PUBLIC BUS SERVICES (Operation by Government)

Encik Abdul Aziz Karim: To ask the Minister for Communications to state the capacity and capability of the Government to operate the public bus services on its own or indirectly through a statutory corporation with suitable partners, taking into consideration that our international airlines, international shipping lines, port, telecommunication and other services and concerns are expertly managed.

Mr Yong Nyuk Lin: Mr Speaker, Sir, the legal authority for raising fares is in the Road Traffic Act (Chapter 22). The Road Traffic (Taxis and Buses -Maximum Rates of Hire) (Amendment) Order, 1974, published on 9th February in the Government Gazette Subsidiary Legislation Supplement No. 7 of 1974 issued under that Act, authorises the revision effective from 10th February.

The reasons why the revision was necessary were given at length in my Ministry's Statements of 3rd and 20th February. Replies by the Secretary of the Bus Services Reorganisation Committee to editorials, reports and letters in the Press also detailed the reasons. I am sure Members of the House would not wish to have them repeated here.

Whether the fare revision should have been allowed when the bus service does not meet commuter demands really begs the question. If the old bus fares, which had been in existence for almost three years from April 1971, had continued unchanged, and there had been no interim $25 monthly allowance per worker, and no increase in diesel fuels and other lubricants, spare parts and tyres, Singapore Bus Service Ltd. (SBS) would have had an expected profit in the year ending March this year of $133,000 but losses in the year ending March 1975 and 1976 of $29.7 million and $42.3 million respectively. In these circumstances, it would be difficult to expect the public bus service to improve. No one will throw good money after bad.

The projections of profit and loss, just quoted, came from professional management consultants, SGV-Goh (Pte) Ltd, who were commissioned by SBS. However, these projections were made in November last year and did not take into account additional cost factors arising later. These cost factors are: -

(a) the increasing fuel oil price which rose last December and has gone up again this month following doubling of the crude oil price in January - SBS's fuel bill will be up this month by 105 per cent as compared to pre-November 1973;

(b) the increasing wage bill which went up in February following implementation of an interim wage supplement of $25 per worker per month and will rise still further in July when the NWC makes its next recommendation - SBS's wage bill, including CPF contributions and related items, went up by 18 per cent as compared to pre-November 1973.

New projections which take account of these additional cost factors and an, annual growth in passenger trips of 4 per cent, as against 5.5 per cent by SGV-Goh (Pte) Ltd indicate a loss to SBS over the 15 months from April 1973 to June 1974 of $17.5 million, if the three-year old fare structure remained unchanged,.

That the old fares were uneconomic is corroborated by the poor response to the Supplementary Public Transport Service (SPTS). Up to 6th February, in the three weeks during which operators were invited to submit applications, few applications by bus owners and lorry owners were received. On 6th February an announcement was made that the fares chargeable under the SPTS, which were based on the public bus fares structure, would be revised in line with the revision of the public bus fares. Even after this increase, only 189 buses and 134 lorries have joined this supplementary transport scheme.

Is it fair and reasonable that the public should pay to financially sustain the bus company or pay for its capital infrastructure? The answer is that SBS started operations with a paid-up capital of $11 million and net assets of $30 million (i.e. net book value of buses less outstanding hire purchase payments). To get the bus services improved to fair standards to meet the increased passenger load would require net assets of some $90 million. No bus operator can be expected to sink in this capital if they cannot see any hope of even covering costs.

Subsidies to help meet operating costs would not result in the improvement of bus services. Capital investments of $65 million would have to be made. Adult bus commuters are already subsidising school children who travel on concessional 10-cent flat rate to any destination. Indirect subsidies through exemption of diesel fuel tax and other taxes, as has been suggested, would not have any significant effect. Tax on diesel fuel accounts for only 0.8 per cent of SBS's total operating costs. Other taxes and licence fees make up 10.7 per cent. Together, they only account for 11.5 per cent of the total operating costs. These go towards general revenue to pay for making roads and maintaining them, bus bays and shelters, bus termini, etc. Wear and tear by buses are very heavy on surfaces of roads and termini. For example, after the Singapore Traction Company (STC) packed up in December 1971, the former three bus companies, now known as SBS, were allowed to temporarily garage the SBS buses at the National Stadium car park during the night. When the bus companies stopped garaging their buses there months later, it cost them $123,000 to make up and restore the surface of the car park worn out by the buses.

Sir, that completes my answer to Question 3. I now proceed to answer Question 4.

Mr Speaker, Sir, I have stated that there will be no advantage in the Government taking over the public bus services now operated by Singapore Bus Service Ltd (SBS) which has been in operation for only four months. SBS has shown itself willing to meet the targets and take such measures as my Ministry and the Bus Services Reorganisation Committee (BSRC) have asked. It should be given time to settle down, tighten management, improve maintenance and increase bus services.

