PUBLIC TRANSPORT FARES

Order read for Resumption of Debate on Question [9th July, 2002],

"That this House, being aware that Singaporeans are suffering from the effects of a recession, mindful that many Singaporeans, in particular the unemployed, are having difficulties making ends meet and agreeing with the Prime Minister that this is not the best time to increase bus and MRT fares, (a) urges the Public Transport Council to review its decision on the increase in public transport fares; and (b) further urges the Government to take steps to ensure that the prices of public services are not unreasonably increased during these difficult times.". - [Mr Tan Soo Khoon].

Question again proposed.

Ms Irene Ng Phek Hoong (Tampines): Sir, according to the latest Annual Report of the Public Transport Council, the PTC is driven by the mission to balance the need for public interest to be safeguarded and for public transport operators to remain financially viable. With the fare hikes, coming at a time when Singaporeans are hit by job losses and pay cuts, the feeling on the ground is that the PTC has put the interests of the public transport operators over that of the public. The PTC has lost sight of the larger social mission of public transport.

Most Singaporeans use public transport today because cars are priced out of their reach, with the Certificate of Entitlement and the taxes on road usage. Public transport is the only affordable means to get to where they need to go, to work, to the market, to get home. It gives them access to employment and, hence, income. As an MP, I sometimes hear jobless residents not wanting to take jobs far away from their homes because it means taking two buses and an MRT ride, which means waking up at 5.30 am to get to work on time. The cost of travelling itself can also be a disincentive, especially if the take-home pay of the job offered is already low.

The pricing of public transport has a major impact on the lives of disadvantaged people. The household expenditure surveys conducted by the Department of Statistics consistently show that it is the lower-income group, especially those in 1- to 2-room flats, who spend most on public road transport, compared to the other groups. Indeed, the latest survey shows that public road transport takes up 6.8% of the household expenditure of those living in 1- to 2-room flats. This is higher than the average 4% for all households. Any price changes will hit the lower-income most. And we also know that this economic downturn has hit them the hardest. The Government says that it helps them with the Economic Downturn Relief Scheme, the New Singapore Shares and other such financial schemes. But these are often once-off affairs, or for the EDRS, up to three months. But the psychological blow, not to mention the financial impact, of a price increase for something as basic to them as public transport is felt on a regular basis.

Sir, I do not drive and I do not own a car. I take public transport everyday. I know the service of the public transport has improved over the years. But I also know how it feels to be squeezed in a bus, with no elbow room, and to have to wait for more than half-an-hour for buses that arrive so packed, you have no choice but to wait for another, which comes another half-an-hour later, just as packed. The commuting masses, by and large, do not want frills. They want an affordable but an efficient and convenient public transport.

I heard the Senior Minister of State Khaw Boon Wan talking about buses being made more sophisticated, so that they can be "mobile offices". Frankly, I dread the day. I find the TV mobile enough of a nuisance. Commuters often use the travelling time on buses to rest, take a nap or just unwind, not as a place to start work. I urge the Government and the PTC not to forget the social mission of public transport as they tinker with fancy and costly ideas that the public does not want.

Sir, the Transport Minister was reported as saying that the commuters should expect fares to rise because service standards and wage expectations keep going up. I question this. In times of recession, all workers, including bus drivers, have been told to moderate their wage expectations. As for service standards, yes, as I have said, they have increased, but commuters do not want to be made to pay for unnecessary frills. The airconditioned bus interchange is a frill. Why the need to aircondition it when the idea of a quality service is that commuters do not have to wait too long at the interchange for their bus to arrive? True, this interchange is not factored in the recent fare increase, as the bus operators do not have to pay for the capital cost of building the airconditioned interchange. It is paid for by the Government. But they have to pay for the cost of maintaining the interchange. This will surely add to their operating cost. Will this lead to bus operators asking for more fare increases in future, especially as I hear that more airconditioned interchanges are on the cards?

