SINGAPORE BUS SERVICE LIMITED (Measures to improve service)

Encik Abdul Aziz Karim asked the Minister for Communications if the Government (a) will consider the withdrawal of the licence granted to the Singapore Bus Service (Private) Limited, in the public interest; (b) will take over the rights and interests of the Singapore Bus Service (Private) Limited; (c) will take steps to establish a statutory corporation to operate the bus services and, if necessary, the other public transportation systems, in which the Government should hold a reasonable proportion of shares directly or indirectly; (d) will carry out a proper valuation of the assets of the Singapore Bus Service (Private) Limited and allocate to the owners an appropriate number of shares in relation to the valued assets at the material time of share allocation and such shares shall be disposed to the Government if required; (e) will invite the participation of other interested parties and groups as co-operative members; (f) will take all possible measures to make the operation viable and efficient; (g) will ensure that the statutory corporation works in the public interest; and (h) will take all measures, including the provision of funds, to develop an efficient mass rapid transit system in the next one to two decades to supplement the bus system.

The Minister for Communications (Mr Yong Nyuk Lin): Mr Speaker, Sir, before I begin my answer, may I first preface my remarks by seeking your indulgence and that of hon. Members of the House if I provide an answer that is rather long, in view of the fact that the Question for Oral Answer tabled by the Member for Kallang is rather long, probably the longest on record, covering one-third of the first page of the Order Paper. And in order to do justice to a subject of public interest, the answer would also have to be reasonably long.

Mr Speaker, Sir, let me first assure the hon. Member for Kallang that if it is in the public interest to do so, I would have no hesitation in withdrawing the licence of Singapore Bus Service Ltd (SBS). But I do not believe it would be in the public interest to do so now. Other measures would serve the public interest better.

SBS began operations about four months ago. It took over the assets and services of the former three bus companies - Amalgamated Bus Co., Associated Bus Services and United Bus Co. With the assets also came many problems. For instance, it inherited a bus fleet, on paper, of 2,000 buses of which over 400 were broken down and laid-up. This fleet also comprised no less than 17 different makes. Many of the buses had also been repaired, in the past, using non-standard parts or parts cannibalised, or "transplanted" as the Member worded it, from other buses. In the past, there was much duplication of routes and services because of the depot locations of the three former bus companies and to allow each of the three companies a fair share of the profitable and unprofitable routes.

With the starting up of operations by SBS and to ensure the efficient management and operation of the sole public bus service, a tripartite committee was formed. This is the Bus Services Reorganisation Committee (BSRC) made up of officials from the Ministry of Communications and Registry of Vehicles, the Managing Director of SBS and the General Secretary of SILO, which represents the bus workers. The BSRC meets weekly, monitoring the operations of SBS and setting the targets for the bus management to attain.

The principal immediate tasks of BSRC are: -

(a) To get the 400 buses now not in service repaired and put back on the road, as soon as possible. SBS has contracted this work to a private firm of motor repairers to be completed originally by April at an estimated cost of $1.2 million, excluding replacement of major components, of which SBS has on order 227 new engines, gear boxes and rear axles costing another $2 million. Owing to the number of different makes operated, a comprehensive range of spare parts for all the laid-up buses is not available. Only 45 of the 400 laid-up buses were repaired up to 4th March. Now it does not appear likely that the balance of the 400 buses will be repaired until much later than April. The situation should improve when the major components on order are delivered. To speed up the work, SBS will undertake some of the repair work itself with the new personnel it would be employing and temporary repair facilities that are now being provided at the existing depots. In addition, SBS has invited other private motor repairers to contract for some of the repair work.

(b) To improve the standard of maintenance of the buses. This involves setting up a Central Depot and Workshop on a 17-acre site at Braddell Road, which has been leased from the Housing and Development Board for 15 years. This Central Depot and Workshop is to be properly staffed and equipped. Building plans are now being put up by SBS' architects, assisted by workshop consultants from major motor assemblers, repairers and suppliers. Under-operation of buses, through poor standards of maintenance, has been a serious defect. The following financial penalties were imposed on the three former bus companies over 1972 and 1973, before the formation of SBS, for under-operation of services: - ABC $ 46,000 ABS $ 73,800 UBC $ 126,350 --------- $ 246,150 ========= Although SBS has provided a performance bond of $500,000, it is not intended to exact any financial penalty for under-operation of buses until after sufficient time has elapsed for all the 400 laid-up buses to be repaired and put back on the road.

