The Buzz over Public Transport: Can I get around quickly and cheaply?

By Daryl Choo

ILLUSTRATION: CALIDA SOH

This has happened a number of times already - SMRT should make better plans to prepare for this. Why are there no shuttle buses?

- Undergraduate Melody Gibson, Today, MRT breakdown: North-South, East-West lines down for hours, 7 July 2015

We’re glad there was no breakdown this morning. I’d say SBS Transit are doing an okay job so far.

- Student Muhammad Syahbudin Tajuddin, 20, CNA, Commuters hail convenience as Downtown Line 3 opens, 22 Oct 2017.

Owning a car is expensive in Singapore, which means that the public transport system is under pressure to deliver – both in terms of efficiency and price. That has meant changes to the financing model, and even changes to leadership, when the public gets angry. This is especially the case when the public believes that public transport operators are making a profit from a public good.

HOW DOES OUR RAILWAY SYSTEM FARE TODAY?

Singapore’s rail network currently spans 229km. By 2030, LTA hopes to grow that number to 360km, and close to 400km by 2040. Train carrying capacity has also increased by about 50% from 2013 to 2018, which LTA said has reduced crowding for the 3.5 million trips it completes a day.

In 2013, LTA pledged that 80 per cent of households would be within a 10-minute walk from a train station. Latest figures from a survey it conducted in 2016 put that number at 64 per cent, compared to 57 per cent in 2012.

SOURCE: LAND TRANSPORT AUTHORITY

Breakdowns and disruptions of the MRT services were a key gripe among commuters as well as opposition parties after Singapore suffered its worst MRT breakdown in 2015 which affected some 413,000 commuters.

To make matters worse, SMRT was beset by major accidents in the two years following, bringing into question the adequacy of the embattled firm’s safety procedures: In 2016, two SMRT trainees were killed by a passing train when they were performing works on a train track, and a train collision in 2017 left at least 29 injured.

In the years since the 2015 breakdown, Transport Minister Khaw Boon Wan has said the reliability of the MRT network has “improved significantly” after train assets have been renewed under a new financing scheme where these assets are now owned by the Government (See below: Who owns our trains?). In 2019, trains on average travelled 1.3 million km before a train fault of longer than five minutes — more than a seven-fold improvement since 2017.

SOURCE: LTA

However, the less frequent breakdowns seemed to have done little to raise commuter satisfaction. A 2019 survey by the Singapore Management University found satisfaction with the MRT system inched up 2 per cent from the year before, an increase that was “not statistically significant”. But it noted a narrowing of perceived quality and expectations of commuters, which suggested that “Singaporean’s collective psyche is gradually recognising the tangible improvements to our rail network.”

Another annual survey commissioned by the Public Transport Council showed commuter satisfaction levels with the MRT has improved from 7.3 in 2015 to 7.7 in 2019.

In the eyes of international consulting firms, Singapore’s public transport ranks frequently among the top spots. The city-state came in second in public transport effectiveness of trains and buses, trailing Hong Kong, in a 2018 urban transport report by McKinsey. The same report had the Republic coming out tops in commuter satisfaction. Singapore was also consistently among the top performers in a 2019 city mobility index by Deloitte and eighth in a 2017 sustainable cities mobility index by Arcadis.

WHAT ABOUT OUR BUSES?

Like our trains, all public bus assets in Singapore are owned by the Government. This includes bus infrastructure such as depots as well as the fleet management system and the physical buses themselves. The government also determines bus routes and service standards for bus operators to keep to.

This comes under the Government Contracting Model that was implemented in 2016, where bus operators are paid a fixed fee to run services for five years, which can be extended for another two years for “good performance”.

This was also a major change to the previously privatised bus industry where operators had to bear the full cost of infrastructure and operating assets. The high cost of running a bus service in Singapore had previously deterred competition in the market, entrenching a duopoly by SBS Transit and SMRT which had over decades amassed a sizeable fleet of buses.

With buses now contracted by the Government, LTA collects the revenue from commuter fares. These fares are set by the PTC after LTA submits information on the bus industry, such as whether bus operations are losses and profitable.

