Yeo Cheow Tong
Singapore
“Mdm Ho Geok Choo asked the Minister for Health in light of the recent report on fungal corneal infections (a) whether those who contracted the contact lens related fungal corneal infections will suffer permanent damage to their eyes; and (b) how long will his Ministry take to conclude its investigations into the causes of these contact le…”
“My Ministry performs a regulatory role and what we do is that we try to ensure that we have a conducive regulatory environment for the growth of this industry in Singapore. Let me tell him what we are doing in some areas.”
“Sir, on her two questions, whether we are satisfied that the school buses are collecting fares during the school holidays, as I mentioned just now, the school bus service is a contractual service between the parents and the service provider. It is therefore up to them to work out the terms and to abide by the terms.”
“Sir, on the first question, whether there is any abuse by owners of buses while using the 50% rebate, the answer is no, because LTA monitors very closely.”
“Sir, I have to repeat my answer. We are not responsible for regulating school buses and therefore will not be involved. SCHOOL BUSES (Installation of seat belts) 5. Assoc. Prof.”
“Ong Soh Khim asked the Minister for Community Development, Youth and Sports (a) if his Ministry will increase the cap of $10,000 per disabled person over their lifetime for the Assistive Technology Fund scheme; and (b) if not, whether there will be a flexibility to adjust the funding cap for this scheme based on the applicant's need, as j…”
The complete record
Every one of 1,964 lines we hold for Yeo Cheow Tong, in date order, each linked to its source. Free to read, in full, without an account. Page 7 of 40.
“Mdm Deputy Speaker, I would like to thank the four MPs who have spoken, and Mr Yeo Guat Kwang, the 5th MP, who pointed out that Comfort is no longer a NTUC cooperative. I will address the points brought up by the Members in turn. Some of them may overlap, because they all touch on pretty much the same theme. Mr Chay started by talking about the problems faced by the taxi industry, particularly the dissatisfaction with the taxi industry in terms of supply versus demand - that during peak periods, commuters have to wait for a long time. And he felt that the price solution is really the best mechanism, that when there is a scarce resource and there is a mismatch between supply and demand, the price mechanism needs to come in to make sure that there is a better balance. I totally agree with Mr Chay that this indeed is the case, especially when the demand is not constant throughout the day. The commuters complain about the long queues for taxis at peak periods during rainy weather and that, even when there is fine weather, during the peak periods, there is never enough. But it is not because taxi drivers are not working. It is because demand far outstrips supply. So, the question is: Is the supply of taxis in Singapore inadequate?”
“Madam, I beg to move. Question proposed. EXEMPTED BUSINESS (Motion) Resolved, That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Mah Bow Tan]. ROAD TRAFFIC (AMENDMENT NO. 2) BILL Debate resumed.”
“I can understand their preference to park their vehicles nearby, so that they can walk in the morning to where their vehicles are parked. Unfortunately, HDB and URA have stopped providing new heavy vehicle parking places within HDB estates. This is because of noise pollution and safety concerns. URA is also not able to allocate new heavy vehicle parks next to HDB estates because in most areas, the currently available large plots of vacant land are usually land that has been reserved for development in the near future. As such, these drivers should, like the other drivers who are parking their vehicles in designated parking places, make the necessary transport arrangements to get to and from their vehicles parked in the designated parking places. The amendment will enable enforcement actions to be taken against indiscriminate parking of heavy vehicles. But before LTA proceeds to take enforcement actions, it will provide a grace period for owners and drivers to be informed about this new regulation. As there are still some vacant parking lots available near HDB estates, LTA will work with URA and HDB to make known to heavy vehicle owners and drivers where these additional parking spaces are still available. In the meantime, I would urge heavy vehicle owners and drivers who are parking indiscriminately at night to make appropriate transport arrangements to travel between their home and the designated parking places of their heavy vehicles. The remaining amendments proposed under the Bill concern the refinement of existing procedures and definitions. Madam, in summary, this Bill contains several amendments aimed largely at supporting new regulatory frameworks, as well as formalising and improving procedures for better administration and more effective enforcement.”
“The bus operators have put up advisory signs and fencing to deter pedestrians from jaywalking within the bus park areas. However, they have been unable to act against persons who ignore the signs. Allowing the bus operators to take enforcement action against jaywalking therefore serves to ensure the safety of the public. Under section 129 of the RTA, false or misleading statements or declarations made in relation to the registration of a vehicle are punishable. However, this provision does not cover similar offences in relation to vehicle type-approval and de-registration applications. Clause 13 extends the scope of section 129 to allow for enforcement action to be taken against vehicle type-approval and de-registration applications. Clause 6 empowers the Minister to make rules to regulate the keeping and the use of heavy vehicles. Currently, owners of heavy vehicles have to demonstrate that they have approved parking places before they are allowed to renew their road tax. They do this by furnishing their Vehicle Parking Certificates (VPCs). The VPCs are issued by the operator of the heavy vehicle park at which they have their designated parking places. There are 39,200 heavy vehicle parking lots island-wide compared to the population of 27,000 registered heavy vehicles. As such, there are more than enough heavy vehicle parking places, an excess of 12,000 additional parking places than there are vehicles. However, despite having their designated parking places, some heavy vehicle drivers still park their vehicles overnight illegally or indiscriminately along public roads and within private housing estates. Usually, this involves drivers or individual owners who were unable to obtain designated parking places near to their homes.”
“In severe and recalcitrant cases, their licences may also be suspended or terminated. Through the licensing framework, LTA will also be empowered to specify codes of practice and issue directives in several areas, including the preservation and promotion of fair competition in the industry. Together with the introduction of a licensing framework for taxi companies, LTA will be revising the disciplinary framework for errant taxi drivers. Today, LTA handles all disciplinary cases for taxi drivers according to internal procedures and guidelines. LTA will be revising the framework to make it more transparent and to enable the taxi companies to play a role in disciplining their errant taxi drivers. The revised framework will be similar to Traffic Police's Driver Improvement Points System. The details of the offences and the disciplinary framework will be made known to taxi drivers and the public in due course. The revised taxi driver vocational licence demerit points system will complement the licensing framework for taxi companies. Together, they will bring about better taxi services for commuters, and pave the way for a liberalised, competitive and more responsive taxi industry in Singapore. LTA will shortly release details of the licensing framework for the taxi companies and the taxi driver vocational licence demerit points system. The Bill will also enable enforcement actions to be taken in several areas: Clause 12 of the Bill enables the Registrar to empower employees of bus operators to take action against anyone caught jaywalking at a bus interchange or terminus. In recent years, there have been a number of serious accidents where pedestrians were hit by reversing buses while taking short cuts across bus parking bays at interchanges.”
