PUBLIC TRANSPORT COUNCIL BILL

Order for Second Reading read.

The Minister for Communications and Information (Dr Yeo Ning Hong): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

At present, there is a statutory board called the Bus Services Licensing Authority (BSLA). Its primary function is to license bus routes. It comprises six members, with representaives from different Government departments involved with land transport, such as PWD, HDB and the ROV. BSLA has worked well, as evidenced by the vast network of bus routes serving practically every part of Singapore.

Since the formation of the Government Parliamentary Committee (GPC) early this year, Members of the GPC for Communications and Information had various briefings and discussions with Ministry officials. They have acquired a full understanding of the workings of my Ministry and the various statutory boards under the Ministry's charge.

During the budget debate in March this year, the Chairman of the GPC pointed out that there was no representative from grassroots organizations such as CASE, CCCs and RCs in the decision process for the determination of routes. He further suggested that such representation be considered as they would serve as useful watchdogs on behalf of the public in matters of fares and bus routes, matters that affect commuters. Furthermore, he highlighted examples of transport authorities in other countries where different transport operators participated, in order to provide a well-integrated public transport system.

In my reply, I indicated that my Ministry would look into the GPC's suggestion and if there are advantages in having such a Committee with wider representation, my Ministry would certainly consider it. I am now happy to inform the House that, after careful study, my Ministry has accepted the GPC's recommendation. This Public Transport Council Bill seeks to bring about greater public representation in the consideration of land transport matters such as fares and routes.

This Bill will enable the appointment of 13 members in the PTC, an increase from the six in BSLA, and to enable wide representation from amongst grassroots organizations such as CASE, the CCCs and RCs. We have also incorporated the major operators of land transport systems in Singapore, namely, SBS, TIBS, NTUC Comfort and the licensed operators of the MRT System into the PTC, so that the PTC will have first-hand knowledge of the industry that it seeks to supervise. Sir, this practice of including the operators is in line with the practice in many other statutory boards such as PSA, where major operators such as shipping companies and shipowners are invited to serve on the board. Of course, as is common administrative practice, such members will not vote on matters in which they have or are deemed to have an interest.

The PTC will continue the work of BSLA, namely, to receive and consider applications for the issue of bus service licences for bus routes. This is spelt out in Part IV of the Bill which is taken from the Bus Services Licensing Authority Act. In addition, the PTC will also consider applications for approval of bus, taxi and MRT fares. That way, the PTC can protect the public interest over fares, and ensure that commuters get value for their money.

Sir, let me now deal briefly with the details of the Bill. Part II of the Bill, together with the First Schedule, deals with the establishment, functions, powers and administration of the Council.

Part III, together with the Second Schedule, deals with the Financial Provisions and the accounting procedures for the Council. The Council will operate as a non-profit making statutory body with a supporting staff, and will be funded by a Government grant.

Part IV, taken from the Bus Services Licensing Authority Act, which will be repealed in Part VI of the Bill, deals with the licensing of bus services. In granting bus licences, the PTC will consider, inter alia, the applicant's ability to maintain an adequate, safe, suitable and efficient service. To ensure that the bus companies which provide an essential service to the public are properly managed, the Bill provides for the Board of Directors of bus companies to consist only of persons approved by the Council.

Part V empowers the Council to approve bus, taxi and MRT fares. The setting of fares is essentially a commercial decision, best decided by market forces between the commuters and the operators, much as the prices of goods in a supermarket or department store are. The travelling public naturally wants fares to be as low as possible. Transport operators however have to remain financially viable. If the revenue collected does not meet cost, then service must inevitably deteriorate to the detriment of the commuters. Hence it is important for the Council in approving fares to take into account the need for public interest to be safeguarded as well as the need for the operators to remain financially viable so that we will continue to have a safe, suitable, adequate and efficient land transport system in Singapore.

Indeed, the best guarantee that fares will be kept low is for operators to be as efficient and productive as possible, and to minimize wasteful duplication of services.

The final part, Part VI, deals with miscellaneous provisions, including the power for the Council to make regulations for its proper functioning and the repeal of the Bus Services Licensing Act.

Sir, I beg to move.

Question proposed.

Dr Arthur Beng Kian Lam (Fengshan): Mr Deputy Speaker, Sir, I rise to speak on behalf of the Government Parliamentary Committee for Communications and Information.

Sir, the establishment of the Public Transport Council is a step in the right direction. It provides an avenue where the public is represented in a decision-making process regarding issues of public transport. In this forum, operators and representatives from the public can discuss important public transport issues. This concept is new in Singapore and for it to succeed, the constitution, the functions and the powers of the Council are important and have to be very clearly spelt out.

