexpire in 2016. That is, again, another matter that we may have\r\nto come to and talk about under bus financials.
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\r\n I think it is a truism to\r\nsay that, perhaps, across all areas, not just in transport, that\r\nthe solution that is not adopted becomes increasingly more attractive\r\nover time and becomes the preferred solution. Indeed, it is a truism\r\nthat, over time, the solution that is not adopted becomes increasingly\r\nmore attractive as the solution. But before we tack and change\r\ncourse because the prevailing wind has changed, it is important\r\nto see what other cities and countries are doing. Are they moving\r\ntowards privatisation? Are they moving towards nationalisation?\r\nMrs Chiam and others have actually given some examples and I think\r\nit is useful to note that in many cities in the US, Europe, Australia and\r\nAsia, the move is actually towards privatisation. I give you a few\r\nexamples.
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\r\n For example, London. They\r\nwent into competitive tendering using privatised entities, I think\r\nsome time in the mid-1980s. And over the course of the next 15 or\r\nso years, cost per vehicle kilometre came down by more than 45%,\r\ninflation-adjusted. So, the lower operating cost per kilometre actually\r\nallowed services to be expanded by some 25% or so. Nonetheless,\r\neven in London where there is competition and privatised entities\r\nare running it, notwithstanding the increased efficiencies and productivity\r\nafter they moved away from nationalised companies running their\r\nbus services, today, Transport for London, or the government, subsidises\r\nbus services to the tune of about £500 million annually. And this\r\nis for a population of about, I believe, eight million people, running around\r\nabout 8,000 buses.
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\r\n Another example, in Taipei,\r\nthey have 14 private operators providing public bus services. Yet,\r\neven with all this competition, we understand from them – Minister\r\nof State Josephine Teo visited them recently – that they provide\r\na subsidy of more than S$100 million every year to subsidise bus\r\noperations for a population of about 2.6 million people.
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\r\n I will give you two more\r\nexamples in addition to what I have just mentioned. This is Sydney\r\nas well as the New York, New Jersey area. Here, it is quite interesting\r\nbecause they have partially privatised. So, some of the services\r\nare run by private companies and, at the same time, some of the\r\nservices are run by companies that are run by the transport authority.\r\nIn Sydney, we have been told that actually the private companies\r\nare able to run it at about 30% less in terms of the cost. In the\r\nNew York, New Jersey area, the bus routes that have been privatised\r\nhave operating costs that are about 35% lower compared to the routes\r\nthat the authorities are running themselves.
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\r\n So, I think there is a clear\r\nbody of evidence. One, that cities are shifting towards privatisation\r\nor have shifted, and at the same time that there are a number of\r\nthese cities where actually, notwithstanding the shift, there is\r\na need to provide a certain amount of subvention and subsidy from\r\nthe government in order to maintain bus services at a very high level. Therefore,\r\nthe question we need to ask ourselves is: why are governments subsidising\r\nprivate operators? Why not, as some have suggested, take it back themselves\r\nand run it? The answer must be that it will cost them even more\r\nto provide these services themselves and that, generally, efficiency-minded,\r\ncost-conscious governments are looking to have private bus operators\r\ninvolved when conditions allow them to do so. That is what I want\r\nto say for nationalisation versus privatisation.
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\r\n I want to take this opportunity\r\nto talk about us. Since the Government is stepping in – 550 buses\r\nis a significant increase which is about 14% or so increase over\r\nthe existing fleet − why not take the opportunity to introduce another\r\noperator? I think Mrs Lina Chiam was alluding to that, and it is\r\na fair question to ask. Indeed, we stepped through the thinking\r\nwhether this is an opportune time to bring about that competition\r\nand get a third operator in, and what are the pros and cons of doing\r\nso.
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\r\n Let me just explain that\r\nof the 550 buses, we think that about 300 buses will go towards\r\naugmenting the existing services. To some, it is because we need\r\nthe buses to come more regularly; to some, it is that the loading\r\nis nearer 95% than 85% and, hence, you need to inject buses in order\r\nto bring the loading down, and I will talk maybe a little bit about\r\nhow it is measured. But you have about 300 buses injected into existing services.