(c) To require SBS to undertake a faster replacement programme of old buses. This would involve the purchase of a minimum of 1,000 new buses over the next three years, 400 of which would be replacements for old buses over 12 years old, and 600 would be as additions to the fleet. This would cost an estimated $65 million, including interest charges. Between November last year and end of February this year, SBS purchased and put into operation a total of 152 new buses costing $8.4 million, which increased the carrying capacity of its fleet by 11,100 passengers.

The measures required of SBS to improve the public bus service involve investment of large sums of money. SBS started operations on 1st November last year, with a paid-up capital of $11 million and net assets (i.e, net book value of buses less hire purchase obligations) of $30 million. The net asset value was determined by a professional firm of management consultants, SGV-Goh Pte Ltd, in September last year in a preliminary valuation for purposes of initial allotment of shares in SBS to its three component companies - ABC, ABS and UBC. The consultants were commissioned by the three bus companies for this purpose.

A fair standard of service would require assets of some $90 million. No one would invest such capital if there is a certainty of losses and no returns. Had the old bus fares, in existence since April 1971, not been revised from 10th February, SBS would have headed for substantial losses. It would have ended up like the Singapore Traction Company.

Several conditions have to be satisfied by SBS in consequence of the bus fare revision being allowed: -

(a) To provide better terms and conditions of service for its 9,000 workers by implementing, in full, recommendations made by the National Wages Council (NWC), from time to time. Also, the provision of adequate rest rooms, canteens and toilet facilities at all main bus terminals for its workers, which are practically non-existent at present.

(b) As SBS is operating an essential public, service, its profits, if any, should not be unrestricted and at the expense of lowering the standard of service. Accordingly, its annual pre-tax profits for the first three years would be limited to a maximum of 8 per cent of its net assets (i.e, net book value of buses less hire purchase obligations) as certified by their auditors.

(c) Should annual pre-tax profits exceed the limit of 8 per cent, the surplus would be ploughed back for the purchase of yet more new buses, i.e. SBS would have to embark on an even faster rate of replacement than that mentioned earlier.

The Bus Services Licensing Authority Act was amended effective as from September last year to provide for an Inspector to be appointed to inspect the affairs of SBS, if necessary. The report of the Inspector could be published if it is in the public interest to do so. I would not hesitate to use these powers if the management of SBS is found to be abusing their positions and sacrificing the public interest. So far, the need has not arisen. I am monitoring developments closely in conjunction with the BSRC.

Mr Speaker, Sir, it is not the intention to withdraw the licence of SBS, establish a statutory corporation, and take over its functions. I am not sure what the hon. Member refers to when he mentions "other public transportation systems". If he is referring to school buses, taxis, etc, may I say that there are 1,860 registered school buses, 350 of which are under the NTUC Comfort Scheme. There are 5,004 taxis, 1,225' of which are in. NTUC Comfort. And up to 9th March, a total of 1,135 Adult Worker Contract (AWC) permits were issued to 959 school buses and 176 to goods and other vehicles to provide transport for workers. Public Transport licences issued up to 9th March to vehicles participating in Scheme B of the Supplementary Public Transport Service, number 290, of which 267 were for school buses and the remainder for goods and other vehicles.

There is no need for the Government to carry out a valuation of SBS assets. A preliminary valuation has been carried out by the firm of professional management consultants for initial allocation of shares, as stated earlier. A full and final valuation will be completed by this firm. Any reputable firm of consultants that produces a false valuation can be prosecuted, besides loss of operating privileges.

Mr Speaker, Sir, that accounts for part (d) of the hon. Member's Question. Parts (e), (f) and (g) would require no answer, since I have replied to part (c) in the negative. The Government's intention is to get SBS to institutionalise and strengthen its management, and not to set up a corporation to take over the public bus operations or to invite others to participate in this corporation. There is no magic in nationalisation of the bus services. What must be done to improve bus services is to enable a reasonable return on its net assets, professional management not based on family or clan relationships, proper servicing and maintenance of buses, fair wages and facilities for bus workers in return for safe driving and courteous service.

Part (h) of the hon. Member's Question about development of an efficient mass rapid transit system has been answered by me in this House on 4th March in response to a similar question by the hon. Member for Kim Keat. The position is unchanged. I may add that action to improve the public bus service cannot be successful in isolation At the same time, we have to resolve the increasing traffic congestion on our roads. Greater priority has to be given to the needs of public transport, to pedestrians and to preservation and enhancement of our environment. The problem we face is one faced by all big cities with high-rise buildings. Since the redevelopment of the Central Business District (CBD), the number of people going to work in the CBD has increased more than five times, but the roads have expanded less than two times to cater for the cars, taxis and buses that take people to work at peak hours. A recent count by the Road Transport Working Group showed that about 30,000 cars go into the CBD between 7.30 am, and 9.30 a.m. - just two hours - and of these, one half are motorists commuting to work carrying an average of 1.3 passengers per car.

