Yes, change must be the new constant for our system of buses and trains; however, nationalisation does not appear to be a constructive solution to our plethora of woes.
The following segments will explore a few key areas: one, why better regulation, and not nationalisation, should be the way forward; two, failure of the Land Transport Authority (LTA) and the Public Transport Council (PTC); and three, tangible, sustainable recommendations for our public transportation system.
Why Nationalisation Is Not The Panacea
The Workers’ Party has been the biggest proponent of nationalisation  for Singapore’s public transportation system, but there is a host of potential pitfalls to the plan.
1. The possibility of X-inefficiency , with efficiency objectives not taken seriously; furthermore, the presence of possible safety nets – in the form of subsidies or bail-outs – might encourage greater inefficiency.
2. Principal-agent problem, in which the operators on-the-ground are more cognisant and competent than the administrators.
3. There is the challenge of raising capital for long-term investments (since private investments are not feasible, and if industrial relations are poor), and the need to compete with other government agencies or department for budgeted funding
4. Conflicting bureaucratic opinions might render decision-making cumbersome.
Firms, like individuals, respond to incentives. The notion of the profit incentive would encourage public transport operators (PTOs) to render their operations more cost-effective, delve into research and development to produce productivity gains, as well as to improve service efficiencies. Within the privatised industry, SBS Transit and SMRT Corporation are essentially individual natural monopolies , because their routes and responsibilities do not overlap.
Profit-orientation? Healthy finances build up administrative stability, generate additional dimensions for innovation, and ensure that (along with current fare regulation) unforeseen costs – in the form of infrastructural enhancements or asset purchases – are not passed onto consumers.
Unfortunately, my gut feel is that the PTOs’ executives have concentrated upon the aspect of driving costs down per se, and have not maximised revenue gains to raise long-term economies of scale, or to heighten productivity. Adequate cost savings must go back to the public, and it is the government’s duty to ensure that complacency, obstinacy and laissez-faire attitudes do not set in.
Failure Of The LTA And PTC To Monitor Service Standards
Transport Minister Lui Tuck Yew’s assertion that the current regulatory framework is a “robust” one is, naturally, perceived to be farcical and detached from day-to-day realities.
There are two more bureaucracy-based concerns: first, the LTA and PTC are supposed to regulate the various networks to ensure that service standards are not compromised, but anecdotally seem to have failed to do so ; second, the relevant government agencies – in their reviews and checks – might have neglected the technical aspects of maintenance, tests and checks . Not surprisingly, against this background, many commuters cannot reconcile the consistently high financial returns achieved by the providers, with the observed service incompetency or fare discrepancies on the ground.
Present responses – such as the knee-jerk investigations along train railway lines and the recent assembly of an independent committee of inquiry – have been painfully reactive, and reflect a clear oversight on the part of not just the PTOs, but also the bodies that were supposed to keep the latter in check. Without active reinforcement of these standards, the PTOs have had their priorities grossly misplaced, and are getting away – behind a façade of cost-maximisation – with the bare minimums in operation, maintenance capabilities.
While the managements of the service providers should take serious responsibility for the assortment of weaknesses, the LTA and PTC are equally culpable.
Making The Land Transport Masterplan A Reality
Heightened Authority And Expanded Mandate Of The PTC. The PTC needs to be fundamentally strengthened with an expanded and more authoritative mandate, so that greater regulation can be enforced. This needs to go beyond the basic tasks of fare management and vaguely-defined “service standards”, with more robust explorations (together with the LTA) into operation and maintenance abilities. Reviews should be done to ensure that profit gains from cost-savings are invested into sustainable economies of scale, including but not limited to research, staff development and productivity courses.
Have Smaller Bus Providers Involved In High Volume Routes. In specific bus routes that are overly-crowded (especially when passengers opine that the present capacity is simply insufficient), smaller bus providers can be engaged to provide parallel services.
Most Robust Public Discourse On Service Standards. Representatives from different constituencies, or random groups of passengers should be engaged through regular quantitative and qualitative studies. These independent surveys – beyond the pedantic, traditional reliance on newspaper forums or post-incident conversations – will tangibly keep PTOs on their toes, and allow genuine frustrations to be articulated properly.
Concessions For Disabled Persons, And Polytechnic Students. With the profits and economies of scale, concessions for these groups of individuals – which have been repeatedly called for – should be introduced.
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 Mr. Gerald Giam, in his online commentary “Overhauling Singapore’s Public Transport Model” (July 19, 2011), explained the Party’s proposal “for a not-for-profit National Transport Corporation”; this recommendation, with its corresponding points, has been reflected in the Party’s 2006 and 2011 Election manifesto.
 X-inefficiency (sometimes also known as technical inefficiency) occurs when cost controls become lax. This can bring about overstaffing, unnecessary expenditures, failure to keep up with technological advancements, and general stagnation.
 A natural monopoly refers to an economic situation when long-run average costs (LRAC) would be lower if an industry was under monopoly instead of being shared between competitions. Economies of scale can be reaped over a large output range.
 Common complaints include chronic overcrowding during peak-hour travels, the irregularity of bus and train services, poor customer service interactions, security breaches of the train depots, the lack of transparency in communications et cetera.
 For instance, MRT service disruptions between December 15 and 17, 2011 were attributed to a possible alignment problem in the rail system, as well as other infrastructural or maintenance oversights.