The Chairman

Sir, first, I refer to the constitution of the Council. Under the First Schedule, it will be noted that the chief executives of the four main transport operators will be members of the Council together with not more than nine other members to be appointed by the Minister. How effective will the Council be? The Council can only be as effective as the members are. Who is the leader of this team? The Chairman, of course. The Chairman will be appointed by the Minister. It is our hope that the Chairman will be an eminent community leader, totally apart from the operators. He should also not be an official from the Ministry of Communications and Information. This is suggested as it is important to ensure that an independent member of the public chairs the PTC. An independent chairman is important because the major transport operators will already be represented on the Council by their chief executives. These CEOs are knowledgeable people and will come to the Council backed by computer printouts of facts and figures to support their case. They will also have the benefit of consultant's reports, case simulations, etc. The other nine appointed members will not have this privilege except perhaps if they are officials from the Ministry of Communications and Information. Thus the role of the Chairman is crucial to the success of the PTC. An independent, unbiased but knowledgeable Chairman is essential.

I next turn to the operators. As has been mentioned, the chief executives of the four main transport operators will be on the Council. However, one should be mindful of the interest of the smaller operators. For example, in buses, there are Scheme B buses and other operators to consider. In taxis, there are the yellow-top taxis and others to consider. It is our fervent hope that the small operators' interest will be taken seriously into account by the PTC in all its deliberations. This is very important as many, for example, a yellow-top taxi owner may be the sole breadwinner of the family. Today, many Scheme B operators are already expressing apprehension regarding their fate. A reassurance from the Minister would be most welcome.

Functions of the Council

A large portion of the PTC Bill concerns the licensing of bus services. And with the enactment of this Bill, the Bus Services Licensing Authority Act will be repealed. The BSLA Act, as has been mentioned by the Minister, has served its function well in the past. The PTC Bill, whilst encompassing BSLA Act, has two added functions that never existed under the BSLA Act. These are, firstly, to integrate routes and fares, and secondly, to provide for public participation in a decision-making process with regard to public transport.

With regard to the functions of the Council, Part II, clause 4 (c) reads:

'to regulate bus routes and bus, taxi and Mass Rapid Transit System fares;'

It is the view of the GPC and the resource panel that integration should be specifically spelt out as a function even though one may read this as implied in this section.

Similarly under the First Schedule, public participation is implied through the appointment of "not more than 9 other persons" by the Minister to sit on the Council. The GPC is again of the view that, as public participation is a cardinal principle in this Bill, the issue of public participation should also be included as a function of the Council. This would make it clear to the members of the PTC in no uncertain terms that integration and public participation are functions as important as the others mentioned in the Bill as it now stands.

Powers of the Council

The PTC has been given wide powers under Part II Section 5 to effectively discharge its function. Under Section 5(a) the PTC may "approve new bus routes and amend or delete existing bus routes". Having been given this power, one has to ask whether it would be prudent to prescribe certain criteria so that the PTC can be guided and the public can be kept informed. One also has to ask whether this applies to the MRT. We all understand that there is severe restriction to change of rail routes, but one cannot discount this possibility in the future. Does the PTC have similar powers over the MRT?

Similarly under the Functions of the PTC, Section 4(a) states "The functions of the Council are to receive and consider applications for the issue of bus service licences." Should not the PTC have the power or at least have a say regarding the licensing of the MRT operator rather than leaving this to the sole discretion of the MRTC?

In Part I Section 2 of the Act, the definition of a "public service vehicle" also excludes the MRT. I quote the definition of a "public service vehicle" means a vehicle used or kept for use for the carriage of passengers for hire or reward, other than a vehicle constructed for use on fixed rails or specially prepared ways."

Should this definition not be reviewed to include the MRT? I am sure that we all agree that the MRT train is a public service vehicle.

Section 5(b) refers to the Council appointing "an agent to do anything which the Council may do". Here I would like to ask the Minister as to his thinking on this issue. The GPC has been informed that in the first instance the Registry of Vehicles will assist the PTC in carrying out its functions. The GPC agrees that this is a logical first step. However, it is our opinion that in the long-term the PTC and the ROV must remain as separate entities if the purpose is indeed to allow the PTC to function as an autonomous and objective unit. To this end, the GPC considers that the PTC should look into setting up its own resource unit and to capture the expertise of the MRTC/Bus Integration Committees before it is disbanded.