A Road Transport Action Committee (RTAC) comprising the Permanent Secretaries of the Ministries of National Development, Communications, Home Affairs and Finance (Budget and Development Divisions) was set up in November last year. This Committee is charged with the two-fold task of: -

(a) according high priority to the public bus service; and

(b) adopting various traffic management measures to reduce the present congestion on our streets.

The following traffic management schemes have been introduced: -

(a) As from January this year, Government and statutory boards have started staggered working hours for their staff, for a trial period of six months. So far, the response from the private sector to appeals by the Finance Ministry to also adopt staggered working hours has been disappointing. The private sector should respond more effectively to help spread peak period traffic and so ease congestion.

(b) The insurance industry has creditably responded to the call from Government to save fuel during the present world oil crises. Car owners participating in car pools would not have their insurance policies invalidated under the present terms of these motor insurance policies. Car pooling will save fuel. More important, it will also ease traffic congestion. In this respect, Mr Speaker, Sir, the Principal of the Methodist Girls' School in Sophia Road is to be congratulated. It was reported in the press recently that from 1,000 cars previously used to carry pupils to and from her school daily, she has successfully, through the enthusiastic support of parents, reduced this number to 300 by promoting a car pooling scheme. If one school can reduce the number of cars by 700, or more than two-thirds, 10 schools could reduce the number of private cars on the roads by 7,000 daily through similar schemes. So if employers, trade unions and others in the private sector followed the example of MGS, there would be an immediate easing of traffic congestion during peak periods.

(c) A widespread system of reserved bus lanes which began with Robinson Road and parts of Market and Cecil Streets on 6th February. Those along Stamford and Bras Basah Roads came into operation from 22nd February, and the next would be along Orchard Road, Penang Road, Somerset Road and Orchard Boulevard as from tomorrow, 15th March. By the end of June, more than 20 busy streets in the Central Business District would have reserved bus lanes to accord public buses the priority they deserve in order to move expeditiously and unhindered by other traffic in limited road space. We are also providing more and wider pavements for pedestrians and kerbside bus stands for bus commuters, wherever possible.

(d) Increasing restraints on private cars. As reserved bus lanes come into operation, many existing kerbside parking lots will be abolished. In particular, restrictions would have to be imposed on private cars entering the Central Business District during peak hours. I have mentioned in my reply to the hon. Member for Kim Keat on 4th March that a plan is now being worked out for fringe parking of private cars going into the CBD and commuting in special buses into the CBD. The plan will be published for public discussion and all practical suggestions incorporated before implementation.

Finally, Sir, let me assure the hon. Member that measures are in hand to ensure an adequate public bus service, supplemented by other forms of public transport. Further measures are being studied to improve the peak hour congestion in the CBD. A World Bank mission, which was in Singapore recently in connection with the Mass Transit Study project, indicated considerable interest in the work of the Road Transport Action Committee and Bus Services Reorganisation Committee and gave assurance of favourable consideration by the Bank to loan financing of projects undertaken by these two Committees.

Encik Abdul Aziz Karim (Kallang): Mr Speaker, Sir, first I would like to clarify that the reference to "other public transportation systems" in my Question includes only MRT, and excludes goods vehicles, taxis and school buses. I have got several supplementary questions, and I hope I will be given a good deal of time to do them justice, just as much time as the hon. Minister for Communications.

Mr Speaker: How many supplementary questions does the Member have?

Encik Abdul Aziz: I have about 10 supplementary questions. There are still other courses left open for the Government to take: first, to maintain the interest of private monopoly and, second, to take over control of the operation of the bus services. Will the Minister for Communications now confirm if any assurance or guarantee had been given to the Singapore Bus Service Limited that it would not be taken over under any circumstances?

Mr Yong Nyuk Lin: The answer is a simple no.

Encik Abdul Aziz: Will the Minister say whether the Government will consider taking over the rights and interests of the Singapore Bus Service Limited when the services become worse, or when the services become better? Is the Government stalling for time? And, if so, will a target date be fixed?

Mr Yong Nyuk Lin: Sir, it seems that the hon. Member has other questions too. Maybe I should hear them before I give him the answers.

Encik Abdul Aziz: I will then proceed with all my questions. Is profitability of an undertaking a crucial point in determining the Government's attitude? Or is public interest of no concern?