“The new licensing framework will also pave the way for the further deregulation of the taxi industry. Once we have put in place the rules on how taxi companies can be set up and how they are to be accountable for their service standards, we will lift controls on the number of taxi companies, and the fleet quota imposed on each company. Such a move will allow the market to respond freely to demand, thereby providing a better match between supply and demand. This will complete our move to liberalise the taxi industry, which started with the de-regulation of taxi fares in 1998. Under the new framework, any person who wishes to run a taxi business must apply for a taxi operator licence. Applicants will be assessed based on a comprehensive set of criteria. This would include their financial resources and plans for providing a satisfactory service. Applicants will be required to operate a minimum fleet size of 400 taxis, and will be given four years to achieve this. This will ensure that the new operators will have sufficient economies of scale to provide a good service, for example, by being able to invest in GPS-based taxi booking services. As part of the licensing framework, LTA will impose licensing conditions aimed at improving overall service levels in the taxi industry. These conditions include minimum Quality of Service standards and compliance with audit directions. The taxi companies will also be required to pay a licence fee, which will be based largely on the principle of cost recovery. LTA will formulate benchmark performance standards and track the taxi companies' actual performance. Companies which fail to meet these benchmarks will be subjected to financial penalties, which are capped at $100,000 per contravention.”
“Clause 3 enhances the penalty for such offences by replacing the current fine, which is based on a minimum of 24 months of road tax, with a more definitive penalty which carries a maximum fine of $20,000 and a provision for a jail sentence. This new penalty for this offence is in line with that proposed for repeat offenders who tamper with off-peak car supplementary licences. To sum up, the amendments serve to rationalise the penalty framework for off-peak car offences and make the penalties more reflective of the severity of the offences. The next set of amendments deals with vehicle recall requirements to better protect the interest of vehicle owners. Currently, vehicle recalls by manufacturers for defects due to the design or production process of the vehicle are carried out only through the co-operation and goodwill of motor traders. Clause 5 introduces a new section 23A to make manufacturers and dealers responsible for disclosing vehicle safety-related defects to the LTA and the affected vehicle owners. To ensure the safety of the affected vehicles, manufacturers and dealers will be required to effect the necessary rectification to such defects. Manufacturers and dealers who fail to disclose safety-related defects and effect the required rectification will face heavy penalties. Let me move on now to the amendments pertaining to the taxi industry. A major source of dissatisfaction with the taxi industry today is the mismatch between supply and demand during peak periods, and poor service standards. To address these concerns, clause 11 of the Bill introduces an entire new part to set up a framework for licensing of taxi companies, with a view to raising taxi service standards.”
“However, to emphasise that it is a serious offence to tamper with a supplementary licence, the maximum fine will be raised from $5,000 to $10,000. Repeat offenders who tamper with off-peak car supplementary licences will face stiffer penalties. They will now be fined up to a maximum of $20,000 or face imprisonment for a term of not more than 12 months or both. This represents a substantial increase in the maximum fine from $5,000 to $20,000. My Ministry has also taken the opportunity to rationalise the penalty framework for some of the other off-peak car related offences. Currently, offenders who drive off-peak cars without valid supplementary licences are liable to a fine, which is subject to a minimum pegged to the road tax of a normal car in the same category. This means that the minimum fine quantum varies according to the engine capacity of the car, even though the savings derived from the offence are the same, regardless of the engine capacity or road tax of the car. Hence, clause 3 amends section 11A of the Act to de-link the penalty framework for the offence of driving an off-peak car without a supplementary licence from the value of the road tax. It also aligns the penalty framework for this offence with other off-peak car offences, by setting a maximum rather than a minimum fine. Under the new provision, first-time offenders will face fines not exceeding $5,000 while repeat offenders will be subject to fines not exceeding $10,000. Section 11A(4) deals with offenders who falsify the number plates of off-peak cars, so that their vehicles can pass off as normal vehicles. The Government takes a very serious view of these offences.”
“Mdm Deputy Speaker, I beg to move "That the Bill be now read a Second time." The Bill seeks to amend the Road Traffic Act (RTA) for the following broad purposes: First, to revise the penalty framework for weekend and off-peak car offenders. I will refer to them from now on as off-peak car offenders; Second, to require the disclosure of vehicle recalls and rectification of safety-related vehicle defects; Third, to provide a legislative framework for the licensing of taxi companies; Fourth, to enable enforcement action to be taken in respect of jaywalking at bus interchanges, false and misleading statements made in relation to vehicle type-approval and de-registration processes, and indiscriminate parking of heavy vehicles; and Lastly, to formalise existing procedures and to revise outdated definitions and procedures. Let me now highlight the key provisions in the Bill for the proposed amendments. First, the penalty framework for off-peak car offenders. My Ministry has reviewed the penalties for off-peak car offenders who tamper with their supplementary licences. Typically, such offenders are caught with supplementary licences that have torn tabs that are pasted back. Presumably, the offender had pasted the tabs back in order to re-use the licence. Currently, offenders who are convicted of tampering with their supplementary licences are given jail sentences, even though the Road Traffic Act does not require a mandatory jail sentence. As a result, the careers of the offenders are likely to be ruined. The jail sentence is unduly harsh for those who are convicted for the first time. To reduce the severity of the penalty for first-time offenders, clause 13 amends section 129 of the RTA to remove the custodial sentence provision for first-time offenders.”
“As I said just now, the PTC would take into consideration all the different justifications given by the operator. However, when I said that the NEL line is more expensive, what I meant was that the NEL line is totally underground and, being totally underground, the stations are going to be more expensive to operate because of the aircondition system, etc. There will be some savings on the drivers but the system will also be a lot more complicated because, being driverless, the control systems, and everything else, will be more complicated and the maintenance cost, in effect, will counter the savings for the drivers.”
“Sir, the fare structure for NEL has not been finalised yet. The operator will need to submit their fare proposals to the PTC for approval, and the fares will eventually be decided upon by the PTC after taking into consideration the justifications from the operator and the impact on the commuters. Mr Chiam may wish to note that the NEL line, being fully underground, is a more expensive line to operate compared to the other MRT lines. So, the fare structure is not likely to be identical to the current MRT system. I am sure the PTC, in approving the fare structure, will take this into consideration.”
“Sir, the Land Transport Authority (LTA) handed over the North East Line (NEL) system to the operator, SBS Transit (SBST), on 16th December last year. Since then, SBST has been carrying out trial runs of the system to prepare for passenger service. LTA is working very closely with the operator to fine-tune the system to improve its performance and reliability. Based on the current progress, we expect that the operator will be ready to operate NEL for passenger service in April this year.”
