More expensive to travel by bus than train

Come October 2007, public transport fares are going up again. To be exact, only bus fares will see an increase while train fares will be unchanged.

In announcing the latest fare hike, Public Transport Council defended its decision to approve this year's fare revision: both wages and transport fare affordability improved, and the profit of operators are not excessive, so there are no "extenuating circumstances" not to grant the full 1.8% allowed this year to buses. The same fate cannot be said of train: their profit indicator is showing that they are performing too well last year to deserve a fair revaluation of their fares.

As such, the decision to raise only bus fares but not train fares created an interesting phenomenon. Train systems are known to be expensive to operate, which is why it goes without dispute that train fares are higher, if not comparable, to bus fares in almost all cities in the world. The latest revision bucked this trend. In fact, we might have created a world first in land transport industry by allowing bus fares to be more expensive in close to half of the approved fare band.

Responding to PTC's announcement, SMRT rightly pointed out this:

“The latest increase in bus fares will cause SMRT train fares to be cheaper than bus fares in five out of the eight fare bands.”, said Mr Yeo Meng Hin, Deputy President & Chief Operating Officer, SMRT Corporation Ltd

To illustrate this awkward trend, please refer to the graph I've drawn up below (you may wish to click on it to see an enlarged version).


Note that the fares quoted above is for Adult ez-link fare, and the band is following train fare band which has finer graduation of 16 bands compared to bus fare band which has only 8. As you can see, bus fares are more expensive than trains for travel up to band 7, which is the equivalent of about 12km travel. If you're travelling from the city, it is roughly equivalent to travelling from city area to either Buona Vista (west), Paya Lebar(east) or Bishan (north).

Come 2007, do think twice about hopping on a bus for short trips. If you're travelling a distance less than about 12km, it is cheaper to travel by train than bus. You could potentially save up to 11 cents per trip!

For more information, please refer to the following press releases:

• PTC
• SBS Transit
• SMRT

Top management of LTA, SBS Transit and SMRT

After the Nicoll Highway incident that claimed three lives and delayed Circle Line project, LTA welcomed a new CEO Mr Yam Ah Mee. Except for a few minor reorganisation to ensure more safety, LTA's top management was pretty stable. However, there had been some turbulence over the past year. Two top management left in late 2006. Now, another two left. The latest departure is reported in an article by Straits Times (attached below).

2 more directors quit

THE Land Transport Authority, beset with top-level resignations in recent months, has lost two more group directors.

Group director of roads Tham-Lee Siyou Kim, who is in her 50s, has quit. So has Ms Rebecca Teo, 47, group director of corporate services. Both left in May without new jobs. They were among nine top managers reporting to chief executive Yam Ah Mee, 49.

In January, deputy chief executive Low Tien Sio and director of policy and planning Eng Sok Yong quit.

Mr Low, 60, is now with a team building the Sentosa integrated resort, while Ms Eng, 39, is with corporate development at transport group SBS Transit.

Other LTA honchos who have left include former chief executive Ho Meng Kit, 50, and director of projects Rajan Krishnan, 56, who left soon after the Nicoll Highway collapse in 2004.

With the latest departures, Ms Maria Choy, in her late 50s, is the only 'old guard' LTA group director remaining. She heads the vehicle and transit licensing unit.

Source: The Straits Times (17 July 2007)

Unless we have insiders' news or the press decided to investigate further, we would not know the reasons of their departure. It just quite bewildering that top management people are leaving a company without a job. I do reckon they could be retiring early. However, that contravenes the government's effort in promoting a more elderly workforce.

For SMRT, all the old guards of former bus company TIBS had left, with the exception of Mr Morris Piper. The departure were inevitable for a merged company as it is usual that the staff in the acquired company leave. The only surprise is the departure of former Executive Vice President and Chief Financial Officer, Mr Patrick Lau, who left in 2006. He is now heading a company reproducing famous art works.

For SBS Transit, Executive Director Mr Ong Boon Leong left in April 2007 to heed higher calling. There are no other departures.

Out of the three organisation, SBS Transit seems to be the only organisation with stable top management. In fact, they manage to rope in former LTA high-flyer Ms Eng Sok Yong to join as Senior Vice President (Corporate Development). With her experience in LTA, she now oversees the departments in the support area, with key focus on finance, human resource, information technology and corporate communications.

Personally I feel that such drastic movement is unhealthy. Especially in this times where the land transport industry is at an important juncture. LTA is currently undertaking a review of the industry, and it is better to have people who understand the land transport industry. Nevertheless, having new blood could bring fresh perspective to this industry that had seen little progress in recent years.

Let's keep our fingers crossed.

A tale of two companies

Yesterday, Singapore’s exchange market was rife with speculation about a possible merger of the two land transport giants: ComfortDelGro and SMRT. As a result, their share prices skyrocketed between 5.9% and 6.6% at closing.

