Cherry picking not an issue

Apart from Nicole Seah, there’s something else I like about NSP too, and that’s their transport proposal I like it so much, I’ve come up with a few suggestions of my own to rebut some of  these (http://www.todayonline.com/Print/Singapore/EDC110729-0000019/Multiple-transport-operators-could-see-commuters-paying-more,-says-Lui ) points about “cherry-picking”

 

A major excuse argument Lui put forth to counter NSP’s proposal of opening up transport routes to multiple private providers is that there will be ‘the “cherry-picking” of lucrative routes by multiple operators (that)  could end up with commuters paying more.’

This doesn’t make sense to me on several counts

 
Housing, education, healthcare etc already use the proposed private/public model.

Firstly, we see the private/public model already applied successfully with housing, education, healthcare and the like. Yes, private developers do not cater to low-cost housing for low income groups — that’s where the government (should) step in with low cost housing. There are educational courses and healthcare specialties which are necessary, but again not lucrative — there’s where public schools and hospitals come in. Similarly, NSP’s proposal calls for the government to come in where routes are not lucrative.

 

 

Other transportation like airlines & school buses, fare very well with multiple players

One can argue that comparing the transport sector to other sectors is comparing apples and oranges. Well, I would suggest we look to the airline industry or the school bus industry which is almost entirely privatized with multiple players. In many countries, private airlines of course ply the lucrative routes. However, many national carriers also ply domestic routes that are less lucrative, because ensuring accessibility and connectivity is in the interest of the government.  School buses in Singapore are almost all privately run by a multitude of players. It’s a wonderful model where school children from the most ulu parts of Singapore can still afford to get to school.

 

 

Many ways exist to level the profitability across routes

As Lui points out, the license to ply lucrative routes could be packaged with non-profitable routes. That’s just one way. Other ways I can think of (just by sitting in my armchair for 10min)

-  License fees can vary according to the profitability of the route to level profitability across different routes. Setting the different license fees is a complicated matter? We can always apply our COE model to transport routes where private transport providers bid for the right to service routes for 5 or 10 yr blocks. We can even have the “expressway category” “ulu road category” “open category” etc. It’s similar to renting out shop space. That some locations have higher customer traffic than others has not seen customers paying much more at convenience stores beneath HDB blocks compared with Orchard Rd malls. Neither have we seen a lack of convenience stores beneath HDB blocks. Why? Difference in rental price.

- For routes that are so unpopular because they actually incur significant losses , a subsidy or grant model can be applied, where the government awards grants/subsidies to the best provider.

 

 

Multiple private providers as a way to relief current transport issues?

It’s a very tough choice these days, picking a mode of transportation during peak hours (and it’s not like you can choose what time you get to start work).

MRTs are sardine packed, buses are packed and they do the neighborhood bus-stop tour that doubles your journey time, cars and cabs are exorbitantly priced. I’m fairly lucky that a premium bus service serves my neighborhood (and only my neighborhood). This bus takes me to work in the same duration that a cab would, but cost just a fraction of the price — double of my feeder bus + MRT fare. I’m willing to pay this for my guaranteed, comfortable bus seat. It helps reduce road traffic because I suspect a lot of professionals that use this bus service would be driving, if not for the comfort and convenience of the bus service. I’m just surprised why there aren’t more of such services around. And irked that it’s one of the major transport providers that is providing the service when multiple smaller transport providers can give them some decent competition. With multiple players, some opting to take a slight detour to avoid jammed up roads, I think the traffic situation may be relieved.

 

 

 

Having multiple private transport providers is such a win-win situation for everybody, I can’t imagine why we shouldn’t implement it. The only people who will be negatively impacted by such a move are perhaps the shareholders of the existing major transport companies. One would naturally wonder if the decision-makers are allowed to hold shares in these transport companies (I’d think/hope not!) , or whether the decision-makers are good friends with any major shareholders. I’m not too sure how much transparency there is, and I’m a bit lazy to do any digging, so I’m hoping the NSP or some journalist would go do the investigation & publish the news on TOC or something. Not sure if it’s too much to hope for our Opp MPs to ask ?