Sir, the Transport Minister has defended the hikes by saying that transport companies must be allowed to make reasonable profits. It is not clear to us or to the public what are the criteria for deciding if operators are making reasonable or unreasonable profits. In particular, how does the Minister measure viability, given the current economic conditions and the social mission of public transport? Moreover, the operators are operating in a privileged situation, with limited competition. The reasons given by the operators for the fare increases are not compelling. SBS Transit cited increases in statutory costs, such as ERP, as one reason for the fare increase. I know the Government has more than compensated SBS for the ERP charges by lowering the road tax significantly. But given the social mission of public transport, there is also a case for the Government to ease the cost burden by examining if the statutory costs, such as the ERP for buses, can be reviewed. Public transport should be exempted from the ERP, which is meant to ease congestion and to encourage cars to use alternative routes. Buses have no choice but to ply the routes that they have to. Sir, there is a fear that ERP will only continue to push up the cost of public transport further, especially with night ERP being discussed.

As for SMRT, it cited energy cost as one factor leading to rising operating costs. Energy cost has risen as a result of electricity tariff hikes. For TIBS, one of the factors cited, among others, is diesel cost. But why should these factors be cited as reasons to raise fares when electricity and diesel costs should be addressed by the Fuel Equalisation Fund (FEF). This Fund was set up in 1992 to address volatile fuel prices and to curb fare increases due to fluctuations of fuel prices. The operators should be allowed to draw from their FEF to cushion the impact of increases in electricity and diesel costs, without a fare increase. As at 31st March 2001, the balances in the FEF are $39.8 million for SBS, $8.7 million for SMRT, and $8.4 million for TIBS. They can draw from this rather than raise the prices.

I also query the argument that restriction in the number of operators allows them to achieve economies of scale and to balance the profitable routes with the unprofitable ones. Some MPs have repeatedly asked for bus routes within their estates. I myself have represented my residents in asking for Bus Service 292 to link two zones tucked in a far corner of my ward directly to the Changkat Community Centre, but the response has always been, "It is unprofitable. Hence, we can't give you that service."

I propose that competitive tendering be extended to certain zones. There is potential for lowering costs by introducing competition in awarding contracts to run zonal services within a planned and coordinated network, as has been adopted in other countries such as Scandinavia. On this matter, perhaps more weight should be given to committees, like the Estate Coordinating Committee of a GRC. These committees, which can be found in Tampines and Pasir Ris GRCs, coordinate estate development and include LTA and SBS representatives as well as grassroots leaders and MPs. Perhaps more authority and powers could be given to this Committee to push forward the agenda for competitive tendering.

Sir, some Members argued that this House should not undermine the credibility and independence of the Public Transport Council by urging it to review or reverse its decision on fare increases. While I agree that we should not politicise the PTC and its work as far as possible, it is important to assure the public that they have recourse in such matters. This is the case with the Judiciary. Our Judiciary is independent, and it guards its integrity jealously and fiercely. No MP is allowed to ask the Judiciary to reverse its decision. But it has an internal appeal mechanism which makes sure that the system works. If one disagrees with the judgment passed down by the courts, he can appeal to a higher court. But in the case of public transport, there is no higher body outside of Parliament. Moreover, as this case shows, Parliament may not be able to react fast enough to appeals from the public. This sitting is taking place after the fact, after the fare hike has already been implemented.

I would urge the Minister to establish a public transport ombudsman as a mediator or assessor of last resort for users, and perhaps for public transport operators as well. There should be a body separate from operators and regulators to act as an appeals body. It would help ensure that the system works, that the process is transparent and, at the same time, assure the public that they can get a fair hearing before a fare hike is implemented.

Finally, with all these fears about price increases, especially in public transport, I want to bring up a cheaper alternative to public transport and cars - and that is cycling. Sir, I declare my interest. I am the patron of the Singapore Amateur Cycling Association. Cycling is becoming increasingly popular in Singapore, both on and off-road. But our road transport system gives little thought to their use. On-road cyclists find their enjoyment and safety jeopardised by sharing roads with motor vehicles, and off-road cycling may conflict with the interests of pedestrians. Sir, there was a time when I cycled to work from Upper Changi Road to Times House, then in Kim Seng Road, and back. But I stopped after I was knocked down by a taxi. Sir, there are local grassroots and environmental groups, all trying to promote cycling.

