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Central control and market forces for MRT system

There have been calls recently to reverse the privatisation of the rail transport system. Supporters believe that doing so would make the system more coordinated and accountable to commuters. Detractors worry that a monopoly would reduce efficiency and service standards.

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Lee Teck Chuan

There have been calls recently to reverse the privatisation of the rail transport system. Supporters believe that doing so would make the system more coordinated and accountable to commuters. Detractors worry that a monopoly would reduce efficiency and service standards.

Each camp has valid reasons, which seem plausible depending on how we prioritise the various considerations for serving the people at different points in time. This played out clearly in our history.

At independence, our transport system was fractious, dominated by bus companies that cherry-picked their routes. Breakdowns were common, and many routes overlapped. Pirate taxis roamed our streets, with fares undercut. That was typical of the profit motive taken to extremes.

In contrast, we could recall the telecommunication and postal services of yesteryear. They were slow and inefficient. Public service then was not what we know now. Monopoly kept prices high and bred inertia, not change and innovation.

Between those two extremes, we must find a way that best suits our needs now. With our densely populated pockets of housing estates spread across the island, a mass rapid transport network becomes a necessity. An affordable, reliable system is paramount.

Train breakdowns of recent times are perhaps a symptom. Did we take privatisation too far, too quickly? Did we privatise an essential public good but averted the same fate for housing, education and health care?

Stripped bare, what is the topmost priority we should address after sieving through the national agenda in respect of transport?

Cause and effect are often indiscernible. Even if we take back control of the MRT system as a reaction to the current malaise, there is no assurance that without competition, the system would not turn incompetent down the road.

Adopting a reactive stance may disrupt Singapore’s economic well-being. Thus, I would suggest a combination of central control and market forces at work.

The building and maintenance of the rail system should come under the ambit of the Government while the fare service and management of retail properties are farmed out to the private sector.

There would be enough profit incentive for private firms to partake in this arrangement, as a huge cost component of theirs would be alleviated. Commuters would probably pay lower fares. Competition would weed out inefficient operators.

The Government has the capacity to absorb the long-term costs of building and maintaining the infrastructure, not unlike its role in the building and upkeep of roads.

The costs can be depreciated over a longer time frame while the tracks are in service. This could be seen as subsidising an essential public good. Cost savings would also be derived from having a shared pool of engineering expertise.

Any decisions taken on the current woes cannot be made lightly and hastily. It may be more costly to undo a wrong if we make U-turns in future.

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