S’pore can benefit from ecosystem around rail

The writer of “S’pore govt steers clear of Western privatisation model” (Nov 12) noted that because Hong Kong’s MTR Corporation owns the real estate sitting above its train stations, the Hong Kong government has given goodies to make MTR viable.

First, it is unclear how MTR acquired the real estate. There is no subsidy if it bought the land at market prices. Second, its rail business is profitable in itself and not subsidised by its property business.

The key to MTR’s success is integration — the integration of rail with commercial and residential developments to provide a living ecosystem around rail transport, which creates demand for rail commuting.

At the same time, the convenience reduces people’s desire to own cars and, in turn, the need to build roads.

Those who visit Hong Kong would notice that while its roads are narrower than ours, they are generally not as congested, even during peak hours and without Electronic Road Pricing.

Owing to its self-interest in maximising the success of rail operations, MTR is probably the best entity to build this ecosystem optimally. Allowing it to develop the real estate above the stations has therefore helped improve the welfare of Hong Kong’s people, instead of short-changing them.

Singapore has adopted a more conservative approach. Today, there are still many vacant or underused plots of land around MRT stations. The underlying policy is to reserve those plots for future developments by private developers.

While a wait-and-see approach may appear to maximise the benefit to the nation when the land is eventually sold at high prices to developers, this must be weighed against the cost of leaving prime land unused for a long time. The tangible cost would be the cost of running feeder bus services and the cost of building roads and car parks to meet the desire to own cars. The intangible cost would be the time spent commuting.

Also, the high land prices are eventually borne by citizens through the high cost of living. On a nett basis, I am unsure whether this policy accrues maximum welfare to our citizens.

Recently, I visited Guangzhou and noticed that the city has also done a good job of building a living ecosystem around rail transport, on a bigger scale than in Hong Kong.

Despite having a 20-year head start on Guangzhou, Singapore has fallen behind because we have not been bold enough to build such an ecosystem.