“Ms Braema Mathiaparanam asked the Minister for Manpower (a) what is the number of distress calls received in a year by operators manning its toll-free telephone line to assist domestic workers; (b) what training is given to these operators; (c) whether these operators can speak different languages; (d) what are the follow-up support services given to the domestic workers; and (e) how many domestic workers have been helped through this service in a year.”
“I agree with Mdm Phua that there should be traffic signs to remind motorists to slow down when driving within a school zone. Indeed, as a rule, LTA will put up prominent "School Zone" and/or "Slow Down" traffic signs on all roads in the vicinity of schools. These signs warn motorists that they are entering a school zone and should slow down and be alert, especially during the school peak hours. The unfortunate accident referred to by Mdm Phua took place at around 1 pm, along Tanjong Katong Road, just outside the former Ngee Ann Primary School, next to Geylang Methodist Primary School. Along that stretch of the road, there are several "School Zone" and "Slow Down" signs. Tanjong Katong Road has a speed limit of 50 km/h. But where it enters the school zone, motorists are expected to slow down to below 50 km/h and be ready to make sudden stops, if necessary. That is the purpose of the school zone sign. School zone signs are preferred because they carry a fuller meaning than what a 40 or 50 km/h speed limit sign can convey. The unfortunate accident at Tanjong Katong Road and a recent one at Ang Mo Kio Ave 6/Ave 9 junction are sober reminders to all motorists to be mindful at all times, especially when they approach a school zone or a traffic junction. Road accidents can be prevented, but that requires all motorists and road-users to play their part. WRITTEN ANSWERS TO QUESTIONS FOREIGN DOMESTIC WORKER HOTLINE 1.”
“In Singapore, taxis are privately operated. There are 4 taxi companies. The safety of taxi drivers is a key concern of the taxi companies. They have been working closely with the Police on crime prevention on board taxis. Among other measures, the companies have installed security systems in taxis. One such system has distress alarms in the taxis. The alarms are linked to a vehicle location system that uses the satellite Global Positioning System (GPS) technology to track down the location of any taxi in distress. Once an alarm is triggered, the Police will be notified immediately. The taxi companies will continue to work with the Police and their drivers to prevent crimes in taxis. Hardware installations are only part of the answer. Very often, simple preventive measures like educating the taxi drivers on some dos and don'ts are more effective. The taxi companies and the Police have jointly published a handbook providing tips on prevention of crimes against taxi drivers. The taxi companies and their drivers have the greatest interest in this issue and are competent in responding to it. There is no need for the Government to intervene. SPEED LIMIT SIGNS NEAR SCHOOLS 21. Mdm Cynthia Phua asked the Minister for Transport in view of the recent accident at Tanjong Katong Road, if he will consider displaying speed limit signs, for example, 40 km/h, on roads near schools instead of the current practice of displaying the 'school zone' signs so as to remind vehicles to slow down.”
“Sir, as the CAAS has replied in the newspapers a few days ago, we would welcome the setting up of an additional airline in Singapore, whether it is a low-cost carrier or otherwise. BUKIT PANJANG LIGHT RAIL TRANSIT (Service disruption) 8. Mr Gan Kim Yong asked the Minister for Transport (a) whether he will give an update on the status of the service level of the Bukit Panjang Light Rail Transit; (b) what were the causes of the major service disruption on 21st October 2002; and (c) what measures are being undertaken to prevent recurrence of the same problem. 9. Dr Teo Ho Pin asked the Minister for Transport (a) whether he will consider shutting down the Bukit Panjang LRT system for a period of time so as to conduct a thorough investigation and testing of the system; and (b) what are the key safety features of and the performance standards specified for the LRT system.”
“I am therefore happy to inform Members of the setting up of a 3-year, S$210 million Air Hub Development Fund (AHDF) as part of our competitive strategy. A number of initiatives will be launched under the AHDF. These will be targeted at our industry partners, and help us further anchor Changi's position as the premier regional air hub. For example, CAAS will, under the AHDF, step up collaboration with airlines and various Government agencies, like the Singapore Tourism Board, on traffic development programmes. Fundamentally, the most critical element for an airline is the demand for air travel. If we can stimulate greater demand for air travel to, through and from Singapore, the business of the airlines will improve, margins will increase, and they will not only stay, but increase their presence here. We will also enhance our existing cost reduction measures under the AHDF. The House may recall that as part of the Government's Off-Budget measures in October 2001, we had introduced a 10% landing fee discount and a 15% rental discount. With effect from 1st January 2003, we will increase the landing fee discount from the current 10% to 15%. This will generate savings for the airlines of about S$30 million annually for the next three years. In addition, the current 15% rental discount will also be extended for another three years. This will benefit not only our tenants at the passenger terminals but also our tenants at the Changi Airfreight Centre. Sir, CAAS will announce more details of the AHDF, and all these measures will help Changi remain competitive as a key aviation hub.”
“Sir, China's civil aviation market is expected to grow by about 8% per annum with its air cargo traffic growing at an even faster 12% per annum for the next 20 years. China is likely to become the largest commercial aviation market outside the USA. Given this immense potential, it is likely that there will be several aviation hubs in China, including Pudong in Shanghai. We see this development in positive light. As the established hub for Southeast Asia and the Australasia region, Changi Airport will benefit from the growth of the North Asian hubs, because the airports serve complementary roles. For instance, air traffic between Changi and Pudong is expected to increase three-fold by end of this year compared to just a year ago, from 14 to 44 weekly services. As Shanghai and Pudong continue to develop rapidly, we expect the traffic between Changi and Pudong to grow in tandem. The development of the Chinese hubs will also bring about further downstream economic opportunities for Singapore, eg, in the maintenance, repairs and overhaul sector. Sir, let me now move on to how Changi Airport intends to stay ahead of its competitors. Globally, the aviation industry has yet to fully recover from the economic downturn exacerbated by the September 11 events. Regionally, competition has become more intense, with many airports offering new facilities and larger capacities. Against this backdrop of continued uncertainty in the global aviation industry and intensifying airport competition, my Ministry has embarked on a fundamental review of Changi Airport's competitive strategy. What we aim to do is to not just help our airline partners tide through this difficult period but, more importantly, position Singapore for the long haul.”
