All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going on?

[Confuseous]

Dear Esteemed Members of the Parliament Committee for Transport,

I wrote earlier in Dec 11 that generous dividends were being paid to shareholders of public transport operators. For Budget2012, Min Tharman announced that $1.1bil will be injected to boost bus services. Govt will fund the majority of the buses to be added to the system while the transport companies will also contribute a portion.

If these companies needed help with their capital reinvestments, then why did they pay out such generous dividends to shareholders in the past years (many who do not take public transport)?

Why should the govt and taxpayers bear the majority burden of boosting bus services when these are listed companies? If these are listed companies, shouldn’t they look to the capital markets for money, such as share placements or rights issue? Would there be an effort to replenish the $1.1bil to state coffers from the transport companies?

Singapore is rather unique in running its public transport companies via a stock exchange listing. Should there be efforts to review this dichotomy?

“Deputy Prime Minister Tharman Shanmugaratnam said Friday that the government will channel $1.1 billion towards increasing Singapore’s bus capacity by 20 per cent over the next five years.

Delivering Singapore’s budget for 2012 in parliament today, Mr Tharman said the ‘Bus Services Enhancement Fund’ will include the purchase of buses and running costs for 10 years.” Asiaone dated 17 Feb

Thank you for reading my queries amidst your busy schedules. I hope you would be able to shed some light on the issue or perhaps bring it up during the Budget debate.

Sincerely.

My earlier post on the privatization and dividend policy of SMRT:

- http://unbrandedbreadnbutter.wordpr...-public-bus-service-who-should-foot-the-bill/

 

[myfoot123]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

Ask HO JINX, Singaporeans just received lawyer letter from her husband saying it has nothing to do with her screwed up, though it is obvious that she indeed screwed up tax payers money.

 

[halsey02]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

Ask HO JINX, Singaporeans just received lawyer letter from her husband saying it has nothing to do with her screwed up, though it is obvious that she indeed screwed up tax payers money.

Who is screwing who? I am confused? but I know SINgaporeans are screwed!!

 

[singveld]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

pap mistake, public transport should be fund by taxes paid by car owners, pap greedy, they want to earn taxes from car drivers and not having to pay for buses and mrt.

 

[Unrepented]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

SBS is listed in sgx. It's a listed company owned by shareholders who may be private individuals or establishments.

Why use tax payers money to fund?! You got pass PSLE or not

Those interviewed by MSM said it's a good policy. Am I missing something

pap mistake, public transport should be fund by taxes paid by car owners, pap greedy, they want to earn taxes from car drivers and not having to pay for buses and mrt.

 

[singveld]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

SBS is listed in sgx. It's a listed company owned by shareholders who may be private individuals or establishments.
Why use tax payers money to fund?! :

all transport companies in the free world are funded partly by gov, if not they will all go bust. example japan and uk etc.

 

[Unrepented]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

1. Then why privatise them?

2. Monopolies of public goods and services are FOREVER profitable.

all transport companies in the free world are funded partly by gov, if not they will all go bust. example japan and uk etc.

 

[refulgence]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

Why should taxpayers fund the largesse to bus companies, with the consequent enrichment of their shareholders? The inequity can be resolved by nationalising transport services, so that the benefits of cost savings can accrue to citizens and profits after operating expenses can be used to fund capital expenditure.

 

[singveld]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

1. Then why privatise them?

2. Monopolies of public goods and services are FOREVER profitable.

so gov do not have to pay more to these listed transport company than if all fully fund by gov.
gov lists this transport companies, so they can get investments from private companies and investors for a cut of profit.
so let say, gov paid fully for north south , east west line, then they let them listed, so people will buy their stocks, these money are used to build north east and circle line. gov save the money, by not having to pay for new lines etc, in exchange they fund them in regular basis, so they will not go bust and investers keep pumping money into the listed companies. it is same for uk and japan.

uk gov also using this to build prison, hospitals, fire stations. without having to pay a single cents up front, they can build new infrastructure. but they sign contract to pay them regularly. like going to courts to buy a new washing machine and pay installments later.