I urge the Minister to consider providing a bicycle lane on roads that can be used by two-wheelers, including motorbikes, for safety and as well as an alternative mode of transport. Such lanes can be found in many developed cities, even those which experience winter. These bicycle lanes are not used in winter, but that does not stop the authorities from providing them. What more for a country with tropical weather all year round?

Sir, in conclusion, public transport must be guided by its over-riding social mission. The PTC, in reviewing fare prices, should take into account the state of the economy, the unemployment rate, and also the affordability of public transport to the masses, especially the lower-income.

I support the motion.

Mr R. Ravindran (Marine Parade): Sir, the motion being moved in this House is a significant one. It is both timely and bold in its call. It was unfortunate that a slew of public service charges have increased over the last few months. It could be that some have decided that it is a politically safe time to raise charges without incurring the public ire.

Sir, the public has spoken. Looking at the quality and the tone of the letters, comments and feedback, both in the public and private domains, one cannot but conclude that there is indeed a sense of frustration and despair among many Singaporeans. The increase in the garbage collection charges was the first whip the public tolerated. Then came the carpark fee charges and the public transport fare increases. Collectively, they will make a financial dent in the lives of Singaporeans. Many people are worried how do they cope with these increases when their salaries are frozen and, in some cases, cut.

Many Singaporeans' feedback was rebutted with the usual statistical and textbook answers. The increase was a small percentage in relation to the overall fare per trip, that is what some said. What it fails to highlight is the percentage increase, and the fact that many Singaporeans take public transport many times a day, and not once or twice, as some people have highlighted. I recall that, during the last four years, some Singaporeans had seen many MPs, in the course of their meet-the-people sessions, with sad stories that they could not afford to go for job interviews, because they did not even have money to pay for their fares.

Sir, I sympathise with many Singaporeans, particularly our low-wage earners, for whom public transport can come up to 10% of their monthly expenditure if one includes the total income they spend on public transport. Many have not had pay increases for the last few years. Some have their pay reduced, some have just been re-employed, and some are still unemployed. The impact of the public transport fare increases on this group of Singaporeans is tremendous. They are angry but, at the same time, they are helpless.

I join in the call of the people to demand an explanation as to why public transport fare increase was allowed in these difficult times. Last year, the Public Transport Council took into account the prevailing economic situation and only allowed the alignment of adult feeder fares with the minimum trunk fares. Even then a 10-cent increase, from 50 cents to 60 cents, came up to about 20% increase in the feeder fare increase. I thought it was a substantial amount because many Singaporeans use feeder services in the public housing estates. It was a substantial jump for many Singaporeans because they use these feeder services.

For this year, despite no substantial improvement in the economic environment, the PTC has approved an across-the-board increase. I would like to ask the Minister why an increase was allowed when the economy is still in the recovery phase. I am equally puzzled as to how the wage bill for the public transport operators can be increasing, the CPF cut is still in place and wage increases are minimal. When some companies are in the red and many more are without a steady business, was there a real need to pamper our bus companies with a fare increase? For a monopoly who enjoys a steady profit, even in bad economic times, could they have sacrificed more and alleviate the financial burden of the public?

I would like to ask the Minister whether the present policy for allowing route and transport monopoly is the best model to achieve a good, efficient and reasonably priced public transport system. I am sure the Minister will agree that the public policy favours competition over monopoly. In many countries, public policy relies on the competitive market to establish the price and quality of goods and services. Yet, in Singapore, in the public transport domain, we have monopolies.

I would urge the Government to seriously consider calling for public tenders to run certain transport routes, which was mentioned earlier by my colleague, Ms Irene Ng. This would certainly not unsettle the present operators, as many of the infrastructure and mass public facilities, like MRT stations, bus stations, and depots, are built by the Government with taxpayers' money. By calling for tender, say, once in five years, I think it will allow these public transport operators to be benchmarked against the market mechanism, and to see whether true efficiency can be delivered by the market.