“Nevertheless, we have also asked the operators to consider allowing the Standard Tickets to be used for multiple trips on the rapid transit system (RTS) so as to reduce the inconvenience to the small group of commuters who want to continue using the Standard Tickets. As for each ST card that is not returned, SMRT loses about $4. The deposits which are not claimed will help to cover these losses. Table 1 - Priority of claim”
“There are two main types of transit fare cards: magnetic cards and ez-link contactless smartcards. LTA has opted for the ez-link system as contactless smartcards, unlike the existing magnetic cards, have the capacity to accommodate the fare information of an expanding Rapid Transit System. Hence, they can allow commuters to continue enjoying through-ticketing for a seamless journey even as they transfer from line to line. North-East Line and all future lines will operate solely on the ez-link system. They will not be able to accept magnetic cards, hence the need to replace magnetic cards, including the single-trip magnetic fare cards. The latter will be replaced by the new Standard Tickets (STs) that ride on the ez-link system. Currently, 7% or about 75,000 train passengers use single-trip magnetic cards. While it is technically feasible to retain a separate ticketing system for such single-trip use, it means a higher cost of operation, which will have to be borne by the rest of the commuters. This does not seem fair. A contactless smartcard is more expensive to produce but it can be re-used. The new Standard Ticket costs about $5 to make. To encourage commuters to return them for re-use, a $1 refundable deposit is imposed on each card. While this has imposed some inconvenience, it is not that cumbersome once commuters become familiar with the refund procedure. In any case, our advice is for commuters to use the stored-value ez-link cards instead of the single-trip Standard Tickets. They can then enjoy lower fares and transfer rebates, and avoid the need to reclaim the deposit.”
“A transfer fee is levied when a vehicle is transferred from one owner to another. It comprises two components - a small administrative fee and a tax. The administrative fee is $3 for motorcycles and $10 for all other vehicles. The tax, which is also referred to as an Additional Transfer Fee, is set at 2% of the assessed value of the vehicle and is part of our national taxation framework. It goes into the Government's Consolidated Fund, which funds the various Government programmes for the benefit of all Singaporeans. TRAINING ON SAFETY FOR CONSTRUCTION WORKERS 29. Mr Chiam See Tong asked the Minister for Manpower whether he will make it compulsory for workers at construction sites to undergo more intensive training in safety before they are allowed to work at such sites in view of the rising number of fatal accidents involving construction workers.”
“Sir, we want the operators to make money so that they can provide a good service. I understand that PTC will ensure that the operating terms and conditions are similar to that being imposed on the current transport service providers. ORDER OF BUSINESS (Motion) Resolved, That, under Standing Order 10(2), a Personal Explanation be made by Mr Tan Soo Khoon now. - [Mr Wong Kan Seng]. PERSONAL EXPLANATION 2.00 pm”
“I understand that the PTC is looking at a five-year period at the present moment. Assoc. Prof. Low Seow Chay (Chua Chu Kang): I would like to ask the Minister whether he would set unfavourable conditions for a private operator to operate to make sure that he would not make money.”
“Sir, the present bus operators are required to comply with the universal service obligation, ie, they are obliged to provide the service for the whole day, from 6 am to 12 midnight. They are obliged to provide the service to all geographical areas covered by the service agreement. And, therefore, we will not allow other operators to cherry-pick, ie, to serve only the areas that are profitable or to serve only during the peak periods when the passengers are plentiful.”
“Sir, the PTC is still looking into the operating framework and once they are ready, MPs will be told accordingly.”
“Sir, as I mentioned in Parliament previously, my Ministry is open to the idea of allowing more competition in feeder services in HDB towns. I have also proposed that this be tried out on a pilot basis. PTC will be formulating the terms and conditions for such services. In principle, any operator wishing to provide feeder services must be prepared to compete on an equal footing with the existing operators. To ensure that all residents are well served, the operator would need to meet certain service standards, including providing comprehensive coverage and running a full-day service, in the same way as the incumbents are required to do. He will have to provide scheduled services on fixed routes and at an acceptable frequency. It will be up to the operator to decide what capacity of buses he wishes to use, provided that they comply with environmental, safety and quality standards specified by the PTC and LTA.”
“Sir, I do not foresee any increase in statutory costs this year.”
“Sir, we have a good regulatory and physical public transport system in place. It may not be the best, as some Members have pointed out, and therefore there is always room for improvement. This we shall do. But we must proceed carefully, as our public transport system would not have developed so well, in terms of both quality and pricing, if the fundamentals were wrong. Sir, Dr Tan Boon Wan's amendment will reassure the public about the role of the PTC, while preserving the Council's independence. I am happy to support his amendment.”
“The accusations are very wide ranging - from the Government not listening to the people, an uncaring PTC, an uncaring Government, as well as profiteering by the bus companies. Sir, I can assure Singaporeans that the Government does listen carefully. The Government also has a big caring heart about the welfare of Singaporeans. That is why when the Asian economic crisis hit in 1997, the Government quickly moved to put together a package of measures to help relieve the pain. It also put in place a wide-ranging package of measures to help upgrade the skills of workers and help them remain relevant and employable in the years ahead. Similarly, when it comes to public transport, the Government has also devoted a lot of resources and energy to make sure that we have an excellent land and public transport system. Those who have travelled abroad will know that our public transport is one that is hard to find elsewhere, in terms of quality and price. We have heard the unhappiness, and we can certainly empathise with the sentiments. But it is important for public policy to be made on the proper basis, based on the long-term interests of the people and the nation. We must state the facts clearly and accurately. And where the perceptions are wrong, we must be prepared to explain and clarify. This debate has certainly provided plenty of opportunities for all of us to do so. This is not the first time that a fare revision has taken place, and it will definitely not be the last. The PTC and the bus companies must therefore improve the communication process so that the rationale for the fare revision is clearly understood, and the people know, in no uncertain terms, that the PTC has once again safeguarded their interests.”
“Sir, several Members have asked why do we not defer the fare revision until the ez-link system has been implemented because of the speculation that it is going to cut down on people cheating the bus companies, and therefore is going to lead to an increase in revenues. If this is true, it would impact on this year's operating cost, and that would be good news for commuters next year. So, let us implement the ez-link system and see whether there are actual savings coming from the system. If so, next year's fares may not have to increase. Sir, let me go on to some other points. Ms Braema and Mr Arthur Fong asked that we look into providing buses that are friendly to the disabled, buses that will kneel down in order for those who are in wheelchairs to board the buses. This is a concept which is applicable only if that bus service is not meant to be a high capacity service. In Singapore, we need to move the buses along as rapidly as we can. In fact, the PTC and the bus companies are always looking for ways to see how we can speed up the time taken for people to board the bus and to come down from the bus. That is why we have the ez-link card, and why we have the bigger doors in the public buses. I think this system will not be applicable for Singapore, as it stands today, because for the bus to tilt and for the bus driver to come down and all that, it will lead to tremendous delays. I think it is better for NCSS to work with MCDS to come up with an appropriate system for transporting the disabled. But, nonetheless, I will request the bus operators to continue to see whether they have another solution. Conclusion Sir, I think I have finished with the replies. Let me now conclude. We have heard from many MPs reflecting the unhappiness at the ground level.”
