SMRT

[countonme]

I think one problem here is that, generally we ony hear good news from the media. Thus small issues are not scrutinised by the publci and only when the problem become big then the impact on people are felt. By then, it already had lead to many breakdowns and disruption on daily activities. And still I see same approach to resolving such problem. Top management has irrelevant experience/skill set in transport and once they are appointed, they need go thru a learning curve which takes about 2~3 yrs.

[Temperament]

Transport for the masses is really the most, most basic need for any city in the world. What's more Singapore is really a quite small city-state. If you want to compare transport services, i think it is best to compare to HK. HK is definitely better whether price wise or not?
Our transport system (HDB HOUSING included) were screwed-up by our GOV in the recent past without doubt. Even the "PINK PATHER" had admitted-- Sudden surplus increases of immigrants with out increases of transport & housing, etc...
Ha! Ha!
Even Ah MOU knows it can not be done this way. Pink Panther???

[Temperament]

FatBoi Wrote: So my point is: the advertising should be expected and a right thing for SMRT to be doing. Whether or not the public buys it is a separate matter, I must say we are a very demanding lot, us Singaporeans.
Unquote:-
On the contrary. i think Singaporeans are more 4 Ks than demanding. 50 to 60 years still 60 % on the last GE. You tell me what has changed? Only can KPKB but GE result is always still the same.

Maybe the younger generations are a different lot as they better educated. Therefore they are not so easily psycho. IMHO.

[corydorus]

This is what I am referring to. Public Housing and Transport are in Chaos. To increase population so large, this must have been talked "N times" in cabinet meetings. Some folks are clearly asleep counting their Million dollar $$$$$$. Lesser mortals to them are no less responsible.

[KopiKat]

An interesting extract from MayBank Kim Eng report at remisiers.org,

With stagnating bus fares and rising cost from inflationary pressure, the two existing operators have been running loss-making operations for years. Under a business model that is financially unviable, we believe that SMRT and SBS Transit, a subsidiary of ComfortDelGro, would be reluctant to renew their bus licences when they are due in 2016.

[FatBoi]

Thanks KopiKat for highlighting the report.

What's also interesting is the suggestion that a tender system may be the way to go.
Currently, I can't see how the tender system can totally replace the existing model.

One problem is: who will bid for loss-making bus routes?
In the scenario where no one bids, who will be the transport provider of last resort for these routes?

Maybe a relook at the current routes is necessary to ensure each route makes economic sense.

[NTL]

Had read the report.

How do a tender system help to stem the loss? Anyone can provide any insight? Thanks.

[safetyfirst]

Let me share my thoughts on how to stem losses.

Whether tender or not, it is not important.

At the end of the day, they must be able to raise fares high enough to make a profit. However, as usual, singaporeans make loud noise when you raise the fare by say 10 cents. Raising fares is subjected to regulation. Will they raise fares to put themselves at a disadvantage for the next elections, that i am not sure but i believe due to vested interests, it is unlikely. Or if they raise fares, it is a miserable raise that is not enough to put a smile on shareholders' faces.

[FatBoi]

Had read the report.

How do a tender system help to stem the loss? Anyone can provide any insight? Thanks.

Hi NTL, are you referring to below para in the report?

"Tendering system would likely reverse losses – upside to profits. In the near term, switching to a tender system will be positive for the Public Transport Operators (PTOs) as losses at their bus units will reverse. The future profitability of the bus business would depend on the bids placed during tenders. Our analysis suggests that our profit estimates for next year would be raised by 18-22%, if the PTOs retain their current market share and their bus units achieve a 10% margin under the new business model."

I suspect they meant to say the PTOs will be able to exit existing loss-making bus routes (which they are mandated to run under license) and instead concentrate on winning and operating profit-making routes (possible under tender system). Degree of profitability will therefore depend on the bidding outcomes.

I have my doubts that the PTOs will end up raising profits by 18-22% though, since they should be losing market share (willingly). 10% margin increase under tender model is a stretch given increased competition?

What do you think?

[NTL]

Had read the report.

How do a tender system help to stem the loss? Anyone can provide any insight? Thanks.

Hi NTL, are you referring to below para in the report?

"Tendering system would likely reverse losses – upside to profits. In the near term, switching to a tender system will be positive for the Public Transport Operators (PTOs) as losses at their bus units will reverse. The future profitability of the bus business would depend on the bids placed during tenders. Our analysis suggests that our profit estimates for next year would be raised by 18-22%, if the PTOs retain their current market share and their bus units achieve a 10% margin under the new business model."

I suspect they meant to say the PTOs will be able to exit existing loss-making bus routes (which they are mandated to run under license) and instead concentrate on winning and operating profit-making routes (possible under tender system). Degree of profitability will therefore depend on the bidding outcomes.

I have my doubts that the PTOs will end up raising profits by 18-22% though, since they should be losing market share (willingly). 10% margin increase under tender model is a stretch given increased competition?

What do you think?

When they do the tender, they mix the higher profit route with lower profit route, so they are unable to "choose". Their only choice is to bid lower, based on their expected revenue. If others outbid them, they will not get the routes. So they end up with nothing.

If they (SMRT and SBS) have so many buses in hand, they will want to utilise them rather than leave them idle, so they may bid more aggressively to secure the routes. Else they will have many buses to dispose, which I don't think is a good choice.

Furthermore, I don't think their losses come from the licenses. Rather, the losses come from the higher operating cost, i.e. manpower and fuel costs. The fare is also not within their control. These are still beyond their control.

Maybe I just being too pessimistic. But I not an operator, and don't really know exactly the cost of operation. So maybe they really can be profitable?

Just some thoughts...