ComfortDelGro is the “world’s second largest public listed land transport company with a fleet of more than 40,000 vehicles”. It is the parent company for Comfort and SBS Transit which are the market leaders in taxi and bus industry in Singapore respectively. SMRT, the market leader for train services, is a multi-modal public transport company offering train, bus and taxi services, as well as expertise in consultancy and project management in railway systems. Both companies have advertising arms.

In a newspaper report by The Straits Times (attached below), it was reported that ComfortDelGro has submitted a position paper to the Ministry of Transport, giving their two-cent worth on how the public transport industry should be structured. Two specific suggestions are given: to merge with rival SMRT to create one big giant transport company, or to have two separate companies with different areas of expertise – one running buses while another operating trains. (Note: It should be quite obvious that SBS Transit will be the natural bus company and SMRT will be the train company).

It is not hard to fathom why ComfortDelGro is keen to push for the two scenarios because they will have the upper hand in both scenarios. For the first scenario, if they were to merge with SMRT, it would most likely to be a take-over exercise rather than merger. With a market capitalisation of S$4.8 million over SMRT’s S$2.6 million and a ferocious appetite for aggressive acquisition, it would be quite unthinkable that they are willing to “merge” with SMRT. I speculate that they would have said something like this in their position paper:

Having a one giant company would create a company that can offer a holistic transport solution to Singapore with economy of scale. Also, by taking over merging with SMRT, we will hasten the process of achieving our mission of creating the world’s number one land transport operator. This would be Singapore’s pride: the largest land transport operator which is profitable.”

For the second scenario, though left with buses only, they will be able to use buses to compete with the trains by offering point-to-point services and direct bus services which are what the passengers wanted – faster and more direct services without the hassle of transfers.

Hitherto, SMRT has not yet put forth any position paper. Judging by their rival’s move, I would think they would be forced to come out with one. Already, they are managing shareholder and market’s expectation by responding to media about the position paper submitted by ComfortDelGro. A day after the news was reported, SMRT responded:

“(SMRT) Having operated trains and buses for over five years, we have grown to understand the synergistic benefits of a multimodal model. This is our preferred mode.”

What could we read from this statement? It could mean that they are supportive of the merger to create one big giant company, but this is quite unlikely as they will be a takeover subject. Another possibility is that they are against the one-bus-one-rail industry structure advocated by their rival. It is not hard to think why they are against bus-rail competition because the bus company could employ a bus network strategy that degrade the attractiveness of feeder buses to train stations while offering direct trunk services that offer door-step services or point-to-point services to compete with the trains (which SBS Transit is already doing so by replacing feeder services with passing through trunk services). Without the support of feeder buses, the trains will be left with pockets of small catchments area around the train stations.

What then is the government preferred industry structure? Minister for Transport Raymond Lim had previously state that there is no sacred cow that cannot be slaughtered, but they would not be slayed for the sake of doing so. Ultimately, with a pragmatic government, what is more important is to find solutions that achieve the outcome they want, rather than be engaged in an academic argument that debate which theoretical model best fit Singapore.

So far, the Ministry has made clear that in the next 10 to 15 years, the key solution to land transportation is to make public transport more attractive. It can no longer act as a captive market which attracts users who are unable to afford a car. As part of the land transport industry review, Ministry of Transport and Land Transport Authority have lately engaged the public in first of the many focus groups. One issue touched on is the possibility of bus route-tendering system, where bus routes are centrally planned by an independent body while the operation of the routes is being awarded to bus transport companies through competitive bidding.

In light of this, you might want to add one more possible industry structure to ComfortDelGro’s list: one rail company with multiple bus companies with route tendering.

Let us continue to wait in anticipation for the final outcome of the public transport industry review.

ComfortDelGro shares climb on SMRT merger whispers

Shares in ComfortDelGro, operator of the world's second-largest fleet of buses, taxis and rental vehicles, gained as much as 6.8 per cent after a report said chairman Lim Jit Poh suggested a merger with rival SMRT Corp.

Mr Lim's other proposal reportedly was for one company to operate bus services and the other to run Singapore's subway system to boost the use of public transport. The company does not comment on market speculation, spokeswoman Tammy Tan said.

Singapore is encouraging more people to use public transport to ease road congestion. The Ministry of Transport is reviewing the public transport sector.

“This piece of news could lead to more analysts factoring in the possibility of Singapore having one operator for rail and one operator for the bus system,” UOB Kay Hian analyst Leng Seng Choon said.

Shares of ComfortDelGro gained 13 cents (5.9 per cent), to $2.33 at the close of trading, while SMRT shares jumped 11 cents, (6.6 per cent), to $1.77.

SMRT, Singapore's biggest subway operator, also provides bus, taxi and charter services.

