Pritam Singh's speech in parliament on the government's $1.1 billion gift
to publicly listed bus operators.
"Moving on the second issue Mr Speaker, I would like to register my concern
about the Bus Services Enhancement Fund as announced by the Minister. No
one I have met since the Minister’s speech really disputes the benefits of
additional buses on the road, particularly if in the Minister’s words, it
will serve to reduce crowding and waiting time. But there nevertheless
remain some very serious questions about this $1.1b “one-time” commitment
to help fund the purchase of 550 buses.
Mr Speaker Sir, many Singaporeans are asking why the shareholders of our
publicly listed bus operators are being extended this unusual generosity
by the government. According to both their 2010 annual reports — both of
which are available online – SBS Transit has a market share of 75% and has
around 3000 buses on the road, while SMRT has slightly less than 1000 buses.
In the case of SBS Transit, the top 5 shareholders of the company hold 83%
of all the shares of the company. The largest shareholder of SBS Transit
ComfortDelgro owns 75.11% of the company, while the next four largest
shareholders of SBS Transit are BNP Paribas Securities Singapore, DBS
Nominees Pte Ltd, United Overseas Bank Nominees Pte Ltd and Citibank
Nominees Singapore Pte Ltd.
In the case of SMRT, its top five shareholders account for 73% of all the
shares of the company. The largest shareholder is Temasek Holdings which
owns 54.33% excluding its deemed interest, while the next four largest
shareholders are DBS Nominees Pte Ltd again, Citibank Nominees Singapore
Pte Ltd, DBSN Services Pte Ltd and HSBC (Singapore) Nominees Pte Ltd.
The public unhappiness over the Bus Services Enhancement Fund since
Minister Tharman’s budget speech has been very apparent. Part of the reason
for this I hazard is because this government has traditionally been quick
to urge Singaporeans to choose the path of self-sufficiency, reminding
ordinary Singaporeans that there are no free lunches and no one owes us a
living.
It would be useful for this House to remember that both SBS Transit and
SMRT pay their top management market-rate salaries, pay their shareholders
regular dividends, while operating in near-monopolistic conditions. By any
stretch of the imagination, these are not broken-back companies.
In particular, the SBS Transit 2010 Annual Report also stated the company’s
intention to purchase new buses in addition to funding additional capital
expenditure. For that purpose, it launched a note program in May 2010,
issuing a $100m fixed rate note, which is due in 2015. So not only is the
company not a broken back entity, it clearly knows how to raise money too.
And FY 2010, SBS Transit paid it shareholders dividends amounting to $27m,
while SMRT paid out $102m to its shareholders.
Unsurprisingly, discerning and sensible Singaporeans have been quick eschew
the government’s $1.1b windfall for the top shareholders of both SBS
Transit and SMRT Corp. While I appreciate the government’s intentions to
put buses on the road quickly, I would urge it to claw back the $1.1
billion of taxpayer dollar expended on these bus operators over a fixed
period of time, after consultation with SBS Transit and SMRT Corp. There
ought to be nothing unusual about this as the government already extends
many direct and indirect financial subsidies to both these
profit-generating private operators.
For e.g. they are exempted from bidding for Certificates of Entitlement,
and they are also exempt from the Additional Registration Fee, the main
vehicle tax and the duty on diesel. In addition, both these operators are
allowed to keep their buses on the road for 20 years, twice as long as
almost all other vehicles. They are also charged a nominal rent for the
space their interchanges take up, while reaping the profits their
advertising revenue generates.
Mr Speaker Sir, I am reminded of a resident who runs a SME, who spoke to me
on the back of on the Aljunied Constituency Committee’s lunar new year
dinner celebrations earlier this month. He implored me to petition the
government in parliament to reduce or subsidise the COE of goods vehicles
for SMEs. As members would know, the COE for goods vehicles and buses are
classified under Cat C COEs.
While our two profit earning operators do not pay a cent for their COEs,
small time businessmen will pay in excess of $50,000 for his COE based on
today’s market rate. While this is not an apple for apple comparison, it
says something about the perception the man on the street has about this
government’s lack of desire to communicate why our bus operators are being
extended this $1.1b gift. I understand the Transport Ministry will address
this issue in the upcoming COS debates and I certainly hope it fully
addresses the genuine misgivings many Singaporeans have over the Bus
Services Enhancement Fund.