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\r\n You would appreciate that\r\nit is very, very difficult to have two operators providing this same\r\nservice because your current operator, maybe SBS Transit, will be\r\nproviding about seven buses, and then a new operator would come\r\nin to inject another one, or maybe, two buses. If the service does\r\nnot deliver the expected standards, who do we hold to account? SBS\r\nTransit or the new operator? In practice, it is actually very, very\r\ndifficult for existing routes to see two operators trying to provide\r\nthe same service in a co-ordinated manner in order for the commuters\r\nto benefit from it.
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\r\n What about the 250 buses\r\nthat are going to be used to run the 40 or so new routes? Would\r\nthat not be possible, because that is going to be delivered by one\r\noperator? So, a new route – if it is a feeder route – you may require\r\nfive or six buses. If it is a short trunk route, maybe somewhere\r\nbetween seven and 10 buses and so on. Why not allow a single operator\r\nto do it?
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\r\n The challenge is that we\r\nexpect these routes to be geographically dispersed. So, there might\r\nbe some routes in the North, some in the West, some in the East,\r\nsome parallel to the MRT routes, some providing connections that\r\ndo not exist to hubs -- financial, commercial, medical centres and\r\nso on. The difficulty with this geographical dispersion is: where\r\ndo you site the depots? Do you have a few depots, three or four depots\r\nin different parts of the island, with the attendent increase in\r\noverheads because you need people and equipment in order to set\r\nup and run a depot properly? Or do you site a depot centrally with\r\nlower overhead costs but, unfortunately, with more dead mileage\r\nbecause the buses at the end of their routes, wherever they are,\r\nwill have to return to this central depot to be maintained, to be\r\ncleaned and so on? It is not an easy solution to say, \"I want to\r\nintroduce a new operator using the BSEP.\" Nonetheless, I assure\r\nyou that our intention is to try and make right the bus financials,\r\nand thereafter, to make sure that we then put out packages of routes\r\nthat are carefully put together so that existing as well as potential\r\nnew operators can tender for them.
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\r\n Now, I come to bus financials. If your\r\nbus financing framework is not right, I think no new operator would\r\nwant to tender for a bus route package. Let me start by saying that, today,\r\nthe licences for operating the trains and the licences for operating\r\nthe buses are separate. They may be held by the same two operators\r\nbut they are separate in that it is not necessary for any operator\r\nto hold both train and bus operating licences. It is important to\r\nkeep them separate because it is going to be very hard for me, if\r\nI want to introduce a third operator, to be able to package a new\r\nrail line together with a bus licence at the same time. And, if\r\nwe expect cross-subsidies between the rail and the buses, then it\r\nis important that I am able to put this composite package together\r\nwhich practically is very difficult to do.
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\r\n Also, it is not always the\r\ncase that the rail operations can subsidise the bus operations.\r\nAnd therein is the danger that was raised by Dr Janil, that if you\r\nbuild too far ahead of time, there is a cost associated with it,\r\na cost that eventually is borne by the taxpayers. Members would\r\nremember, about 10 years ago, the introduction of the North East\r\nLine. The North East Line was planned in tandem with housing and\r\nother urban plans for the north-eastern corridor. Back in 1996 and\r\n1997, there were long queues for flats and MND had significant plans\r\nto increase sizeably the number of flats that are located in the\r\nnorth-east and, so, we went ahead, we built the North East Line\r\nand the LRTs. Unfortunately, the plans did not quite materialise.\r\nAnd so, in 2003, when we opened the North East Line, the ridership\r\nwas significantly lower than what we had projected. And, indeed,\r\nfor a number of years, that line lost money. It was actually the bus\r\noperations in SBST that was providing subsidy to the rail portion.\r\nAnd now, of course, as Mr Png has so rightfully pointed out, it\r\nis the reverse.