“Having operated trains and buses for over five years, we have grown to understand the synergistic benefits of a multimodal model,” SMRT said in an emailed statement. “This is our preferred mode.” — Bloomberg

Source: TODAY, 21 April 2007

Mega-merger of transport operators or separate all-bus, all-train entities
By Christopher Tan, Senior Correspondent

TRANSPORT giant ComfortDelGro's chairman, Mr Lim Jit Poh, has made a formal proposal to the Government on restructuring the public transport industry.

The Straits Times understands he is suggesting two options:

• A mega-merger with rival SMRT to create a single public transport group, or
• Have one operator run the buses and the other, trains.

Mr Lim has in the past mooted 'inter-modal' competition between separate all-bus and all-train operators.

He submitted his paper to Transport Minister Raymond Lim, following the ministry's call six months ago for an industry review to raise public transport ridership sizeably.

The paper was mentioned in the latest annual reports of ComfortDelGro and its subsidiary SBS Transit, although its contents were not revealed.

The Transport Ministry would not say what ComfortDelGro has proposed, but its spokesman said: 'We treat these as useful inputs coming from a key stakeholder and will give due consideration as part of the ongoing land transport review.'

The ministry is expected to release results of its review by year-end.

Currently, the two key stakeholders - SBS Transit and SMRT - have bus and train operations. SBS Transit does not make much money from rail and SMRT does not make much from buses.

Caught in the middle are commuters who complain that travel in many parts of the island is far from 'seamless'.

In the present set-up, commuters find they require more transfers to get to their destinations because too many bus services were removed to avoid duplicating MRT services.

In his chairman's statement, Mr Lim said: 'I note the public calls for more competition. I also note the cry for centralised and integrated services. These are extreme positions.'

In its General Household Survey 2005, the Department of Statistics found that although buses were the public transport network's fastest way to get around, the proportion of commuters who could take a straight bus to work had fallen from 25 per cent in 2000 to 21.9 in 2005.

The proportion who had to take both bus and train went up from 13.9 to 15.1 per cent.

Asked for her comments on the two options, SMRT president Saw Phaik Hwa said it was unnecessary to overhaul the industry, but improvements could be made.

Ms Saw said a bus-versus-train set-up could mean duplication of resources and, as a result, higher fares. She also said it may not be environmentally sound.

'That's what's happening in Hong Kong, where you see buses occupying five lanes in Causeway Bay. The pollution is bad,' she told The Straits Times yesterday.

The suggestion for one operator to run all the trains was made in 2003 by former transport minister Yeo Cheow Tong, who said 'a lot of the overheads can be saved'.

He even said SMRT would be allowed to operate all future lines if it took over SBS Transit's North-East Line (NEL), which was loss-making then.

Ms Saw said she would not acquire a loss-maker.

But last year, the NEL became profitable. Asked if she would now reconsider her position, Ms Saw said: 'I don't have a problem running the NEL, but the price must make sense. It's a business deal.'

Source: The Straits Times, 20 April 2007

Welcome aboard SMRT

Lately I've been thinking of going on a getaway to anywhere that's accessible by flight. I missed the Changi experience (which strangely was pipped by KLIA in airport ranking lately), the experience of flying at a mile above ground, and also the pilot greeting which usually goes like this:

"A very good afternoon to you ladies and gentlemen. From the flightdeck, this is your captain speaking. I would like to welcome you onboard this flight SQ2 to Hong Kong. Our flight time this afternoon is about 3 hours and 20 minutes. [...] On behalf of the crew onboard this aircraft, we wish you a pleasant flight."

My wish came sooner than expected.

Today while I transferring at Jurong East MRT station, I heard the following announcement while I was seated in the train waiting for it to depart:

"Good afternoon passengers. Welcome aboard SMRT. We hope you have an enjoyable journey with us. Thank you."

I was pleasantly surprised by the friendly greeting made by the train officer (i.e. the person driving the train). It sure perked up the otherwise boring train ride. Since when did SMRT upgrade their train officers to train pilots? [Post note: I read in a forum that another person heard a similar announcement on 9 Apr which goes like this: "Good evening passengers, the train is about to leave towards Marina Bay shortly. On behalf of my colleagues, I wish you a safe and pleasant ride on SMRT. Thank you."]

Some digression. As it is not a pre-recorded announcement, I am sure this is an isolated incident of an overenthusiastic train officer trying to go the extra mile in customer service -- which is perfectly fine as the message is pleasant. However, imagine how the same train officer would react if the pre-recorded message could not be played due to technical error? I cannot fathom how he will replace the "Doors closing... dooo....dooo....doooo..........". (By the way, do let me know how many "doos" are there if you manage to count.)

