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<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>It's but one of the dependable avenues for Father and Daughter-in-Law to milk the Peasants for cash to punt bankrupt banks to satisfy their lumber 1 ego and insatiable greed!
Public transport: Re-look fare-driven business model
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE Singapore Mass Rapid Transit (SMRT) corporation and ComfortDelGro have submitted their applications for fare adjustment to the Public Transport Council on Aug 1.
The SMRT reported first-quarter operating profits of $48m while ComfortDelGro reported first half-year operating profits of $126m for the period ending on June 30.
SBS Transit, the listed local rail and bus arm of ComfortDelGro, reported first-half year operating profits of $24m for the same period.
In their most recent full financial year, SMRT and ComfortDelGro made operating profits of $178m and $335m respectively, while SBS Transit posted $53m.
The fare adjustment application is not timely. In fact, the whole idea of the fare adjustment mechanism is flawed. Both SMRT and ComfortDelGro cited rising fuel prices and increasing operating costs as the main reasons for their application. Which business in Singapore does not face these problems? Many companies reported severe losses during these turbulent times and can they pass on the cost increases to their customers?
The SMRT is dependent on the local rail and bus segment for more than 65 per cent of its operating results, while ComfortDelGro derived 60 per cent of its operating earnings from overseas operations.
It is timely to review SMRT's business model by growing its non-fare income stream without adding an extra financial burden to the poor commuting public suffering from shrinking disposable income due to inflation.
The Government's efforts to drive more motorists onto trains and buses through its electronic road pricing strategy seems to have paid off, judging by the increase in train ridership.
Train ridership jumped significantly over the past six months and full year ridership is expected to dwarf last year's.
Without granting an increase in fare, the operating profits of the transport operators are bound to increase due to higher revenue and economies of scale.
In the short term, the application for fare adjustment should be stayed while the Government works closely with the two transport groups to re-invent their business model.
In the long term, maybe they should be revamped towards a cost-based model and differentiate the rail and bus segments from their other market-driven commercial businesses.
If viable, surplus from these other segments could be ploughed back to subsidise the rail and bus segments since they are riding on monopolistic gains in the captive public transport market.
That could possibly bring about lower fares without compromising ridership comfort and quality, and achieve the grand policy goal of lesser cars on the roads.
Ee Teck Siew
Public transport: Re-look fare-driven business model
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->THE Singapore Mass Rapid Transit (SMRT) corporation and ComfortDelGro have submitted their applications for fare adjustment to the Public Transport Council on Aug 1.
The SMRT reported first-quarter operating profits of $48m while ComfortDelGro reported first half-year operating profits of $126m for the period ending on June 30.
SBS Transit, the listed local rail and bus arm of ComfortDelGro, reported first-half year operating profits of $24m for the same period.
In their most recent full financial year, SMRT and ComfortDelGro made operating profits of $178m and $335m respectively, while SBS Transit posted $53m.
The fare adjustment application is not timely. In fact, the whole idea of the fare adjustment mechanism is flawed. Both SMRT and ComfortDelGro cited rising fuel prices and increasing operating costs as the main reasons for their application. Which business in Singapore does not face these problems? Many companies reported severe losses during these turbulent times and can they pass on the cost increases to their customers?
The SMRT is dependent on the local rail and bus segment for more than 65 per cent of its operating results, while ComfortDelGro derived 60 per cent of its operating earnings from overseas operations.
It is timely to review SMRT's business model by growing its non-fare income stream without adding an extra financial burden to the poor commuting public suffering from shrinking disposable income due to inflation.
The Government's efforts to drive more motorists onto trains and buses through its electronic road pricing strategy seems to have paid off, judging by the increase in train ridership.
Train ridership jumped significantly over the past six months and full year ridership is expected to dwarf last year's.
Without granting an increase in fare, the operating profits of the transport operators are bound to increase due to higher revenue and economies of scale.
In the short term, the application for fare adjustment should be stayed while the Government works closely with the two transport groups to re-invent their business model.
In the long term, maybe they should be revamped towards a cost-based model and differentiate the rail and bus segments from their other market-driven commercial businesses.
If viable, surplus from these other segments could be ploughed back to subsidise the rail and bus segments since they are riding on monopolistic gains in the captive public transport market.
That could possibly bring about lower fares without compromising ridership comfort and quality, and achieve the grand policy goal of lesser cars on the roads.
Ee Teck Siew