Sir, I next turn to the question of fares. I have dealt earlier with the question of integration of fares being a function of the PTC, and I will not labour this point any further. I refer now to Part V Section 21, and I quote:

"In considering any application for approval of bus, taxi or Mass Rapid Transit System rate of hire or fare, the Council shall take into account -

(a) the need for the applicants to remain financially viable; and

(b) the need for public interest to be safeguarded".

Section 21 requires further clarification. Does this section imply a guarantee of profit for operators? If so, at whose expense? It must certainly be at the public's expense. Similarly, the safeguarding of public interest, if carried out to the extreme, could result in the operator making a loss and to a deterioration in the standard of services provided by the operators. I seek the Minister's clarification on this section.

Sir, several members of the public have asked me the question whether members of the GPC would be sitting on the Public Transport Council. We have discussed this matter in the GPC with our resource panel and with the Ministry of Communications and Information. The unanimous view is that the GPC should continue to maintain its independence and objectivity. No member of the GPC will thus sit on the PTC.

In conclusion, Sir, we are aware of the great challenge to the PTC. We wish them every success and pledge our support and cooperation to them. Although I have highlighted only the areas of concern, or the parts of the Bill which we seek clarification, I wish to state that we in principle give our wholehearted support to this Bill. We realize that the Ministry is working under considerable time and other constraints and congratulate them on this effort. As the PTC moves into action, I am sure that amendments to the Bill will be made as and when required, and I hope that our comments will not be forgotten but will be given serious consideration.

Dr Augustine Tan: Mr Deputy Speaker, Sir, I rise to support this Bill as moved by the Minister.

I think this Public Transport Council is a desirable vehicle to rationalize bus fares, taxi fares and MRT fares. However, like the Chairman of the GPC who has just spoken, I question whether the functions of this Council are comprehensive enough because there is no mention there and there is no explicit mention of licensing of taxis, neither is there mention of any power over the frequency of MRT services. The way the functions are listed in clause 4 of this Act appears to me that the bus system is used as a residual system, in other words, to take care of any excess or any necessary increase in supply of services after the taxis and MRTs have performed their services in accordance with the fares. I think for the Council to be really effective, it has got to take an overview, a comprehensive view, of not only the bus routes but the number of taxis which are on the road and the frequency of MRT services.

The other important factor that should not be overlooked is that there is no way one can guarantee the efficiency of the MRT or the bus system. At least for the taxi operators there is sufficient competition to assure that the best and the most efficient services are forthcoming. But for bus operators and the MRT, one can only rely on the management expertise. I think historical experience here in Singapore bears this out - that until the Government sent in the team of officials into the Singapore Bus Services Company, the bus services were being provided very inefficiently. I am afraid there may come a time where in order to guarantee viability to the bus services and to the MRT, fares would have to be increased continually. So there should be some mechanism to ensure that the MRT and the bus companies provide the best management possible, that they run their services as efficiently as possible. But this Bill does not provide for any such safeguard. In other words, if the bus companies were to present a proposal for an increase in fares on the ground that otherwise the bus services will not be viable, how would this Public Transport Council respond? It would simply have to look at the book and say, "Yes, we agree and we increase the bus fares." But if the operators are hiding some money behind the scene, siphoning off money, and in a bus service with a lot of cash flow, it is easy to siphon off the cash that flows into the coffers of the bus companies without anybody noticing. So without good, efficient management, I do not see how we can have an efficient system at least cost to the public.

Dr Yeo Ning Hong: Mr Deputy Speaker, Sir, I want to thank the two Members for speaking on the Bill.

Sir, the Member for Fengshan who spoke on behalf of the Government Parliamentary Committee has raised a number of points. Sir, the Member has rightly pointed out the importance of the role of the Chairman in a statutory board. Indeed the Chairman is the key figure in any statutory board and the appointment of such a Chairman has always been undertaken by the Government with great care, simply because statutory boards have statutory powers and these powers have got to be exercised responsibly by the individual and his Committee.

Sir, in looking for a Chairman of a statutory board, the Government looks for a person with integrity, a person with proven ability and experience, a person preferably with a record of public service, having demonstrated in other statutory boards as a member, his capability and dedication to the public service. And of course, if at all possible, the Chairman of any statutory board should have some experience in the particular industry that he will supervise. And, of course, the Chairman must be somebody willing to give of his time and his effort in order to serve the Council.

Sir, these are some of the factors that we will have to take into account when we consider the appointment of the Chairman for the Public Transport Council.