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\r\n If I come back to bus financials,\r\nwhat is happening is that the profit margins have gone down over\r\nthe years. And, in fact, last year for the first time, it was negative\r\nfor both operators. The trend is as important as the absolute numbers.\r\nMr Png talked about the SMRT over the last five years, how much\r\nthey have lost, SBST only over the last year, but it is important\r\nto look at what the trend is.
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\r\n For them, it is the balance\r\nof fares and costs that will ultimately give them some idea of how\r\nthe bus financials and, indeed, the transport financials are. If\r\nyou look at fares over the last five or so years, from 2006 to 2011,\r\nfares, cumulatively, not a single year but cumulatively, went up\r\nby 0.3%. Because of the recession, we brought down the fares. With\r\ndistance fares, we did away with the transfer penalty and, over\r\ntime, fares came down. And so, from 2006 to 2011, fares cumulatively\r\nwent up by 0.3%. What about fuel, which is a significant component\r\nof their costs? Fuel prices went up by more than 30%, while national\r\nwages went up by more than 25%. Hence, you see the dilemma that bus\r\noperators are facing, that the fare increases are nowhere near what\r\nthe cost increases have been in the recent years. Hence, that is\r\nan issue that we will need to address if we are to put the bus financials\r\nright over time, so that when I put packages of routes out for competitive\r\ntendering, there will be companies who are prepared to step in and\r\nprovide the service.
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\r\n Let me move on now to talk\r\nabout improvements. Before I do that, I want to take time to set\r\nright this impression – if I may quote Mr Gerald Giam again – \"very\r\nfrustrated commuters, bus services are definitely not up to the\r\nmark\". That is the impression that has been given. UniSIM does an\r\nindependent study every year. This is the public transport customer\r\nsatisfaction survey – done in October and released in March this year.\r\nIt is done in October of each year. In 2011, their study was done\r\nafter the fare increases took place. But obviously, it was done\r\nprior to the breakdowns that happened in December. Among the questions that were\r\nasked on satisfaction levels of the different parts of the transport\r\nnetwork, commuters were asked on their perception on whether bus\r\nservices have improved compared to one year ago. It is a \"yes\" or\r\n\"no\" answer. No \"in between'. You cannot fudge it. It is a \"yes\"\r\nor it is a \"no\". The exercise in 2011 – regular commuters who took\r\npart – 70.2% of them said that \"yes, bus services have improved compared\r\nto the previous year\". Obviously, the other 29.8% said \"no\". In\r\n2010, compared to 2009, 67.7% said \"yes\", that is, bus services\r\nin 2010 have improved over 2009.
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\r\n That is not to say that\r\nthere are no problems or no issues that we need to address. We know\r\nthe issues. We know the problems. We know the challenges, which\r\nis why the Government is prepared to step in decisively. But I think\r\nit is proper to paint the right picture and the right picture is\r\nnot massive dissatisfaction that – I quote again – \"they are all\r\nvery frustrated commuters\". There are, indeed, some frustrated commuters.\r\nAnd, indeed, they vent, particularly on the new media but I do not\r\nthink that those views represent the majority, not least because\r\nI use, for example, an independent UniSIM survey that has been conducted\r\nover a number of years for which we can see and follow the trends.
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\r\n What are the improvements\r\nthat we can expect of the BSEP? Well, firstly, the loading, we expect,\r\nwill improve. Today, it is a max loading of 95%, and we are going\r\nto bring it down to a max loading of 85%, measured during the heaviest\r\none-hour period. It is not as if all buses during that period will\r\nnot exceed 85%. I do not want to give you that impression. But it\r\nis that when you measure it in the same way that we do today, over the\r\nheaviest one-hour utilisation period, you will see an improvement\r\nacross the entire hour. For feeders, in terms of the regularity\r\nof arrival, we expect 95% of them to come at not more than 10 minutes\r\nfor the entire two-hour period instead of the 90% for the best one-hour\r\nperiod today. Today, it is measured over one hour, 90%, less than\r\n10 minutes. Going forward, with the BSEP, it is going to be for\r\nthe entire two-hour period, 95% of them coming at intervals of no\r\nmore than 10 minutes. There are other improvements which I will\r\nnot go into because of time constraints.