Mr Speaker Sir, I have a second query about the figure of $1.1b for the Bus
Services Enhancement Fund. I had to learn from the media that the figure
includes the total operating cost for the vehicles for 10 years, and it
also includes the salaries of bus drivers.
According to the 2010 SBS Transit financial report, in that FY, SBS Transit
placed an order for 600 buses, comprising 300 award-winning Euro-5
compliant Mercedes Benz low-floor single deck buses and another 300 Volvo
double-deckers, all for the price of $268m dollars. Taking into account
inflation over the two last years, I hope the government gives the public a
detailed breakdown of the operating costs and the salary component that was
set aside for the Bus Services Enhancement Fund, in addition to all other
components that have not been publically revealed so far. Too much of this
dispensation of taxpayer dollar to these two profit generating monopolies
is currently unknown to the public beyond the big figure, and some
transparency is in order.
Mr Speaker Sir, a third concern I note that dominated the online media in
particular, concerns the unspoken of implications of 800 additional buses
on the road. The routine questions are – is the government planning for
another spike in immigrant arrivals, if so how many are being planned for?
And what sort of planning parameters is the government working with? Is
this $1.1b a harbinger of things to come in terms of an even larger
population size?
It would be apposite for the government to answer these queries because
there is already a sense of an over-crowded Singapore where public space is
at a premium.
Other questions also dominate the public realm about this $1.1b gift. What
will this cash injection do for bus fares going forward? Are both operators
going to use the profits generated and invest them overseas? Should
Singaporeans anticipate similar ostensibly one-time gifts to other
publically-listed entities or companies of national consequence such as
companies in which Temasek Holdings or GIC own a stake? And can the
taxpayers now demand greater transparency from all companies like SMRT and
SBS Transit which receive taxpayer injections? Beyond just educating the
public on how their taxpayer dollar is spent, I believe such accountability
would generate greater trust between citizens and the government.
Mr Speaker Sir, $1.1b is a whopping sum by any stretch of the imagination.
The government should set out clearly how the figure was arrived at and
what this policy move of extending cash injections to publically listed
entities that perform a public function implies for policy-making going
forward." - MP for Aljunied GRC Pritam Singh
to publicly listed bus operators.
"Moving on the second issue Mr Speaker, I would like to register my concern
about the Bus Services Enhancement Fund as announced by the Minister. No
one I have met since the Minister’s speech really disputes the benefits of
additional buses on the road, particularly if in the Minister’s words, it
will serve to reduce crowding and waiting time. But there nevertheless
remain some very serious questions about this $1.1b “one-time” commitment
to help fund the purchase of 550 buses.
Mr Speaker Sir, many Singaporeans are asking why the shareholders of our
publicly listed bus operators are being extended this unusual generosity
by the government. According to both their 2010 annual reports — both of
which are available online – SBS Transit has a market share of 75% and has
around 3000 buses on the road, while SMRT has slightly less than 1000 buses.
In the case of SBS Transit, the top 5 shareholders of the company hold 83%
of all the shares of the company. The largest shareholder of SBS Transit
ComfortDelgro owns 75.11% of the company, while the next four largest
shareholders of SBS Transit are BNP Paribas Securities Singapore, DBS
Nominees Pte Ltd, United Overseas Bank Nominees Pte Ltd and Citibank
Nominees Singapore Pte Ltd.
In the case of SMRT, its top five shareholders account for 73% of all the
shares of the company. The largest shareholder is Temasek Holdings which
owns 54.33% excluding its deemed interest, while the next four largest
shareholders are DBS Nominees Pte Ltd again, Citibank Nominees Singapore
Pte Ltd, DBSN Services Pte Ltd and HSBC (Singapore) Nominees Pte Ltd.
The public unhappiness over the Bus Services Enhancement Fund since
Minister Tharman’s budget speech has been very apparent. Part of the reason
for this I hazard is because this government has traditionally been quick
to urge Singaporeans to choose the path of self-sufficiency, reminding
ordinary Singaporeans that there are no free lunches and no one owes us a
living.
It would be useful for this House to remember that both SBS Transit and
SMRT pay their top management market-rate salaries, pay their shareholders
regular dividends, while operating in near-monopolistic conditions. By any
stretch of the imagination, these are not broken-back companies.