In the present set-up, the only available models to compare cost efficiency are the present two operators and the two MRT operators. They enjoy a monopoly in perpetuity. Opening up the market and testing the existing operators against other potential competitors, I am certain the public would benefit. A good example is the case of the garbage collection companies. I understand that the Ministry of the Environment divided Singapore into eight sectors and called for tenders for each of these sectors. The cheapest was selected by competitive tendering and their contract period is limited to five years, after which a fresh tender will be called. I would urge the Minister to consider such an approach as a way to control costs and introduce competition to the public transport sector.

Let me highlight one more sector to show how competition in the public sector helps control fare increases. Sir, when taxi fares were liberalised, the taxi companies did not increase their fares because they knew that demand was not inelastic. They know that customers have other choices, like bus, MRT, and other taxi companies, to reach their destination. In the case of public transport operators, like bus and MRT, the public has no choice. They are fixed by the present operators - use them or be doomed. In the long run, I do not think that this is the model that we want to have in Singapore.

Sir, as I was listening to the debate yesterday, I was impressed by the arguments of the Senior Minister of State for Transport, Mr Khaw Boon Wan. He highlighted there are many misunderstandings among the public. However, I felt that there are still a lot of misunderstandings remaining, despite his brave attempt to clear the misunderstandings. Misunderstanding No. 1, which he highlighted, is that fare increases are not due to frills, and that these are paid for by the Government. But what he fails to state is that the operators have to maintain it. As my colleague earlier highlighted, more airconditioned bus terminals are going to come. A PUB officer advises any consumer who goes there and complains about high PUB bills that airconditioning is the biggest culprit. Here, again, we have to ask ourselves whether the operators are going to bear the cost of these new frills. In his speech yesterday, he did not cover this aspect. The misunderstanding continues. This misunderstanding is legitimate. Perhaps the Government could explain whether it is the Government's agenda, or the public bus operators' or MRT operator's request that such facilities be built.

Sir, misunderstanding No. 2 is that he explained that fare increases are not to fatten the profits of bus companies. I beg to differ because I cannot see any other reasons. I cannot recollect any of our public transport operators being in deficit, or close to it. They have always enjoyed good profits and they have always come back to PTC for fat profits, not to pull them out of any deficit, or any other serious problem. In any event, as listed companies, they can always go back to the equity or loan market to raise funds that they may need, instead of relying on fare increases as the sole source of raising money for their business. Let us not reward them for their lack of financial creativity.

Misunderstanding No. 3. It was stated that bus companies have huge losses in other business, and they have attempted to cover it by fare increases. He has explained this misunderstanding. I spoke to many people and they are clear in their mind that there is no such misunderstanding, and that this was never an issue in the debate that has taken place over the last few days.

Misunderstanding No. 4. He raised the issue whether PTC was uncaring. He said that PTC indeed was caring, and he highlighted some figures. He mentioned that the average wage has gone up by 136% over 15 years. CPI has gone up by 29%, but the transport fares have lagged behind. Unfortunately, no data was provided by how much it has fallen behind the wage group. A better comparison would be to see how much is transport expenditure in relation to a Singaporean's wage now, as compared to 15 years ago. I do not think there would have been a drop. Indeed, I speculate that the portion of transport expenditure would be higher relative to one's ordinary income, particularly the ordinary wage earner. Naturally, it leaves one wondering whether the Senior Minister of State has difficulty in producing the relevant figures. I would urge the Minister to address this issue.

In respect of the role of the PTC, I must say that I have great sympathy for the PTC, because they are handling a difficult assignment. How can they be fair to both the public transport operators and to the commuters at the same time? The parameters of their job are defined by an Act of Parliament. My colleagues have raised many issues in relation to the job of the PTC, questions about the conflict of interests, whether the members are qualified to be able to be sitting in the council. And I would like to add one more issue, whether the PTC has, in the course of its deliberations, independent studies put up by think-tanks, or academics, to advise the PTC, or whether they just rely on the reports furnished by the bus companies as the sole source of reference and decision-making. Perhaps some clarification could be given, both by PTC and the Minister to clarify to the public on how they arrived at these figures. Because being a lawyer, I can always say that there are two parts to the argument, and it depends on who presents the argument. If the bus company is the only company that is able to present the argument, I pity the PTC because they need additional support and research from other independent researchers, or academics, to support the PTC in whatever decision that it is going to arrive at.

