MASS RAPID TRANSIT CORPORATION (AMENDMENT) BILL

Order for Second Reading read.

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

Sir, this Bill seeks to amend the Mass Rapid Transit Corporation Act (Chapter 172) to facilitate the performance of the Mass Rapid Transit Corporation's statutory functions in the light of the Singapore Mass Rapid Transit Limited's experience in operating the MRT system over the past two years. I shall now highlight some of the major amendments.

Section 25 of the present Act requires the Corporation to ensure that the revenue is sufficient to meet operating expenses. This obligation, however, would not be appropriate when the Corporation is not operating the MRT system as it is today. At the moment, SMRT, which is Singapore Mass Rapid Transit (Private) Limited, pays MRTC, the statutory board, only a nominal licence fee for the use of the entire MRT system. This way, fares for MRT have been kept low for our commuters. Clause 2 of the Bill therefore seeks to amend the Act to provide that the obligation to ensure that revenue is sufficient to meet operating expenses will only apply to the Corporation when it is operating the MRT system.

Clause 3 provides for a time limit for an owner, whose land has been affected by the laying and the construction of the MRT system, to require MRTC to purchase the land if he so wishes. At present, there is no time limit. This means that MRTC has to put aside a very large sum of money for an indefinite period of time in order to pay the land owners should they require MRTC to purchase their land at any future date. This obviously is not a practical approach.

Clause 6 makes it an offence for any person who wilfully commits any act which destroys or damages the railway or railway infrastructure and premises. The MRT is a mass transport system. It carries more than half a million passengers each day. The safety of passengers is paramount and every effort must be made to deter any attempt to destroy or to damage the railway system. Even if damage is detected in time, pending repair, disruption to services will result in very severe inconvenience to the public. It is therefore essential that a severe penalty should be imposed to serve as an effective deterrent. The penalty for such an offence will be a maximum fine of up to $200,000 or an imprisonment of up to one year or both. The offender will also be liable to pay compensation to the MRTC for the damage that he has done and the compensation shall be recoverable by civil action or suit before any court of competent jurisdiction. The proposed penalties are similar to the penalties provided under the Public Utilities Act for damage to electricity cables belonging to the Public Utilities Board.

Sir, I beg to move.

Question proposed.

Dr Lee Siew-Choh: Mr Speaker, Sir, it is clear that the Bill is to pave the way for MRT fare increases in the near future. How else would the Corporation, and I quote, "ensure as far as possible that, taking one year with another, its revenue is at least sufficient to meet its operating expenses", as stated in clause 2?

The trouble with the MRT today is that it has not been able to make money or break even. The 1989 MRTC Annual Report states that there is an operating deficit of $94 million, $40 million more than the operating deficit of 1988. Its operating income, on the other hand, was only $588,000 in 1989, compared to an operating income of $562,000 in 1988. In other words, the MRT has been losing money and more money every year. And the Bill now provides excuses for the MRTC to increase fares at any time the MRTC decides to do so.

The Minister for Trade and Industry has said that he cannot guarantee that there will be no fare increases in future. This means that there will be both bus fare and MRT fare increases soon. Raising fares will certainly lead to a chain reaction of price increases all round and in an increase in the cost of living. There is of course great public concern, again concern, Sir, on the matter of possible MRT fare increases. Therefore, there must be some form of restraint on fare increases by the MRTC.

Many people feel that if the MRTC wishes to increase fares, it should first submit proposals for such fare increases, either to a special Board or to Parliament. And such proposals for fare increases should not take effect until approval is given either by the Board or by Parliament. If the Minister thinks that the present arrangement is good enough, he could assure the public that there will be no unnecessary and irresponsible fare increases now and again. Would the Minister consider incorporating such an amendment in the Bill?

Dr Yeo Ning Hong: Sir, I am very sorry to say that Dr Lee is totally confused. I do not think he understands what the whole Bill is all about.

Sir, MRTC does not operate the MRT system, which is what I have just stated a moment ago. MRTC has got nothing to do with the operation of the MRT system. It is the Singapore Mass Rapid Transit (Private) Limited that operates the system. And the Member is totally confused. I cannot make any sense out of his statements at all.

Sir, the MRTC reported a deficit because MRTC will always be showing a deficit. It is an accounting procedure for reflecting the depreciation of the $5 billion that had been spent by Government in constructing the MRT system. And Government does not intend to recover the capital cost. So the MRTC will continue to be showing a negative figure for many, many more years to come, and it has got nothing to do with MRT fares at all.

Dr Lee Siew-Choh: I am glad, Sir, that the Minister has given me some clarification. I am beginning to learn a little here. But will the Minister give the assurance that there will be no fare increases by MRT?

Dr Yeo Ning Hong: Sir, I am aware of the fact that the Member is trying to score political points by saying that he has asked for an assurance that fares will not increase, and the Minister gave the assurance that fares will not increase. Unfortunately, he will not get such political mileage this occasion.

Sir, the SMRT, like the bus companies, is operated by a private company, and private companies do not come under the purview of the Ministry of Communications and Information. What we know is that the operators of the public transport system have systematically over the years ensured that they increase their productivity. And because they have increased their productivity over the years, they have operated more efficiently. Over the last many years, there had been no need whatsoever for the bus companies and the SMRT to increase their fares.

But, Sir, we live in a real world, unlike the world that the Non-Constituency Member of Parliament lives in. In the real world there are increases in labour cost. In the real world energy cost does go up, off and on. What is important is that we ensure in companies in Singapore, including companies such as the public transport operators, there is systematic education of the workers to raise productivity year by year. If we carry out our education in productivity well, then we postpone for as long as possible any increases in the sale of goods or in the provision of services, in spite of the fact that the wages for workers will continue to go up year after year.

Dr Lee Siew-Choh: Sir, I think we are all living in this real world, and that is why I am expressing this concern about the possibility of fare increases. Now the Minister has inadvertently admitted that they are trying to postpone the fare increases as long as possible. It is only a matter of time that the fare increase will come about.

Dr Yeo Ning Hong: Sir, as long as Singaporeans want to have wage increases, salary increases year by year, and as long as the service that is provided has a high labour component, sooner or later the cost of that service will have to increase. Where else does the money come from? Similarly with products that we make in Singapore. Where possible, we reduce the labour content. If we continue to use the same number of workers to produce the same product, with the same labour content but very much higher salaries and wages, then eventually the cost of the product or the cost of the service will go up. And if we are unable in Singapore to raise productivity, then sooner or later we become uncompetitive, particularly in products that we are exporting.

Dr Lee Siew-Choh: Sir, one last sentence.

Mr Speaker: Dr Lee, it appears to me that you are making a lot of clarifications today. Unless you have a fresh point, I cannot allow you.

Dr Lee Siew-Choh: The point is that the Minister is merely trying to rationalise the fare increases.

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.