“This new industry model will enable the Government to make public bus services more responsive to changes in ridership and commuter needs, as well as inject more competition into the industry, thereby raising service levels for commuters over time,” LTA said in 2014 announcing the changes.

The first two contracts to run bus service packages under this model were awarded to Tower Transit Singapore and Go-Ahead Singapore respectively, both of which are headquartered in the United Kingdom.

WHO DECIDES HOW MUCH TO CHARGE?

The Public Transport Council, a government agency that advises the transport minister, sets the maximum fare adjustments that operators are allowed to make for the year. The council is chaired by retired judge Richard Magnus.

In calculating the cap on public transport fare adjustments every year, the PTC uses a formula-based approach similar to how the Hong Kong Mass Transit Railway and London public transport sets their fares.

This formula is reviewed every five years. The current formula, effective until 2022, takes into account year-on-year changes in the following factors:

• Consumer Price Index, a measure of inflation

• Wage Index, a measure of salary growth

• Energy Index, a measure of diesel and electricity costs

• Productivity Extraction Factor, a measure of the public transport operators’ productivity gains

• Network Capacity Factor, a measure of how effectively the supply of trains and buses are meeting ridership demands

Fare adjustments were sometimes carried forward to the following year to spread out the volatility price changes.

SOURCE: PUBLIC TRANSPORT COUNCIL

From December last year, train and bus fares were raised by as much as 7 per cent, or about 9 cents per trip when paying by card. This was the second year in a row transport fares were increased and the biggest percentage jump since 1998. The hike would help close the widening gap between fare revenue and costs, especially amid double-digit percentage hikes in energy prices in the past three years, PTC said.

Anticipating the fare hike, Mr Khaw said in July last year the Government was already subsidising more than 30 per cent of public transport operations and expected to spend $4.5 billion over the next five years to subsidise rail operators. He added higher fares would be needed to curb these subsidies especially for rail companies, which are making losses in the tens- to hundreds-of-millions a year.

Train operators are even mooting the possibility of reducing train frequency during off-peak hours to cut costs, a suggestion put forward by Mr Khaw. Over the next five years, the Government expects to spend $4.5 billion on operating subsidies, Mr Khaw said in July. He added that higher fares would be necessary to offset rising operating costs, which for the rail network has increased by about $270 million from 2016 to 2017.

To keep public transport affordable for lower-wage workers and people with disabilities, the Government funds two concession schemes estimated to cost $50 million annually while transport operators are also required to make contributions when they increase fares to the Public Transport Fund. This fund can be drawn on to provide vouchers to needy households.

THE BUZZ OVER THE TRAINS AND BUS

Frequent train disruptions draw the ire of commuters

Nothing makes commuters madder than realising that the train they are in isn’t moving. Worse still, when the train is actually wading through water. On Oct 7, 2017, a section of the tunnel between Bishan and Braddell stations was flooded, disrupting services on the North-South Line for 14.5 hours and affecting more than 230,000 commuters.

An investigation by the LTA found the incident to be “entirely preventable” and slapped a $1.5 million fine on SMRT, on top of the $2 million the operator had to dish out in repairs.

While the flooding incident was unprecedented, it paled next to the system-wide breakdown in 2015 on the North-South and East-West lines which lasted more than two hours and affected more than 413,000 commuters, for which it was fined a record $5.4 million.

These incidents, on top of a series of other major delays and safety oversights, for years damaged the reputation of the embattled rail operator.

Changes to leadership

Public criticism that followed these high-profile incidents were so scathing that the resignation of its group chief executive Desmond Kuek, a former defence chief, came as no surprise to employees.

Mr Kwek was replaced by Mr Neo Kian Hong, who had succeeded the former as defence chief. An unnamed SMRT staff told TODAY then that many employees were angered by Mr Kuek’s roping in of former military officials who were “equally newbies in running a rail company” to take on senior management positions.

A year after Mr Neo joined SMRT, he refuted Mr Kwek’s assertion that the rail company had “deep-seated cultural issues” that contributed to lapses within the organisation that led to the tunnel flooding incident. "I do not agree with the term (deep-seated cultural issues), because that's not my experience when I engage with the ground," Mr Neo told the media.