Upon alighting at my terminal station, I noticed that gone are the lines and lines of advertising messages promoting their failed Dhoby Xchange and SMRT Link shuttle. Instead, the junk messages are replaced by a simple static statement of "Welcome to Woodlands station".

Without having to pay attention to the junk messages, travelling by MRT is a better experience. It would be better if they also stop playing the free shuttle bus announcement during weekdays (because it's not operating!). And to SBS Transit, please give us back the quiet environment by muting the TV Mobile. That's all I ask of you...

New bus service guides

Has anyone noticed the new bus guides? There are two new bus services guides: one for Yishun Town and another for Woodlands Town.

click here for pdf version

click here for pdf version

Basically the new guides show all the trunk bus routes originating or passing through the town, together with a feeder map showing feeder services from the town interchanges and its connections with trunk services at key stops along the route. Put it simply, it’s basically a revamp of TransitLink Guide showing bus routes as colourful lines and how they connect to each other.

If you’re keen, you can get a copy from MRT stations (I picked up mine from Marsiling MRT station and Yishun MRT station). Alternatively, softcopy is available on the web (click here).

However, only SMRT bus routes are shown. This means that a number of SBS services that ply the two towns are left out. For your benefit, you may wish to note the following additions to make the map complete:

• 160: Jurong East to Woodlands/Johor Bahru
• 170: Queen St to Woodlands/Johor Bahru
• 161: Woodlands to Sengkang/Hougang
• 168: Woodlands to Tampines/Bedok
• 39: Yishun to Pasir Ris/Tampines
• 85: Yishun to Sengkang/Punggol

On another note, such maps are not new. SBS Transit had done something similar, which they call it “SBS Transit Guide”. However, the guide only mapped out the feeder network. Attached is a snapshot for your reference.


So which do you prefer? I prefer a map comprising all bus services, regardless of which company the bus services belong to. Maybe TransitLink should step in and make the operators work hand-in-hand to provide integrated information leaflets for public.

[Post note: Four more town guides are available online for Choa Chu Kang Town, Bukit Batok Town, Bukit Panjang Town and Sembawang Town. Updated SBS Transit Guide (as at Feb 07) is also available at bus interchanges and MRT stations.]

Three months of cheaper bus and train fares

If there is any transport fare increase this year, take heart that the increase amount will be capped at 1.8%, lower than the 2% increase for GST. The cap is calculated for using a formula that accounts for inflation, wage increase and productivity of operators.

In addition, you may wish to thank PTC for deferring the fare adjustment exercise by three months. Traditionally, any fare increases is effected in July. However, PTC deferred the process by three months last year as it was an exceptional year, and has since decided to reward the passengers with three months freeze on current fare.

It will be even better if they do not approve the fare application by the two operators.

1.8% cap on any bus, train fare hike this year
Christopher Tan, Senior Correspondent

ANY decision this year on raising bus and train fares will be known only in August at the earliest, instead of the usual May announcement in previous years.

And if the Public Transport Council (PTC) approves an increase, fares will go up by 1.8 per cent at the most, a spokesman for the council told The Straits Times.

For most commuters, this could mean an increase similar to last year's one- to three-cent hike, when the cap on fare increase was set at 1.7 per cent.

The new deadline and the cap on how high fares can go are the result of a change in the formula adopted by the PTC last year to work out bus and train fare increases.

Traditionally, SBS Transit and SMRT submit their applications by May 1, and revisions take effect in July.

But last year, because the PTC was busy adapting to new regulatory powers, the fare adjustment exercise was delayed by three months.

It has decided to stick with the new deadline.

'Operators will have till August to apply. Henceforth, all adjustments will be from October,' the PTC spokesman added.

As for the 1.8 per cent cap this year, it is based on a formula that takes into account current economic conditions, average wage increases as well as productivity gains of the public transport companies. It also allows fares to be lowered when the economy is in deep recession.

Both operators declined to say if they will ask for a fare increase, but it remains to be seen whether the planned two-percentage-point rise in goods and services tax (GST) in July will influence the decision.

A two-point rise in GST to 7 per cent translates to about $22 million in additional cost to the two operators.

Singapore introduced GST in 1994, starting with a 3 per cent levy. It was raised to 4 per cent in 2003, and 5 per cent in 2004.

Although GST was never passed on directly to public transport commuters, it is computed indirectly in the fare adjustment formula, which takes inflation - represented by the Consumer Price Index - into consideration.

SMRT spokesman Goh Chee Kong said: 'The fare adjustment formula takes care of wage increases, Consumer Price Index and productivity. So any increase in GST will be accounted for in the Consumer Price Index.''

In the past two years, the operators cited higher oil prices as the main justification for a fare rise.

A senior transport analyst said GST had never been fully passed on to commuters, but added that 'the formula will prevail because we are not in a deflationary economy'.

Source: The Straits Times, 23 March 2007