Let me now move on to a wider question, and it is whether the type of competition that we are having in Singapore in the public transport market needs to be re-looked. I think it is something that the Minister has to look at the Ministry's level and see whether there is indeed a call which can be justified to re-look at the type of public transport operators that we have in Singapore, and not rely on some consultant's report which was made some decades ago. That is the format that is being used in Singapore. Considering the present public transport usage and the type of market that we have, perhaps it is time we re-looked at the whole market itself, and see whether we can allow for more competition so that we can achieve greater efficiency.

Sir, let me now move on to the second part of the Motion that deals with the call to ensure that essential public services remain affordable, and that any price increases during this difficult period should be kept to the absolute minimum. In my view, this is where the real crux of the debate lies. Fare increases are the chosen rhythm of the day. The others, like carpark charges, utilities, have been let off lightly. The wider debate is how do we scrutinise increases in the price of essential services. While we have some mechanism to ensure that some public services are subject to market mechanism and competition, not all are. Some public services are in the hands of the Government, some in autonomous Government bodies, some in statutory boards and some in the public sector. In the public sector, I again applaud the Ministry of the Environment for its practice to call for fresh tenders at the end of the tender period for refuse collection contractors. In some cases, public bodies, like PTC, or CASE, have a role to play. In the case of some essential services being provided by the Government, I would urge the Government to ensure that cost recovery should be its policy rather than profiteering.

As many of the cost structures and profit numbers are not found in the annual budget numbers, it becomes an impossible task for any researcher to identify these culprits. I would urge the Government to give the mandate to the Auditor-General to look at the Government agencies that provide essential services and determine whether they are operating on a cost recovery or profit-making basis, and to highlight these cases in its annual report. This will provide a good example of our Government leading by example where its essential services are scrutinised by an independent authority. Perhaps CASE, or a committee made up of the general public, can start a list of such essential services to be scrutinised by the Auditor-General (AG), and this list should be made available to the Government for scrutiny by the AG. This will certainly arrest the trend of some essential service providers, including the Government, charging unreasonable fees and charges under the pretext that they are affordable to the public.

Sir, whenever a fare increase comes about, or some increase in fee comes about, the usual words are that it is "affordable to the public". This argument is going down less and less with the public, because affordable does not mean it is cheap. It can be cheap and affordable but, in many cases, the yardstick that some of these essential service providers equate is that if it is affordable, the public can tolerate. This should not be the way in which we price essential services. The way we should price it is that we must make it cheap and affordable, not merely affordable.

Sir, in conclusion, I would like to say that we have a duty to ensure that essential services are provided at reasonable prices and even at subsidised rates, eg, health, education and sports. One of the arguments that the Government has stated in allowing some of these public fare increases, or essential service increases, is that we provide rebates, or we provide some form of financial help to the poor by giving them money in the form of Singapore bonus shares. But having talked to many of the people in the poor income bracket, it is basically a shot of ecstasy for a while. They take the $600, or whatever amount that is given, and spend it, and that is it. They come back to normal. So we have to think of a way whereby such amounts are directly going to help people cope with these increases, if need be, rather than giving them one shot and then having them spent by the public in one go. Somebody said to me that it is basically a one shot of ecstasy. After that, they get high. Then, the next day, they wake up, and it is back to solving the same problems.

Sir, we must remind ourselves, at the end of this debate, that the public are like a balloon. They can take a fair amount of air pressure and expand, but too much pressure and they will burst. And burst they will one day, if we do not look after their interest and welfare. Let us never take the public for granted.

On that note, Sir, I support the Motion.