 

[Unrepented]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

Read this article in the link below for starters, and please don't always use the "uk or us also do it kinda reasons" Circumstances, background and industrial structure etc. are different.

http://www.aar.com.au/pubs/baf/fofsep00.htm

Part of the expenditure by LTA all along do what one, have you ever wondered

One can also argue that this funding is akin to economic incentives etc. ............But for a monopoly of public services

all transport companies in the free world are funded partly by gov, if not they will all go bust. example japan and uk etc.

 

[Unrepented]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

All your explanations on the business model, strategies etc, and what you want to express to this forum on this topic, can be summarised into this last sentence in the quote right?

Then let me ask you;

1. Do you pay more under the installments scheme compared to cash upfront?

2. Don't tell me cashflow issues, peesai got how much foregin debt? How much in reserves for overseas investments to lose billions and still ok, never mind?

3. Why pay interest to private shareholders of a monopoly of public services

............. like going to courts to buy a new washing machine and pay installments later.

 

[Unrepented]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

Even say lah. Cashflow issues lah. Why not get funding from the capital market since it is listed.

And even say lah, share dilutions and what nots lah. Why not invite another investor/operator who will invest?

Why har?

so gov do not have to pay more to these listed transport company than if all fully fund by gov.
gov lists this transport companies, so they can get investments from private companies and investors for a cut of profit.
so let say, gov paid fully for north south , east west line, then they let them listed, so people will buy their stocks, these money are used to build north east and circle line. gov save the money, by not having to pay for new lines etc, in exchange they fund them in regular basis, so they will not go bust and investers keep pumping money into the listed companies. it is same for uk and japan.

uk gov also using this to build prison, hospitals, fire stations. without having to pay a single cents up front, they can build new infrastructure. but they sign contract to pay them regularly. like going to courts to buy a new washing machine and pay installments later.

 

[myfoot123]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

SBS is listed in sgx. It's a listed company owned by shareholders who may be private individuals or establishments.

:

PAP should openly account to the public who are these "shareholders". Are they the reLEEtive that make up of their cousins, siblings, in-laws both mother and father side? If it is, croynism is at its peak. LHL should explain to jusitfy his reasoning instead of just issuing letter requesting for apology without backing it up with hard informations.

 

[Unrepented]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

We know you swatting flies in the moderated section ok

Please come share you knowledge and enlighten us on the technicalities and complexities of such an expenditure item:*:

...................QUOTE]

 

[hockbeng]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

so gov do not have to pay more to these listed transport company than if all fully fund by gov.
gov lists this transport companies, so they can get investments from private companies and investors for a cut of profit.
so let say, gov paid fully for north south , east west line, then they let them listed, so people will buy their stocks, these money are used to build north east and circle line. gov save the money, by not having to pay for new lines etc, in exchange they fund them in regular basis, so they will not go bust and investers keep pumping money into the listed companies. it is same for uk and japan.

uk gov also using this to build prison, hospitals, fire stations. without having to pay a single cents up front, they can build new infrastructure. but they sign contract to pay them regularly. like going to courts to buy a new washing machine and pay installments later.

Why do u worship the UK or US?

Their system is screwed up!

We want our own system that works. Anyway, they have a very big country with many cities. We have 5 million stuffed into a small land area. This means its very cheap to run an efficient transport system.

 

[Unrepented]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

Relatively much lower cost per head.

Why do u worship the UK or US?

Their system is screwed up!

We want our own system that works. Anyway, they have a very big country with many cities. We have 5 million stuffed into a small land area. This means its very cheap to run an efficient transport system.

 

[Zombie]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

$1.1b is twice the market value of sbstransit, which owns 75% scheduled bus market share (also nel, lrt)

this means that,
2/3 of $1.1b is already more than enough to buy up all the scheduled bus businesses in singapore

http://www.bloomberg.com/quote/SBUS:SP
http://www.sbstransit.com.sg/transport/trpt_bus_overview.aspx

 

[Cestbon]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

Just buy over the SBS and SMRT bus. Delisted the company. Why listed company need gov to buy bus.