Likewise, the transport portfolio in Singapore was a hot seat, described by some as a “poisoned chalice”. A changeover takes place roughly every parliamentary term, with four different transport ministers holding the role since 2006.

The shock resignation of the previous transport minister, Mr Lui Tuck Yew, came after mounting criticism over rail disruptions. He announced he would not stand for re-election a month before the 2015 General Election. The role was taken over by Mr Khaw Boon Wan, who had been credited with turning the housing situation around during his four-year tenure as national development minister.

The comments and media reports on his resignation were “almost like obituaries and eulogies without the flowers," Mr Lui told the Straits Times. "In politics, you need a tender heart and a thick skin, not a hard heart and thin skin. I think my heart, my skin, like all my body parts, are fine."

Improving Singapore’s rail reliability

Mr Kuek left SMRT with a “bold target… only a handful” of the world’s metros could match: no more than one major delay a month by 2020.

That target was soon achieved. In 2018, there were nine MRT delays longer than 30 minutes, the first fall in six years since incidences of major delays doubled from eight to 16.

Of the nine delays that year, only five occurred on SMRT-run lines. The remaining four happened on the North-East and Downtown lines which are run by SBS Transit.

SOURCE: LTA

Following the spate of breakdowns, Mr Khaw in 2017 identified six major renewal programmes, set to be completed by 2024, that will improve the reliability of the ageing system. Mr Khaw has also set a reliability target of 1 million train-km before failure on average to be achieved by 2020 — that target was achieved in 2019.

So far, the wooden track sleepers, third rails and signalling system have been replaced. For the four years since the sleeper replacement works began in 2013, trains ran at half speed on certain sections of the track. And until the renewals are complete, commuters will continue to bear with shorter operating hours to allow engineers more time to work.

The remaining renewals of the country’s two oldest and most heavily used lines — the North-South and East-West MRT lines — will cost more than $2.5 billion by the time the project is completed by 2024. These renewals include the replacement of the power supply, track circuits and the inaugural batch of 66 trains which have been in service for more than three decades.

Progress of the six renewal programmes:

• Replace sleepers on tracks: Completed

• Replace third rail: Completed

• Replace signalling system: Completed

• Upgrade and renew power supply: To be completed by early 2020s

• Replace first-generation trains: To be completed around 2023

• Replace track circuits: To be completed around 2023

Who owns our trains?

The MRT system in Singapore runs on a licensing model, with rail operators paying a fee to run the line. The trains, as well as signalling and power systems, are owned by the Government, which also pays for the construction of rail lines and MRT stations.

Under the New Rail Financing Framework announced in 2008 and first implemented in 2011, the two rail operators SMRT Trains and SBS Transit are responsible only for the maintenance of operating assets. This is a change from the past, when the two rail operators were publicly listed on the stock exchange, and were in charge of acquiring, upgrading and replacing operating assets.

Now, all rail infrastructure and assets have become the LTA’s responsibility. In 2018, it bought the North-East line from SBS Transit, for a cool $30.8m, completing the ownership takeover of all rail assets in the country. SMRT, meanwhile, was delisted from the stock exchange and put under the sole ownership of Temasek.

The new model would relieve rail operators of heavy capital expenditure and focus on operations and maintenance, LTA said, adding that a shortened licence period of 15 years from the previous 30 to 40 years would also encourage competition.

The old ownership model was commonly regarded as an important reason for the frequent breakdown of trains, with the maiden batch of 66 trains — in operation since 1987 — still running today.

Operators had complained that under this old system, they could not keep up with the rising costs of running a rail line, while remaining profitable to shareholders. The old model, they said, was simply not financially sustainable.

“The New Rail Financing Framework (NRFF) will benefit commuters. It will allow LTA to add trains to respond more quickly to demand, and to replace and upgrade existing rail assets in a more timely manner. This should achieve the twin objectives of raising rail reliability and reducing crowdedness.”

- Transport Minister Khaw Boon Wan, in a statement on the New Rail Financing Framework. 15 July 2016

“It is a long overdue corrective to a major policy mistake. This move corrects the mistaken course taken by the government in the year 2000 when MRT operations were privatised, which created a tension between the private company’s impulse to maximise shareholder value from a quasi-monopolistic position, and the rightful goal of operating a public transport system that best serves the public.”