Before the Minister answers my next set of questions, may I refer him to the statement of the Minister for Finance on 4th March, 1974, in Parliament, and I quote [col. 76]:

`There have been suggestions that the Government nationalise the bus companies and subsidise the commuter.' I have only proposed the nationalisation of the Singapore Bus Service Limited. I quote further from the same speech:

`But what happens when the Government nationalises a company which has not yet got institutionalised management, and corruption on a scale rampant in the former Singapore Traction Company inevitably results? Let us first get management and services improved through tighter supervision from the Ministry of Communications.'

Now comes my set of questions. Can it be implied that it is not against the philosophy of the Government to nationalise the SBS? Can it be implied also that there is a nagging fear that the present SBS management is corrupt, and will it be more corrupt if the Government were to take over, lock, stock and barrel? Will it bring ruination to the bus service? If the Port workers were to behave in this way, it would be treason. Therefore, will the Government take such behaviour on the part of the management of SBS as treason?

Much productivity and leisure hours of the bus travelling public is wasted. Will the Minister for Communications stop nursing and molly-coddling the SBS? Does he think it imperative that the views of the bus travelling public be sought if an efficient and cheap bus service is to be operated by the State?

My next question is, if the Government is not willing to take over the rights and interests of the SBS, may I know whether the Government is willing to establish a corporation, wholly or partly owned by the Government, to compete with the SBS?

What is the logical explanation for the Government's decision to spend millions of dollars on the cable car system, which is not a daily necessity, or on the construction of golf courses which are beyond the means of the ordinary working people, when it is not prepared to finance an essential service like the bus service, although it is able to do so? This is beyond reason. We have a lot of reserves.

Does the Minister believe that the bus service will be ruined to a point where it would be wiser for the Government to leave the management of the bus company to the owners?

Does the Minister want us to believe that the Government has no financial resources? Where are our reserves? Since the Government was prepared to go to the extent of lending its assistance in getting local as well as international banks and finance companies, and also the Development Bank of Singapore, to bolster the SBS, why does the Government not consider doing so for a statutory corporation? Does the Minister for Communications consider that the SBS, without even a Board of Directors and ruled by personal and clan relationship, has far greater expertise than the Government can command?

I have one last question on the MRT. If MRT is feasible, will it be in the hands of a private monopoly?

Mr Speaker: All these supplementary questions asked by the Member for Kallang are incorporated in Oral Questions 3 and 4.

Encik Abdul Aziz: I agree I have given notice of Questions 3 and 4. And I have other supplementary questions on those two Questions.

Mr Speaker: But, they have not been answered yet.

Encik Abdul Aziz: I think the Minister for Communications has referred to them. If I am permitted, I will now ask supplementary questions on these Questions which I have already given notice.

Mr Yong Nyuk Lin: Mr Speaker, Sir, the hon. Member is anticipating his Questions 3 and 4. He seems to be very impatient to get on with them. With your permission, Sir, we may as well get on with Questions 3 and 4, and the Member can ask his supplementary questions ad infinitum.

Encik Abdul Aziz: All right. My next supplementary question. We are always reminded that the SBS was formed only on 1st November, 1973. The bus services had been bad before SBS was formed. They are now worse. If something is to be done to improve it, it will at the best fall into a bad state again. How long will it take to improve the services to the satisfaction of the public, I do not know.

Mr Speaker: What is your supplementary question?

Encik Abdul Aziz: Why should the operating losses of its predecessor-companies be of any material importance to the public?

My next supplementary question is this. If the running of public transport service is rather bad business and therefore in order to make good profit the travelling public can only expect poor service, as is the case with the SBS where both service and the supposed losses are bad, will the Minister for Communications be able to say whether the operating losses are true and correct? Before the Minister answers the question, it may interest him to refer to the Government's White Paper on the Reorganisation of the Motor Transport Service of Singapore, (Paper Cmd. 21 of 1970) paragraph 3.7, wherein it is stated:

`The management of some bus companies have noted with delight [the next few words are not so important] that after replacing their old buses (some as old as over. 20 years) with new buses their profits went up appreciably. What is the name of the game, when we are now told that they are operating at a loss?

The next question is, why is the Minister so concerned with the existence of a private monopoly by nursing the SBS? Why is he most prepared to allow the present state of affairs to continue and to tilt the balance so that the register shows profits? Why prop up an inefficient organisation?

Mr Yong Nyuk Lin: Mr Speaker, Sir, it looks as if I have to answer Questions 3 and 4 at the same time, as it should then cover all the points that the Member has raised, whether they be on Questions 2, 3, or 4.

Mr Speaker: Yes.

The following Questions stood on the Order Paper -