“So, in this way, if it goes up very quickly and it impinges on their profitability, they can tap into the Fund for some relief. This is because we do not want the bus companies to be changing their bus fares every few months, just like we do for the utilities. It will be very confusing. So, this is meant to be a stabilisation fund, and it should not be used to subsidise the fuel cost, because the fuel prices are going to remain high, I think, for quite some time to come. Ms Ng also tried to promote cycling as a cheaper alternative. Sir, I also like to cycle as a form of exercise, but only when I want to have a good sweat out. In Singapore, there are two reasons why cycling is not really feasible as a normal means of transport. First, our weather is very, very punishing. Even with the breeze blowing in your face, by the time you arrive in the office, you are already all hot and sweaty. Secondly, to promote safe cycling, we need to have cycling lanes, specifically set aside for the cyclists, which is what Ms Irene Ng had also mentioned. Sir, unfortunately, in Singapore, we are already scrambling to look for space for an additional car lane, let alone an additional cycling lane. So this is an idea that is not really feasible in the context of our local environment. But as a weekend activity, yes, and I would urge MND to provide more riding lanes, to link up the different parks so that those people who do it as a recreational activity, like me on a weekend, can cycle from one park to another. I think this is a very good idea.”
“In actual fact, the feeder services are still charging a flat rate of 63 cents today, despite the length of travel. In that sense, the feeder bus riders are being treated specially compared to those who are on the trunk services. Sir, let me now move on to Mr Yeo Guat Kwang. He urged the LTA to allow the bus operators to keep their rental income to offset the cost of maintaining the interchange, ie, to give the bus companies the same treatment as SMRT. The two sets of assets - the land and the investment - come under two different treatments. And that is why for SMRT, we are able to give the entire premises to SMRT and let them operate it as if they have leased the entire asset. Unfortunately, for the bus operators, we are not able to, but we are looking into it. Prof. Low Seow Chay said that the 3 cents increase for a rider who pays 60 cents is not a small increase, it is a 5% increase. Sir, I agree with him, but we have decided to do it as an across-the-board increase, with equal pain for everybody, ie, no matter how far you ride, the same increase applies. We could do it on a percentage basis, but I think that would be a little bit messier. In any case, for those who are taking the trunk rides for 60 cents, I would like to inform the House that the 60 cents charge for air-con services has not been changed since 1984. So, those people who have had the privilege of riding short distances have enjoyed the same fare for over 17 years. The 3 cents increase in this present fare revision is a very fair one for them. Ms Irene Ng mentioned about the Fuel Equalisation Fund. Sir, the Fuel Equalisation Fund was set up to help the operators in times of violent and short-term fluctuations of the fuel price.”
“May be one particular complainant. Sir, the fact is that the failure rate today is about 1.5%. But 1.5% is still high. I am not happy, and I have asked TransitLink and the operators to look into it as quickly as they can, and to bring the figure down rapidly. But when I look at the magnetic card when it was first introduced in 1990, I was told then that the failure rate, when it was introduced, was one in ten or 10%, even higher. In comparison, the ez-link card is not doing badly, but there is plenty of room for improvement. So we will pressure them to bring the quality of the system up. Mr Low Thia Khiang suggested that we nationalise and subsidise public transport. A lot of Members have joined in to disagree with him. I shall not belabour the point. Sir, to nationalise the two operators - SMRT and SBS - today would be sending a very, very wrong signal to investors all over the world. We will be one of the few countries in this day and age to go out to nationalise a company. And we should also not subsidise public transport operations, because public transport has a consumption factor in it. If we subsidise, we are going to distort usage, and we are going to encourage even more usage. With our roads already being clogged up, I think we should do our best to minimise usage rather than encourage usage by distorting the usage. Mdm Halimah Yacob urged that we treat feeder services differently from the trunk services because many people in the heartland use it. Sir, yes, I sympathise with them. But we have to look in terms of what are the resources needed to provide the feeder service. Is the feeder service requiring resources which are very different from the trunk services? The answer is no.”
“Sir, let me now move to some of the points raised by Members. Let me start with Mr Tan Soo Khoon. I have replied to most of his points. He has also talked about the willingness of the school bus operators to forgo a fare increase now, despite the increases in insurance premiums, and that they will only look into it in the future. I checked into the fares charged by the school buses. They range from about $30 to $120, depending on the distance travelled. These are much higher than what the public bus services charge. For example, a primary school student can enjoy unlimited rides on our public buses any time of the day for a cost of $22.50. As such, if I were a private bus operator, I would also be very worried if I have to increase my fares, especially if the fare increase is likely to be large. The speculation in the newspapers is that the fare increase is likely to be between $10 and $40. Sir, this is not a 2.3% increase. The fare increase is likely to be in the region of 30%. If I am the private bus operator, I will also shelve the 30% increase today, especially after all the complaints about the 2.3% increase. Sir, Mr Tan Soo Khoon has also given some suggestions for the public transport operators to look into. And so has Mr Zainudin. They have asked the PTOs to look for innovative ways to reward the loyalty of commuters. Sir, the PTOs are all here upstairs. I am sure they have heard and taken note of Mr Tan's and Mr Zainudin's suggestions, and I will leave it to them. Mr Chiam See Tong gave some feedback about the ez-link card. He said that the feedback given to him is that the card is giving a lot of trouble, and there is a 20% failure rate. Sir, with 20% failure rate, the transport system will break down!”
“I am finishing, Sir. Just a few more minutes. Sir, many Members have spoken about the unhappiness of the public over what they perceive as price increases for a whole slew of public services. The Government is indeed aware of the need to keep public services affordable, and not to increase prices unless absolutely necessary. Some of the items mentioned, like utility prices, are really out of our control. Oil is the main determinant of the cost of generating electricity. So, when oil prices go up, the price of power goes up. But when oil prices go down, I am sure Members have also seen that power prices do go down. Sir, Members may like to know that despite all these increases that we have talked about, MTI estimates that inflation rate this year will still be close to "0". Although the items may be many, in actual fact the impact per item is not very large. Whilst this hike may increase it a little bit, there will be other cost reductions elsewhere, and we will end up with about "0" inflation. TIME LIMIT FOR SPEECHES (Suspension of Standing Orders) 4.37 pm”
“Some asked if the Council members took public transport. Membership in the Council cannot be based on whether one uses public transport. Having said that, again, I understand that several of the members do use public transport regularly. In fact, one of them does not even own a car. Because the PTC has a heavy responsibility, we have always chosen Council members very carefully. They are usually people of high repute in the different sectors and different professions, and include senior managers, accountants, professionals, social workers and a union representative. They bring to the Council expertise needed for the deliberations to be carried out professionally and properly. These are people who have busy schedules. And I can assure you this is not a very popular job. I cannot remember who mentioned it just now. But we do have a tough time looking for the right people to serve on the Council. Yet, they have agreed to take the time and effort to serve on the Council. Sir, I have noted the suggestions of Members to review the Council's membership and to see if we can strengthen it further, eg, with additional union representatives and grassroots leaders. We will also look into whether we should continue having the transport operators as Council members. I will ask my staff to look into the various suggestions.”