The Member asked about the rules as applied to the smaller operators. Sir, rules made by the Public Transport Council will apply to all operators, whether they are big or small. I can assure the House that all applicants will be treated fairly by the Public Transport Council.

The Member also asked about the supplementary Scheme B buses. Sir, these buses will continue to have a role as they have at the moment. Their role primarily is to supplement, as the name implies, to supplement the existing scheduled buses and they will continue with that role, supplementing the scheduled buses in their new routes.

The Member asked about public participation. Sir, I have indicated in my Second Reading that we will be including members from various grassroots organizations. These will come from the Consumers Association, the CCCs and the RCs. So there will be public participation in the Public Transport Council.

The Member for Whampoa together with the Member for Fengshan mentioned the possibility of spelling out in greater detail the functions of the Public Transport Council. Sir, some of the details indeed are mentioned in clauses 11(a) to (e) and 12(a) to (e). We believe that the Act as it stands, taken from BSLA, is effective in giving the Council sufficient leeway to make decisions that are necessary. Quite obviously, the guidelines for the determination of a route that serves a rural area will have to be slightly different from the factors that will be taken into account in the determination of a route for an urban area. Rather than putting the Council into a straitjacket by having too many rules, it is better to have general principles like those that have been outlined in the Bill.

The Member for Fengshan asked about MRT routes. Once the rail has been constructed and the stations put up, it is unlikely that we will want to change the routes. The matter of determination of routes by the Public Transport Council for the MRT system will not be relevant at the moment.

The Member also asked why the MRT system is treated slightly differently from buses. The MRT system is an extremely complex system. There is a pool of expertise already existing in the MRTC. Rather than duplicating all the functions of the MRTC in the PTC, it is preferable for the MRTC to serve as the supervising statutory board for matters concerning the maintenance, operations and safety of the MRT system.

Both the Members for Whampoa and Fengshan asked about fares and seek clarification on the two statements found in clause 21 regarding "the need for operators to remain financially viable and the need for public interest to be safeguarded." I have mentioned in my Second Reading speech that it is important that we safeguard the public interest. It is the purpose of the Public Transport Council to ensure that while we leave as much as possible, fares to be determined by market forces, to be determined by cost factors, such as labour costs, fuel costs and other costs which add to the total cost of the bus companies, the Public Transport Council is in a position to act as a watchdog on behalf of the public. I mentioned also that obviously commuters want fares to be as low as possible but we must bear in mind that the bus companies have got to be viable. If bus companies are not viable, then sooner or later the bus companies will wind down on the services that they provide. Bus companies will reduce the number of services. They may have to lower maintenance. They may have to use older buses. They may have to reduce frequency. And these are factors that will not contribute to a better, safer or more adequate transport system for the people.

The important thing, Sir, as I mentioned earlier, is to ensure that the bus companies are efficiently managed. This is why there is a clause inside the Public Transport Council Bill giving the Public Transport Council the authority to approve the board of directors for these companies. That way, we ensure that the bus companies are well managed. Members of the House may remember way back in the late 60s and early 70s when a number of bus companies were very badly managed. Some of them went bankrupt and as a result of that land transportation in Singapore was severely disrupted. That is the sort of situation that we do not want to happen again.

The Member for Fengshan also asked about the ROV. The ROV and the Public Transport Council are two distinct bodies. The ROV has its primary function of registering vehicles on our roads and of ensuring and maintaining the safety standards of our public service vehicles. ROV has over the last decade or so built up a pool of expertise. They have an army of computers to help resolve many of the problems in their area of responsibility. They have built up expertise in software. They have also a collection of maps and routes. These can be of use in the initial stages to the Public Transport Council as it seeks to take off with the minimum of teething problems. In the initial stages, I think it would be useful for the ROV to assist the Public Transport Council. Once the Public Transport Council finds its own feet, it should operate independently of the ROV.

Sir, I believe I have covered the questions raised by the two Members.

Dr Arthur Beng Kian Lam: Sir, may I just clarify one point? When I referred to MRT routes, I was referring to the future routes that will be taken and I asked whether if the MRTC wanted to extend the route in the future, will it have to go through the PTC? Will the PTC have a say in the future?

Dr Yeo Ning Hong: Sir, future lines of the MRT system will to a very large extent be determined by the Ministry for National Development, in fact, by the HDB, because future lines will go to the new housing estates with heaviest population concentration.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Dr Yeo Ning Hong].

Bill considered in Committee; reported without amendment; read a Third time and passed.