Ms Braema Mathiaparanam (Nominated Member): Mr Speaker, Sir, I rise in support of the Motion put forth by Members of the House, and I agree with the eloquent argument put forth by Mr Tan Soon Khoon. I feel that the move to raise fare prices in this instance was ill-timed and a misjudgment. The rationale given for the fare hike was one of recovering costs - incurred in terms of wages given to employees and in terms of maintenance for services - to maintain the respectable profits for the public transport companies.

Yes, profit is not a dirty word, but when the very profitable transport companies seek to recover costs from a public that is generally going through a bad patch, that action, at this point in time, leaves behind a foul taste in the mouth and cannot be very palatable. On grounds of this principle, I feel that it is not a rightly placed motivation to push for the hikes in bus and MRT fares.

In a perverse way, however, we also have to say thank you to this fare hike, because it has brought into focus the role of the listed public transport companies, the role of the PTC and the needs and, more importantly, the expectations of a more sophisticated commuter today. This incident highlights, in my point of view, these three main points, and what is also to be appreciated is how this public outcry is also a good sign that Singaporeans do care for others, for whom the pinch hurts a bit more. These are good signs of a maturing Singapore.

Coming back to the three points: on the role of a listed public transport company, I seek a greater clarification on what is the role for a public transport company. The issues related to this question have already been brought up by the other speakers: should such companies be just focused on profits? Should they take a different model or be restructured? As has already been suggested, should their services be opened up for tenders? Hence this means a re-examination of what is the role and function of public transport companies.

The other is the role of the PTC. At least a third of the members in the 14-member Council are either from one of the transport companies or the shareholders. Whether they like it or not, the perception is that perhaps they could be looking after the interests of the organisations they represent, and it could be most unfair to them. It is best then to have a range of members in this Council. I would like to suggest that some of the members come from the school bus operators, private bus companies, as well as officers from NParks. NParks has been trying for some time to bring families to its parks - and we are family oriented - and it is also trying to nurture a cycling culture within Singapore. It might be timely to have their input too in the council.

But, what is going to be the role of the PTC, if there is perhaps no change in the current model of how public transport companies operate? How are they going to walk this fine line between safeguarding the public interest as well as those of the public transport companies? And it is at this point that I do despair over the age-old debate about providing services for those who are disabled, especially those who are wheelchair-bound. This is an age-old debate, perhaps as old as the 15-year-old PTC. How are we going to address this? We are an aging population. The North East Line, when it opens, will be ready for those in wheelchairs, and yet how seamless are we in this aspect? There are already retrofitting works going on for other MRT lines, but where does the bus fit into this scheme of seamless transportation? To outfit buses with hydraulic lifts for the wheelchair, as a previous Straits Times report shows, can cost about $40 million. When it comes to providing for such facilities, what then will be the role of the PTC? If there is any guiding principle at this point in time on how the PTC operates, then its rationalisation to raise the fares for the bus companies, leaves me to fear that bringing in better systems for those in wheelchairs may take another two decades before it comes true.

Hence, I feel that this current 3- to 5-cent hike - which some cannot understand what the whole fuss is about - is a good point at this time to reflect on how we can improve the role of the PTC, reassess what is the structure or model for public transport companies, as well as, at the same time, understand the Singaporean of today better. To an unemployed Singaporean, 3 to 5 cents will send shudders. To the average Singaporean, it means absorbing more and more costs. Here, I would like to relate a case that happened just last year. A woman and her daughter walked all the way from Bedok to a hospital in the central part of Singapore, because they could not afford the bus fares. Thankfully, the mother and daughter have been helped since, through the very same schemes that Minister Mah Bow Tan brought up yesterday. Even as we help those who cannot afford to pay for their transport, let us not forget that the money comes from donations from the public, and from MCDS-funded programmes, which again comes from the taxpayer. So, it is not so easy to dismiss this concern for those who cannot afford to pay for public transport by citing available financial assistance schemes.

For the above three main reasons, I think the Motion is a good one.

Mr Arthur Fong (West Coast): Mr Speaker, Sir, I rise in support of the Motion.