“Because fare revisions are always unhappy events, Parliament set up the PTC as an independent regulator. This way, the Council is not subject to lobbying or pressure from either the public, the PTOs, or politicians. Indeed, this is what the PTC has done every year, since it was formed 15 years ago. It has taken its role very seriously. The Council subjected every request for fare revision to rigorous and thorough analysis. Mr Ravindran asked whether they have think-tanks and all that. Sir, PTC has people from industry with expertise to analyse company reports and company operations, who are able to sift through a whole ream of details to get to the real picture. And after having done all these analyses, its decisions have always been more than fair to commuters. I have mentioned all the figures just now, so I shall not repeat them. Sir, I can assure Members that the PTC's job is a very difficult one. I know, because each time I meet the Chairman, after PTC has finalised its decision, I can see the worry lines on his forehead. He and the other Council members certainly do agonise over their deliberations and final decisions. They take their responsibilities seriously, as they should. Sir, the PTC is an important institution, one that has served the people very well. We should take care not to undermine it, as this would be tantamount to also undermining the interest of the general public. That is why I support the amendment by Dr Tan Boon Wan. Having said that, I must say I also agree with the views of the Members here that PTC's communication process can be improved upon. I will certainly ask my staff to work with PTC on how to achieve this. Composition of PTC Sir, Members also spoke about the composition of the PTC.”
“Therefore, I do not think that this will end up benefiting the public. But having said that, and although our current bus industry framework has served us well, Members will remember that in the last Budget debate, I informed the House that my Ministry is open to the idea of competition. We are, for a start, prepared to allow additional players to operate feeder services in the HDB estates, and we will do that on a pilot basis. Why feeder services? It is because the area is defined. It is easier to monitor. It is easier for the users to actually compare between the two. Sir, any new operator who wants to do so will have the chance to compete on an equal footing with the incumbent, and they need not implement the new ez-link system in order to interface with the system. They can save the expenses of the ez-link system if they wish to do so. But as there is a measure of uncertainty in the outcome of the pilot, any new operator who wishes to participate in this scheme must first seek the support of the community in which it is to operate in. And I think the community must be led by the MPs. So if the MPs agree, they can talk to the operators and they can then come to the PTC and present their proposal to the PTC. And I am sure the PTC would be very happy to give due consideration. Role of PTC Sir, let me move on to the big topic of the role and the composition of the PTC. As Dr Wang Kai Yuen and Dr Amy Khor have noted, the PTC has to operate within the parameters set by the House. One of the key duties of the PTC is to review applications for fare revisions. In carrying out this role, it must safeguard the interest of commuters. But it also has to ensure the viability of the PTOs.”
“Competition Sir, let me move on to another hot topic, which is competition. Many people, both outside and inside the House, take the view that public transport costs are high today due to the lack of competition. Minister Mah had already explained yesterday why competition in the transport sector would not work, and so had Senior Minister of State Khaw Boon Wan who also compared the bus industry to the telecoms industry. Sir, we need not go any further than to look at SBS and TIBS. Yes, they are not directly competing with one another, but they are running a similar system with similar cost structure. SBS enjoys greater economies of scale. SBS fleet is about 2,800. I think the TIBS fleet is about 800. So, SBS is about slightly over three times the size of TIBS. And because SBS enjoys economies of scale, they have lower operating costs. As a result, SBS made after tax profits of $39 million in 2001, compared to TIBS' profits of $2.7 million the same year. Therefore if we introduce full competition, yes, it may look exciting, but what would be the actual impact? You are going to get fragmentation, you are going to have small companies - companies that may be even smaller than TIBS. Are they going to have lower cost than SBS, especially with SBS' sunk cost? A lot of the assets they occupy are assets which they bought many years ago when prices were much lower. I think not. I think those small operators are going to end up with operating costs even higher than TIBS. And if we have competition, we must not regulate the way we are doing today. We must regulate with a very light touch and allow flexibility in pricing. If we do that, I think the smaller operators must eventually end up charging more because their costs are higher.”
“ERP Exemption for Buses Sir, let me move on to some of the other points brought up by Members. ERP exemption for buses. Some Members have asked that we exempt the buses from the ERP system to encourage more people to switch from private to public transport. The objective of the ERP system is to manage congestion through road pricing. Buses, like other vehicles, also contribute to our congestion. They therefore must be subject to the ERP charges. Otherwise, to exempt them will only help to distort the usage pattern. Let me give Members an example. When going to Orchard Road, one can either use the train or he can take a bus. The train does not cause any traffic jam. It just goes underground. But buses do. We should encourage more people to ride trains instead of buses, and encourage the operators to run more trains rather than more buses. Sir, the ERP which buses pay, and which trains do not, is the way to do that - through the price signal that it sends. In any case, the ERP charge per passenger is very small, compared to the ERP charge per car passenger. So, imposing the ERP on the public buses, I think, will not discourage people from switching from their own cars to public transport. Sir, Dr Tan Cheng Bock had also mentioned that the ERP charges would not result in higher cost. He had asked me whether it is true. Sir, he is correct. It is true. As I mentioned just now, we have reduced the road tax significantly to more than cover the cost of the ERP charges. The bus operators would only incur about $4 million a year in ERP charges. We had reduced the road taxes by $13 million a year. So it more than covers the ERP, and the bus companies have no grounds at all to complain about having to pay for the ERP.”