 

[Rakyat]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

Govt's move to fund bus purchases sparks public concern
By Hetty Musfirah | Posted: 22 February 2012 2238 hrs
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SINGAPORE: The government's move to spend S$1.1 billion over the next 10 years to fund the purchase of 550 SBS Transit and SMRT buses has sparked concerns among some Singaporeans.

A few have written to the government's feedback portal REACH, questioning why the government is using public funds to help profit-driven companies.

SBS Transit and SMRT are public-listed private enterprises.

Analysts said the government's move to help the two public transport operators grow their bus fleet does not mean a free lunch for them. They said commuters would stand to benefit from higher service standards, which are likely to be imposed on SBS Transit and SMRT.

Observers said the government's move is not unique. In affluent cities in Europe and Australia, private operators receive public-funded buses in order to achieve a more efficient transport network.

Assistant Professor Paul Barter from the Lee Kuan Yew School of Public Policy said: "In Singapore, if the government is going to be helping a private sector operator in this way, we would not do it in an open-ended way.

"We will need to set higher service standards. If we are giving money for the buses, we expect higher service in return. It would not just be a gift. There would be expectation of improved service."

Analysts said although the two operators are making profits overall, they have been weighed down by bus operations.

Latest data showed SBS Transit incurring an operating loss of S$6 million due mainly to increased fuel and staff costs.

Meanwhile, SMRT said it incurred a higher operating loss of S$1.7 million due to the same reasons.

So the assistance will come in handy to help boost capacity and meet the anticipated growth in demand.

Analyst John Rachmat from the Royal Bank of Scotland said: "The situation is such that the bus operations are not generating enough profits for the operators.

"In fact, in many cases, (they) are incurring losses. So if this continues, there will be no new investments in buses in Singapore and as a result, the public will suffer from more overcrowding."

With the government's funding for additional buses, "hopefully, what we will see is a lot more frequent bus services, a lot lesser overcrowding and more profits for the operators because that will be the reason for them to deliver the better services," said Mr Rachmat.

"In a way, they will earn more profits but in exchange for that, the public will see a lot better bus service in Singapore."

Observers believe the S$1.1 billion fund will not only go towards helping operators grow their fleet.

Given the big sum of money, there are indications it could also help operators get the manpower they need to run the buses.

They could increase salaries to make the job more attractive, particularly to Singaporeans.

Minister of State for Transport Josephine Teo said with the government chipping in to buy new buses, public transport operators must improve their service standards.

Mrs Teo on Wednesday defended the government's move to co-fund new buses at a post-Budget dialogue organised by feedback unit REACH.

"What Singaporeans want is quicker solutions," she said.

"They don't want to wait so long. So it's with Singaporean needs in mind that we assessed that the better way to do it, the faster way to do it, the more efficient way of doing it, is to partner the existing public transport operators to deliver the increased capacity."

Charles Chong, a member of the Government Parliamentary Committee (GPC) for Transport, said: "With the grant, I think this eliminates some of their excuses...that they can't get drivers (because) they can't pay them enough."

"This grant should not be used to bump up profits for shareholders -- it is meant really to help serve the public better, because you are using public funds for this; the expenditure should benefit the public," he added.

Mr Chong said operators are expected to bump up bus frequencies and serve more areas.

Analysts said they believe the operators will see operating costs going up in the short run. But the higher costs are unlikely to be transferred to commuters as higher fares.

Details on the S$1.1 billion fund are expected in the upcoming Budget debate.

- CNA/wk/ir

 

[batman1]

Re: All taxpayers pay for $1.1bil of buses, only shareholders benefit. What is going

Who is screwing who? I am confused? but I know SINgaporeans are screwed!!

Alamak,everyone in sinkeeland knows HJ is screwing Pinky,of course with a rubber dildo.