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\r\n Let me mention a little\r\nbit about PTC versus LTA as a regulator. The PTC has quite direct\r\nresponsibilities. Let me scope it as follows: they regulate bus\r\nservice levels and transport fares, and they do so with two objectives\r\nin mind: One, to keep fares affordable; and, two, to ensure the\r\nlong-term financial viability of the PTOs. Keeping fares affordable,\r\nI have shared some of this information in the past. We measure the second\r\nquintile, meaning, people from the 20th to the 40th percentile,\r\nbecause we think that that is the appropriate set to measure against.\r\nWe find that expenditure on transportation versus household income\r\nhas declined from about 5-plus percent in the mid-2000s to now.\r\nIt is about 3.6-3.7%. This is the percentage of the household income that\r\nis spent on transportation. What we have been able to do is to keep\r\nfares reasonably affordable and, indeed, if you compare fares to\r\nwhat you see in Hong Kong, London, New York and other major cities\r\naround the world, I dare say that we are actually lower than what\r\ntheir residents have to pay.
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\r\n Why then is it so important\r\nfor us to do this BSEP package? Why is it not possible for it to\r\nbe funded in other ways? One, we do this programme because we want\r\nto decisively increase capacity. This is related to what Dr Janil\r\nhad brought up, which is making sure that there is sufficient capacity\r\nbecause, otherwise, there is a social cost that we have to pay.\r\nHe is right. When we put in the BSEP programme, it is in recognition\r\nthat the operators,\r\non their own, because of the bus financials, would not have been\r\nable to do so. If we wanted them to achieve this same set of standards\r\non their own, it would take so long, because they would only introduce\r\nnew buses in tandem with, if not maybe just slightly ahead of, ridership\r\ngrowth, that I would not be able to answer Member Er Lee Bee Wah's\r\nrequests for more bus services in her constituency.
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\r\n The Government recognises\r\nthat even with the investment of $60 billion to build new rail lines,\r\nbuy more trains, implement re-signalling, and so on, we need to\r\ndecisively ramp up bus capacity so that we have a better last-mile\r\nconnection because many people would take a feeder bus, rail, and\r\nmaybe another feeder bus, to reach their final destination; or it\r\nis to provide better connectivity to areas that are not as well\r\nserved; or it is to provide an extra alternative to those who may\r\nnot wish to take the trains and would rather take a parallel bus\r\nservice that would run parallel to some of the existing rail lines.
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\r\n So, the PTC has that responsibility\r\nto, as I have said before, make sure that fares are affordable but\r\nalso, at the same time, look to the long-term financial viability\r\nof the operators. Because bear this in mind: 2016 is the expiry\r\nof the licence for the bus operators. They have been, over the years,\r\nproviding a cross-subsidy within their companies from rail to bus.\r\nFor SBS, earlier days, it was from bus to rail and, now, vice versa.\r\nBut legislative requirements today do not require them to do so.\r\nWe do not require them to do so because these are separate licences\r\nand, as I have said earlier, if we want to be able to introduce\r\ncompetition in the longer term, bring in more operators to put additional\r\npressure on the existing two incumbents, then it is necessary for\r\nus to make right the bus financials.
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\r\n Let me briefly address some\r\nof the points that Mr Pritam Singh had raised – this thing about\r\nwhat are we investing the BSEF money in, and so on and so forth,\r\nif I got him correct. Firstly, the intention of the BSEF is actually\r\nto make sure that funds are available to buy new buses, as well\r\nas to operate them over a period of 10 years. The primary intention\r\nof such a fund is not to put aside $1.1 billion and then to try\r\nand invest them and bring returns – that is really not the purpose.\r\nBut we also know that the funds are not going to be disbursed immediately,\r\nit is not going to be disbursed in one lump sum to the operators\r\nso that they can take and keep the money and use it over time. It\r\nis to be disbursed to them in order to cover the purchase of new\r\nbuses as and when it happens and the operating costs of these 550\r\nbuses.