“So, let us have a better balance between wanting more, wanting better services, and being prepared to pay. Conclusion on Fare Increases Sir, let me now sum up on why it was necessary to increase the transport fares. First, costs have gone up by 15% over the last two years, and because of the recession last year, PTC rejected the request of the PTOs for a general fare increase, and only increased fares to allow a 1% increase in revenue. This year, PTC again moderated the increase to 2.3%. And while the PTOs are still profitable, the rate of return is only moderate, to very low. But the indicators are that this increase of 2.3% will only allow them to partially cover the expected cost increases this year. It is therefore unlikely that the bus companies would be able to achieve the spectacular results of the last three years. Sir, as such, the PTC has decided to increase the fares by 3 to 5 cents per ride for those who are using ez-link card or the magnetic card, and 10 cents for cash. The PTC has made the decision. The Ministry agrees with the PTC because we also feel that, whilst the timing may not be the best, the increase is certainly not excessive. Sir, PTC has also adopted the principle of granting small fare increases rather than having a big and very painful increase once every few years. All price increases inflict some pain. We all know that. The PTC's approach is a less painful one. I would therefore urge Members to support the PTC's principle of small fare increases on a regular basis and avoid having to impose a larger one later on. The PTC has taken its decision after taking in all the relevant factors. The Government accepts the PTC's decision, and I hope Members will also give their support.”
“MTR. And he said that our PTOs should therefore not hide behind the skirts of the PTC, and only know how to increase fares. Sir, if only SBS and TIBS were able to charge the same high fares as Hong Kong, I am sure that when they heard that yesterday, they must have been groaning away about how lucky they are in Hong Kong. I am sure that if they can charge the same fares as in Hong Kong, they will also have plenty of scope to offer special discounts too. If I am charging 50% more, I will be very happy to offer a 20% discount, and end up looking good all the way to the bank. Sir, Mr Tan also mentioned that in Hong Kong, the bus operators give value for money. If charging up to double what the Singapore bus companies are charging is giving value for money, then I think Singaporeans are going to be in trouble. The fact is that Singaporeans are already getting the best value for money from our bus operators. First, minimal price increases over the last 15 years. I quoted 14% increase for the average bus ride. When I think of my hawker food prices, the bus companies have been even more competitive than my hawker who has charged me a lot more over the last 10 years. Sir, second, we have a quality of service that other bus companies envy. Comfortable air-conditioned buses, with few breakdowns. Yes, there are breakdowns, but I can assure you, in Singapore, the breakdowns are far and few in between. Of course, the commuters would like the bus companies to do better. And I think the bus companies should continually endeavour to do so. But there is always the cost implication. And I would urge commuters to exercise caution and prudence. The more you want, unfortunately, must end up in you paying more.”
“But some Members may ask, "How can we be sure that the fares are reasonable?" They may be affordable, but are they high compared to elsewhere? Are they reasonable? Sir, we can compare against, say, Hong Kong, which has a similar standard of living. The population is similar, except that they are double ours, and we all know in the public transport sector, economy of scale is important. Yesterday, Mr Tan Soo Khoon also brought up the example of the Kowloon Motor Bus Company (KMB). He quoted some figures and all that. Sir, let me go on to the Kowloon Motor Bus Company. KMB is bigger than SBS. KMB has a total of 3,700 buses compared to about 2,800- 2,900 in SBS. But, despite the advantages of a bigger population, a bigger bus fleet, I am glad to inform the House that our bus fares are still cheaper. Let me give Members some comparison. The fare for a 3 kilometre ride for KMB is 80 cents. This is in Singapore dollars, not Hong Kong dollars. This is almost 30% higher than our new starting fare of 63 cents. And this is the good part. For a 35 kilometre trip, which is our maximum, KMB charges S$3.05 cents per ride. Those of you who ride the bus will know that in Singapore, for that distance, our commuters only pay $1.53 cents, half the price of KMB. Sir, Mr Tan also touted the competitiveness of the PTOs in Hong Kong. He said that when the new MTR extension was opened, the MTR reduced prices to undercut the bus fares. And then KMB countered attack by also reducing prices, and offering free meals. I cannot remember. Is it KMB or is it MTR?”
“Just now, Mr Ravindran asked for actual figures on how much the fares have actually gone up by. Salaries have gone up by 136% over the last 15 years. But how much have the fares actually gone up by? Sir, I will quote him the average bus ride of 8 kilometres. In 1987, an 8-kilometre bus ride cost 90 cents. Today, that same ride, with the recent increase, would cost $1.03, an increase of 14% over the past 15 years. If we look at the train ride, the train ride has gone up a little bit further, because 1987 was the start of the MRT system. The train ride has gone up 30%, from 80 cents to $1.04 today. I think Members would agree that these figures are very reasonable and well below the salary increases enjoyed by Singaporeans. Another point which Mr Iswaran brought up is that affordability is not just about percentage increases. Affordability is how much the families are paying as part of their family expenditure. And has it gone up today, or has it gone down? Sir, I have only two sets of figures, 1998 and 1988. In 1988, public transport formed 5.1% of household expenditures. In 1998, ten years later, it has not gone up. It has gone down to 4% of household expenditures. So the impact of public transport on the family pocket has actually diminished over the last 10 years. Sir, Dr Amy Khor stated that there is now a perception that the PTC has tilted fully in favour of the transport operators. Sir, she is totally wrong, and the ground perception is also totally wrong. The data has shown otherwise. On the contrary, Members and the public should be thanking the PTC for having protected the commuters so well. And I think we also should thank the transport operators for being productive and efficient and making the low fares possible.”
“For those who are having financial difficulties, the unions have also chipped in to provide some financial assistance. At the Government and community levels, there are also multiple schemes available. Some examples are the recently introduced Economic Downturn Relief Scheme (EDRS) and some old schemes like the Rent and Utilities Assistance Scheme (RUAS) and, of course, the good old Public Assistance (PA) for those who are genuinely unable to work. At the community level, there is a network of "Many Helping Hands". Many CCCs are providing financial help through their welfare funds. I know, because I monitor what we do in our GRC and the five MPs in our GRC do give up quite a fair bit of aid through our welfare fund. Even our PCF kindergartens are chipping in to waive, either in full or partially, kindergarten fees. And starting from 1st January next year, those facing financial hardship can also tap on the Economic Restructuring Shares (ERS). I think for a family of four, it would provide quite substantial help. So, it is better that we look at ways to help those who are directly in need, and do it in a meaningful and substantial way, so that they do not have to worry about the one or two cents that they have to pay for the bus fare increases. But while we have a lot of schemes to help the unemployed, how would this affect those who are employed? Would it be a big impact on them? Sir, to do that, we have to look in terms of how the fares have gone up for the last few years. As I mentioned just now, the fares have actually lagged behind salary increases. But if we look over the past 15 years, the increase in the cost of travel has lagged even further behind the national wage growth.”