In particular, the SBS Transit 2010 Annual Report also stated the company’s
intention to purchase new buses in addition to funding additional capital
expenditure. For that purpose, it launched a note program in May 2010,
issuing a $100m fixed rate note, which is due in 2015. So not only is the
company not a broken back entity, it clearly knows how to raise money too.
And FY 2010, SBS Transit paid it shareholders dividends amounting to $27m,
while SMRT paid out $102m to its shareholders.
Unsurprisingly, discerning and sensible Singaporeans have been quick eschew
the government’s $1.1b windfall for the top shareholders of both SBS
Transit and SMRT Corp. While I appreciate the government’s intentions to
put buses on the road quickly, I would urge it to claw back the $1.1
billion of taxpayer dollar expended on these bus operators over a fixed
period of time, after consultation with SBS Transit and SMRT Corp. There
ought to be nothing unusual about this as the government already extends
many direct and indirect financial subsidies to both these
profit-generating private operators.
For e.g. they are exempted from bidding for Certificates of Entitlement,
and they are also exempt from the Additional Registration Fee, the main
vehicle tax and the duty on diesel. In addition, both these operators are
allowed to keep their buses on the road for 20 years, twice as long as
almost all other vehicles. They are also charged a nominal rent for the
space their interchanges take up, while reaping the profits their
advertising revenue generates.
Mr Speaker Sir, I am reminded of a resident who runs a SME, who spoke to me
on the back of on the Aljunied Constituency Committee’s lunar new year
dinner celebrations earlier this month. He implored me to petition the
government in parliament to reduce or subsidise the COE of goods vehicles
for SMEs. As members would know, the COE for goods vehicles and buses are
classified under Cat C COEs.
While our two profit earning operators do not pay a cent for their COEs,
small time businessmen will pay in excess of $50,000 for his COE based on
today’s market rate. While this is not an apple for apple comparison, it
says something about the perception the man on the street has about this
government’s lack of desire to communicate why our bus operators are being
extended this $1.1b gift. I understand the Transport Ministry will address
this issue in the upcoming COS debates and I certainly hope it fully
addresses the genuine misgivings many Singaporeans have over the Bus
Services Enhancement Fund.
Mr Speaker Sir, I have a second query about the figure of $1.1b for the Bus
Services Enhancement Fund. I had to learn from the media that the figure
includes the total operating cost for the vehicles for 10 years, and it
also includes the salaries of bus drivers.
According to the 2010 SBS Transit financial report, in that FY, SBS Transit
placed an order for 600 buses, comprising 300 award-winning Euro-5
compliant Mercedes Benz low-floor single deck buses and another 300 Volvo
double-deckers, all for the price of $268m dollars. Taking into account
inflation over the two last years, I hope the government gives the public a
detailed breakdown of the operating costs and the salary component that was
set aside for the Bus Services Enhancement Fund, in addition to all other
components that have not been publically revealed so far. Too much of this
dispensation of taxpayer dollar to these two profit generating monopolies
is currently unknown to the public beyond the big figure, and some
transparency is in order.
Mr Speaker Sir, a third concern I note that dominated the online media in
particular, concerns the unspoken of implications of 800 additional buses
on the road. The routine questions are – is the government planning for
another spike in immigrant arrivals, if so how many are being planned for?
And what sort of planning parameters is the government working with? Is
this $1.1b a harbinger of things to come in terms of an even larger
population size?
It would be apposite for the government to answer these queries because
there is already a sense of an over-crowded Singapore where public space is
at a premium.
Other questions also dominate the public realm about this $1.1b gift. What
will this cash injection do for bus fares going forward? Are both operators
going to use the profits generated and invest them overseas? Should
Singaporeans anticipate similar ostensibly one-time gifts to other
publically-listed entities or companies of national consequence such as
companies in which Temasek Holdings or GIC own a stake? And can the
taxpayers now demand greater transparency from all companies like SMRT and
SBS Transit which receive taxpayer injections? Beyond just educating the
public on how their taxpayer dollar is spent, I believe such accountability
would generate greater trust between citizens and the government.
Mr Speaker Sir, $1.1b is a whopping sum by any stretch of the imagination.
The government should set out clearly how the figure was arrived at and
what this policy move of extending cash injections to publically listed
entities that perform a public function implies for policy-making going
forward." - MP for Aljunied GRC Pritam Singh