- Mr Dennis Tan, Non-Constituency Member of Parliament (NCMP), in a statement on behalf of the Workers’ Party. 20 July 2016

It was the country’s biggest shakeup of its train system’s financing structure and an acknowledgement that a public agency needed to step in to do what a private operator would rather delay — pumping money into timely upgrading and replacement of operating assets.

So far, LTA has awarded a $1.2 billion contract to replace the maiden 66 train and $573 million on upgrades to power and track systems, expecting to spend a total of about $4 billion to renew the rail network.

The end of a bus duopoly

Buses painted a striking green began plying the roads in 2016. Instead of bus company logos, they bore a simple “SG heart BUS” on their sides.

This marked the entrance of two foreign players, Tower Transit and Go-Ahead, dismantling the three-decade duopoly held by SBS Transit and SMRT Buses.

The redesign signified the transition to the bus contracting model and the gradual transfer of ownership of all public buses to the Government.

LTA said the overhaul of the public bus sector was to hold operators to higher service standards, including ensuring buses arrive at intervals of no more than 15 minutes during morning and evening peak hours. After all, buses had until recent years always performed poorer than MRTs in the annual commuter satisfaction surveys conducted by the PTC.

The increased competition to the industry made an immediate impact. Wages for bus drivers went up when Tower Transit raised its starting pay by 3.5 per cent to $1,930 and the other bus companies followed suit. Within a year, LTA said the 15-minute goal was reached and instances of bus bunching have also decreased.

Ninety-six more buses and 15 new services were added under the contracting model, on top of the 1,000 buses and 80 services that were added as part of the $1.1 billion five-year bus service enhancement programme introduced in 2012.

The uncertain fate of an LRT line built as an ‘afterthought’

Once seen as a new chapter in the development of the rapid-transit system, the fate of Bukit Panjang Light Rail Transit (LRT) — Singapore’s first LRT line — now hangs in the balance. Its transport operator SMRT had wanted it scrapped. The Government said it should be overhauled, rather than ditched.

In 2017, Mr Khaw derided the 20-year-old line, describing it as an “afterthought” built under “political pressure”. “No LRT is designed that way, in such a masochistic manner, where you force yourself up and down, twist and turn.”

A $344 million renewal project for the 14-station line was announced the following year, expected to be completed by 2024. But even as overhaul works are underway, SMRT and the Government are trying to reach a compromise over what to do with the ageing system dogged by failures and delays since the day of its launch.

As part of a major overhaul, SMRT is now considering suspending the Bukit Panjang LRT during off-peak hours and replacing the service with buses, Mr Khaw said in August last year.

WHY THE BUZZ

Set against the backdrop of expensive car ownership, and the Government’s aim for a car-lite society, people’s expectations for public transport are high. Bus priority lanes and more than $25 billion worth of new rail lines are being built by the Government to achieve its vision of “20-minute towns and 45-minute cities”.

But the spectre of breakdowns will always hang over the Transport ministry. There is a political dimension to these breakdowns, as unreliable trains harm the government’s claims to performance legitimacy and give fodder to critics of the government.

Such has been the fallout of breakdowns that key leadership positions in transport have become seen as a poisoned chalice, in particular after the resignations of Desmond Kuek as SMRT CEO, and former Transport Minister Lui Tuck Yew from politics.

Transport factors highly into cost of living concerns, accounting for the third-largest share of monthly household expenditure. However, average spending has fallen on public transport, from $96 in 2013 on bus and rail fares to $90 in 2017 and 2018, according to the Department of Statistics.

Households today spend on average 1.7 per cent of their income on public transport, a fall from 2.3 per cent in 2012. For low-income households, that equates to a fall to 2.5 per cent from 3.5 per cent.

This raises broader questions about Singapore’s public transport system, and who should be bearing the costs for keeping it running and in good condition. As a public service, should the government be bearing more of these costs, and can it be reconciled with profit-seeking operators?

As it is, the Government has said that it cannot continue to subsidise operators at the current rate. This means that as transport costs rise, commuters will have to chip in through higher fares.

Read Daryl's take on this here.