Bus Service Enhancement Fund: a bail-out fund for SBS, SMRT?

Land Transport Authority of Singapore (Amendment) Bill, No. 15/2012

SUMMARY

- SBS and SMRT may come to rely on the financial and other forms of assistance from the Bus Service Enhancement Fund (BSEF) like a handicap

- Question to the Minister: will the BSEF be extended to potential new and rival bus companies?

- Monopoly of SBS andSMRT should be ended, more market competitionshould be introduced to process of awarding the bus service route licenses like in Hong Kong and London

__________________

Mr Speaker sir,

I recall the debates in this House on the Bus Service Enhancement Fund back in March, during the Budget debate. The consensus was that more bus are certainly needed, but for various reasons, our bus companies are incapable of funding this themselves. Concerns were raised by Members of all political parties in this House as to the effectiveness of our hybrid public transport model, which adheres neither to genuine privatisation nor nationalisation, and yet seems to be afflicted by the problems of both.

Clause 3B of this Bill empowers the LTA, in implementing the Bus Service Enhancement Fund, to provide financial and other forms of assistance to holders of bus service operator licenses, to improve the range and reliability of their bus services. This, of course, refers to the two big corporations, SBS and SMRT, which effectively enjoy a monopoly of bus service operations in Singapore.

My fear is that the two bus companies will come to rely on the financial and other forms of assistance from LTA like a handicap. It is like a bail-out fund you know you can always fall back on, when you cannot do your job properly. At its worst, it may be a discentive for the bus companies to operate efficiently.

I believe the problem may lie in how our bus service licensing works. Some element of market competition could be introduced to the process of awarding the bus service license to a bus company.

In London, for instance, operators bid for bus routes from the government body Transport for London, in a tendering system.

Other bus service models could be studied. In Hong Kong, franchised bus services, which are operated by some of the world’s largest privately-owned bus companies, run alongside non-franchised services, which serve routes that are less profitable but still indispensible.

These are just some ways which could create the right conditions for our bus operators to operate more efficiently, and not be fixated on delivering big dividends to their shareholders, which has no bearing on the bus service itself.

Therefore, my question to the Minister in relation to Clause 3B of this Bill is – would he consider extending the benefits of the Bus Service Enhancement Fund to potential new and rival bus companies? Would he consider ending the monopoly of SBS and SMRT? Would he at least consider reviewing the bus service licensing process, now that SBS and SMRT stand to benefit from this handicap measure?

Thank you.

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