“And if the economy is weak, as the PTC has realised, to keep the fare increase to the bare minimum - again, in this case, it has done so. Sir, one of Mr Tan Soo Khoon's arguments against an increase now was that our economic recovery is still very shaky, and may not even hold. I think the economic data released by MTI this morning does give us something to cheer about -- not very much, but it is still something to cheer about. Our real GDP grew by 10.3% in the second quarter, and this compares very well against the first quarter growth of 8.4%. So 8.4% growth in the first quarter, 10.3% in the second quarter. Of course, we cannot guarantee that the rest of the year will be even better but, at least, at the present moment, the trend line is certainly looking good. And even if it holds at this level, we would have done well. Sir, some have argued that the timing is bad because of the high unemployment. I agree with that argument. Yes, many Singaporeans are unemployed and many have been retrenched, and others are fearing for their jobs today. Like all Members, I am concerned. But whilst we are concerned, we should look to see how we can actually focus our help towards those who really need help. Trying to help them with a blunt instrument, like holding the fare increase, is not going to help them very much. Let us look for real ways. This, indeed, is what the Government has been doing, together with the unions and the employers. There are many schemes available at the various levels. For example, the unions have been playing a very big part. They have been actively helping their retrenched workers to go for retraining and skills upgrading, so that they can get a new job. Hopefully with higher level skills, they can even get better paying jobs.”
“5% is, in fact, a very conservative estimate of the impact of labour cost increases, taking into consideration productivity improvements. Sir, another point is whether the operators should even be profit-driven, ie, make profits but do not be profit-driven. Sir, as SMS Khaw Boon Wan had pointed out yesterday, it is good that the operators are profit-driven. This motivates them to innovate and to look for ways to improve productivity and, hopefully, that would flow down to the profits. Otherwise, if they are paid on a cost-recovery basis, there is really no need for them to crack their heads and do better. But while their job is to be profit-driven, the key that Members must remember is that we still have the PTC guarding the goalpost on behalf of the commuters. Timing of Fare Increase Sir, let me move on to the issue of timing. Questions have been asked why now, why not later? After all, we are just recovering from the recession. Members have admitted that there is never really a good time for a fare increase, let alone finding the best time. Even when the economic growth is strong, fare increases invariably attract tremendous amount of criticisms. We have established the PTC, and we have given it the responsibility to safeguard the interests of the commuters. In this, it has done very well. As I mentioned, it also has to be fair to the transport operators. We cannot have a situation of "heads I win, tails you lose". The key is to ensure that the PTC is able to study what has led to the cost increases faced by the operators, and whether these are valid factors. Have they made good efforts to improve productivity? And after satisfying itself that an increase is warranted, to proceed to allow an appropriate fare revision.”
“When times are good, they can up their product price by 10%, 15% or 20%, whatever the market can bear. I am sure that if the PTOs have this freedom, fares today would be much higher, at least 50%, if not double. But because we regulate them from having excessive profits, the regulator also has the obligation to look after their commercial viability. Otherwise, who would want to invest in such a sector, or even lend money to them? Parliament recognised this in 1987, and that is why we charged the PTC with the responsibility to also ensure the viability of the operators. Sir, there seems to be some misunderstanding about the CPI + X formula which is used to regulate the operators. Some Members seem to be under the impression that because we have the formula, the fares are automatically given. The fare increases are not automatically given, and the PTC has been very careful about that. This is the formula that PTC uses to determine what is the maximum that they can approve for the fare revision, should the PTC decide that a fare revision is warranted. Some Members have asked what is "X". It seems to be a magic figure. Why is it 1.5%? Sir, "X" takes into consideration the manpower cost increases and productivity improvements. In deriving the wage increases, PTC took a look at the historical levels and tried to project forward in terms of what is the expectation for the future. PTC also took into consideration the point that the bus companies must achieve productivity improvements. So PTC discounted the amount of the salary increase factor that should be provided in the "X". That is how it arrived at a level of 1.5%. If you look at it, other than the last two years where, because of the recession, the wage increases have gone down, I think 1.”
“This means that this year, which is the full first year of impact, cost must go up quite significantly. As I mentioned just now, the impact of the lifespan extension is $10 million a year. Sir, the more fundamental question would be whether the transport operators, who are providing a public service, should even be making money. Sir, it is wrong to think that just because they are providing a public service, they should not be profit-oriented, because profit-oriented is not profiteering-oriented. We must remember that any operating entity, whether it is for profit or not-for-profit, must earn a reasonable return if it is to provide a satisfactory service to its customers. This is even more so for the transport industry, which is a very asset and capital-intensive industry. It needs to have enough revenues to cover operating costs, and to generate enough reserves to renew its operating assets. Luckily, the present PTOs are profit-making, so they have reserves. If they are not-for-profit operations today, the full impact of their cost increases over the last two years would have to be passed through in full to our commuters. Sir, some Members questioned why the PTC has to ensure the financial viability of the PTOs. After all, other companies are not guaranteed of viability. As Dr Wang Kai Yuen has rightly pointed out, this is because the public transport sector is a regulated sector, and we have to regulate it because there are only two operators. We, therefore, have to regulate them to prevent them from making excessive profits. Sir, these two are definitely not normal companies, in the sense of what Mr Inderjit Singh had talked about yesterday. Normal companies are able to set their own rates based on what the market can bear.”
“In terms of savings on depreciation, and the interest earned on the money which they did not have to spend, it comes up to $10 million or thereabouts a year. And because this is additive, ie, every year another batch is saved, and they have the additional benefit from that batch saved. The savings alone for the third year, ie, in 2001, is about $25 million. So, just for the year 2001, they could save $25 million just on this measure. Sir, these two policy changes have helped enhance the profitability of the bus companies, not because of fare increases or productivity improvements. These two measures alone would have saved them a lot of money. In fact, one only has to look at their financial performance in 1997 to get a sense of how well the bus companies were doing without this assistance. In 1997, SBS only earned $21 million and had a ROTA of only 4.4%. Without the Government coming in, they were earning only 4.4% ROTA in 1997. TIBS made only $1.7 million, and had a ROTA of 2.3%. And that was after they had a big fare increase of 8.5% that year. If we look at those figures, I do not think, fundamentally, that the companies are really doing that well. Sir, what is more important for the public is that because of these two Government measures, we had helped to prevent a price hike in 1998. And in 1999, the bus companies were even able to pass to commuters the savings from the 10% CPF cut, which they did through a 5% fare rebate. Mr Tan Soo Khoon and Dr Tan Cheng Bock had asked about this. Yes, they did do their part. Sir, however, the impact of the lifespan extension began to diminish from mid-2001. That means, from then on, they would have to start replacing their buses, because the extended buses would have reached 15 years of age already.”