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\r\n In the meantime, we need\r\nto make sure that the fund with LTA is properly invested because\r\notherwise I can imagine that some years later, we may well be asked\r\nthe same corollary question of why it was not invested in safe instruments\r\nin order to bring in some returns. But, as I have said, that is\r\nnot the primary purpose of the fund. It is that, as good stewards,\r\nwe ought to, in the meantime, make sure that whatever money that is\r\nin the fund is invested in safe instruments and, when the need arises,\r\nwe disburse the appropriate amounts to the operators to reimburse\r\nthem.
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\r\n Why not claw back the $1.1\r\nbillion? This was another question that Mr Pritam Singh raised.\r\nIt is back to the same reasoning over where the bus financials are.\r\nWhen we actually discussed this programme with the operators, contrary\r\nto your expectations that they would be really forthcoming in terms\r\nof wanting to bring on board the buses and run these services, they\r\nwere very concerned. They were very concerned because they knew\r\nright from the start that there was no upside and they had to make\r\nsure that they were properly protected to make sure there was no\r\ndownside for them. For us, it was\r\nthe opposite. We wanted to make sure that there was no upside for\r\nthem and, hence, even till very recently, there is a lot of debate\r\nand a lot of dotting the \"i's\" and crossing the \"t's\" in order to\r\nmake sure that we have as definitive an agreement as possible. But\r\nI give you my assurance that this is not intended to profit the\r\noperators. I know their concerns, I know their fears, but the way\r\nwe want to use this money is to make sure that the commuters benefit\r\nfrom having more reliable, more frequent, less crowded buses. Certainly,\r\nthe intent is not for this Government to give money to the operators\r\nin order to fatten their bottomline. Not at all.
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\r\n So, as I have said earlier,\r\nthe new routes, as well as augmentation to the existing routes,\r\nwill start in September this year. I hear already your requests\r\nto do more, and to do so now. Again, the constraint is going to\r\nbe drivers. Dr Janil Puthucheary also mentioned this concern over\r\ndrivers, whether they are appropriately trained for safety and so\r\non. So, maybe I will take a little bit of time to talk about drivers.\r\nThe bus operators have been able to recruit somewhat more drivers\r\nfrom both Singapore and, especially Malaysia, after the increase\r\nin the remuneration package. As they are close to or have already\r\nhit the quota for drivers from China and the Ministry of Manpower\r\nis not relaxing it to support the bus sector, they have confined\r\nthemselves to recruiting more Singaporeans and more Malaysians.\r\nMalaysians, I think, are more forthcoming. Singaporeans are still\r\nsomewhat less so, even though the numbers have increased. But in\r\nterms of training, local drivers get nine weeks of training, the\r\nforeign drivers get a little bit more. Nine weeks, I think, is a\r\nsignificant time, not only to familiarise themselves with several\r\nnew routes that they may have to operate but also to understand\r\nthe local context a little bit better, especially so if they are\r\nforeigners – the language and nuances, a little bit of the culture,\r\nand so on.
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\r\n There is always a concern\r\nover safety when there is any significant increase in new drivers\r\nand I have asked the PTOs to pay special attention to this, to make\r\nsure that we operate our bus fleet as safely as possible. Today,\r\nthe standard that is set for them is no more than 0.75 accidents\r\nper 100,000 kilometres. For those of us who are driving cars, you\r\nwill think that over the course of your 10 years, you may drive\r\nabout 200,000 kilometres, and so over the course of the 10 years,\r\nif you exceed more than one-and-a-half accidents, you would have\r\nbusted this number. So, I think it is a reasonably stringent standard\r\nthat we have set for the operators and I know that certainly over\r\nthe last six months that the PTC audited that they did not exceed\r\nthis 0.75 accidents per 100,000 kilometres. We give you the assurance\r\nthat we will continue to pay great attention to safety and to make\r\nsure that bus drivers, especially the new drivers that are brought\r\nin, know what they are required to do, namely, understand the needs\r\nof commuters, particularly of the more elderly residents, and drive\r\nwith due care the buses that they operate. On that note, Mr Deputy\r\nSpeaker, thank you.
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