In answer to the question as posed by the hon. Member, may I point out that Singapore Airlines (SIA) is not a new airline but has developed its management and organisation over one quarter of a century. The Government has been associated directly with its management in the course of this development for many years. Our port has a history of more than one century; in fact, 150 years. Telecommunications in. Singapore goes back into the last century. The Government has been involved in the management of these for many years, and built up on inherited organisations like the Oriental Telephone and Electric Company, Cable and Wireless Ltd, etc. In the case of shipping, there is local talent with the knowledge and experience to operate a national shipping line. Shipping is as old as the history of Singapore. There are numerous shipping companies in Singapore where experience in operating a major international shipping line can be obtained.

Unfortunately the position with the public bus services is different. We now have only one company, namely SBS, operating the public bus services with a fleet of 2,000 buses. All the local talent with experience in operating public bus services is in SBS. Prior to November 1973, there were three bus companies. None of them operated more than 1,000 buses. Less than three years before that, there were 11 companies, including the former Singapore Traction Company (STC). Then, none of them was operating more than 170 buses, except for the STC which was operating about 500 buses.

If Government were to take over the public bus operations, it would have to use the present management of SBS. To do this effectively would be a problem with the existing manpower resources of the Government. No government officer has had experience of operating a bus company. The nearest to such a task is the officer in charge of the Singapore Armed Forces, Transport Division, and that took a great deal of effort to build up from scratch.

The Government is conscious of the responsibility to ensure that SBS, the sole operator of public bus services, must be properly managed and must provide adequate essential service. But it cannot be expected to do this when it is operating at a loss. Even before SBS began operations on 1st November, 1973, I established the Bus Services Reorganisation Committee (BSRC). The BSRC, under my personal supervision, receives daily returns from SBS on the bus operations - how many buses were operating for the day, how many buses broke down, how many are in the workshop, how much fare was collected, etc. In addition, monthly reports on the bus operations, as well as monthly financial statements, are submitted by SBS. As from November last year, SBS is also required to send in certified quarterly financial reports. All these returns and reports are analysed and studied. Officers of the Registry of Vehicles cross check by making personal visits to the depots from time to time.

The purpose of all this is not only to monitor the progress of SBS and set the targets for its management to attain, but also to ensure that the revenue it collects is properly spent. There is a limit to the return on its net assets in buses, which shareholders in SBS may earn. Supervision and scrutiny are necessary to ensure that revenue and expenditure are properly accounted for, and that there is no wasteful expenditure, no corruption, no dishonesty. The Government cannot allow the management of the bus company any fare revisions that would go into wasteful or unjustified expenditure through inefficient management or corrupt practices. The management of SBS would be improved and made organisationally efficient. The BSRC and I intend to see that it will stay so.

Meantime, this supervision is giving a team of Government officers experience in detecting flaws in the running of a public bus operation of the scale of SBS. This body of supervisory men will develop the expertise to help ensure that public transport will be run efficiently, not at a loss, nor allowed to exploit the public.

For the next three years, the job is for the SBS to get at least 1,000 new buses on the roads, repair the 400 buses that are now immobilised, keep all under regular maintenance, improve driving standards for safety of passengers and others on the roads, more courtesy and consideration by conductors. The best way to achieve this is through the BSRC. Nationalisation will create more problems than we have the capacity at present to solve.

Mr Ivan Baptist (Potong Pasir): Mr Speaker, Sir, my supplementary question is connected with Question No. 2, and I did not have the opportunity to raise it then. Does the Minister know that there is some talk to the effect that the only thing wrong with the public transport system in Singapore is that one exists? I disagree, and in disagreeing I would humbly ask the Minister whether he has plans to improve the public transport system by introducing some commuter-discipline. At the present moment, at bus stops it is the law of the jungle, and not first come first served.

Mr Yong Nyuk Lin: Sir, I fully agree with the Member that there should be general improvement all round - buses, bus commuters and the public.

Encik Abdul Aziz: Mr Speaker, Sir, must we carry the SBS as a passenger?

Mr Yong Nyuk Lin: Sir, the name SBS means that they carry passengers.

The following Questions stood on the Order Paper --

Mr J. F. Conceicao: To ask the Minister for Health and Home Affairs how action is taken against vehicles displaying non-Singapore licence plates which are found breaking traffic regulations; and what course of action is taken when a report from a member of the public is received against such vehicles.

Mr J. F. Conceicao: To ask the Minister for Finance if he will explain the principal functions and highlight the main activities and achievements, in the year 1973, of the Weights and Measures Unit of his Ministry.

Mr J. F. Conceicao: To ask the Minister for Finance what sort of joint training schemes were conducted through joint industrial training centres in 1973; what further activities are being planned; how responsibility for those schemes is distributed between the Government and the private sector; if there is any intention to modify the basis of co-operation; and in what ways his Ministry supports other forms of industrial training.

3.29 p.m.

Mr Speaker: Mr Conceicao, I am afraid there is no time for you to ask your three Questions. Would you agree to have written answers instead, or would you prefer to postpone them to another day?

Mr J. F. Conceicao (Katong): Sir, I have been advised by the other Members to have the Questions answered on another day.