Sir, many of the speakers before me have already expressed the unhappiness of the public transport users and their plight. They have also pointed out correctly that many are upset because of a slew of increases that will take place over the next six months. This unhappiness is exacerbated by the uncertainties that workers face as retrenchments by companies will surely continue for the rest of the year and even up to early next year.

As the Government warns us that more jobs will be lost - and the 5% unemployment rate is hanging over us - a call to be austere by the Government further ignites the anger of our people as a slew of charges comes on stream.

Mr Speaker, Sir, the PTC is entrusted with the important and, as we have seen, a difficult task of striking a balance between safeguarding public interest and ensuring the financial viability of operators, and we have heard the comment on viability by our hon. Member, Mr Tan Soo Khoon, yesterday. I join in the call by my hon. colleagues who spoke before me to urge the PTC to consider in its fare increases to tip the scale towards safeguarding the public interest to achieve the balance it first set out to do. Whether in reality or not, people are not convinced that the PTC has represented their interest. Together with the stream of increases from other bodies, the unhappiness is understandable. We hope that the PTC will communicate the plight of the commuters to the transport companies.

My hon. colleague, Mr Ravindran, pointed out just now that affordability may not be cheap. If we look at affordability - this is my perspective - at any single increase, we can say whether it is affordable or not. But when we put a slew of increases, affordability for each in totality means I cannot afford for most of these essential services.

Mr Speaker, Sir, on the points raised that the Government is uncaring and not listening to the people, I do not think so. What I think the Government did not do well enough is perhaps that it might have painted a clearer enough picture of why the increases have to be made now. If this had been done, there might not have been so much nitpicking, irritation and anger over the increases. Yes, I do feel that some of these increases, especially the bus fare increase, are ill timed. With a little less profit, I am sure the company can make it through another year or so.

Transport companies have to realise that revenue gains will probably not increase at the rates like before. Commuters will have to realise that capital equipment, such as buses and systems, needs to be replaced, and these investments cost money. Without such replacements and upgrades, the benchmark service levels that Singaporeans think nothing of, will not be maintained, let alone improve.

Why this unhappiness? I think the PTC, the transport companies and the Government bodies did a poor job in enlisting our people in seeing the rationale behind the slew of increases and the timing of it. Only when an uproar occurred did "justifications" come out. Yes, let me tell you that a Member doing explanations of justifications at block visits and grassroots events is quite a sight. How else could we have explained to the commuters?

As I sat here looking at these wonderful plasma screens, probably the first in the world, I remember the times going to a movie at Lido Cinema where a seat at a stall cost us $2.50, and a circle seat $4. When the new generation cinemas began operating, the price of movie tickets was double what people were used to paying. Cinema-goers were crying foul. Double the price? I will stay home and watch the videos. Today, with DVDs and VCDs in most homes, going to the movies is still a treat. People have come to enjoy the state-of-the-art sound system, the comfortable seats, the screens and the picture quality that the extra $4 get them. Making movies today is also much more expensive. I do not think the people will go to the cinema for $4 now for a movie in the old cinemas, even if one can be found today. A trip to a movie now will cost us $8, and that is without the popcorn and soft drinks. Let us learn to explain things so that people can make sense of.

The bus companies have set a benchmark that Singaporeans have become used to. Service standards can and should get better. It does not make sense to say now that we can wait and we do not mind waiting for 30 minutes instead of 15 minutes, like we used to, because I cannot take the 3-cent increase.

Mr Speaker, Sir, this Parliament opened with a cautionary Address from the President and, since the Budget, Singaporeans have been advised to be austere with an uncertain economic backdrop. As the economy seems to be headed for some recovery, the longer term outlook will still see companies making less revenues and not at rates of increases as before. This is a global phenomenon for most companies, whether or not it is in a regulated transport environment.

Sir, we are seeing many companies buttoning down their hatches and booking their profits early, employing their profits to secure cheaper capital, restructuring their balance sheets, and making changes to position themselves, so that they can operate profitably in the face of lower revenues down the road. I think the transport companies are no different here.

The PAP Government's idea of seamless transportation goes beyond what the transport companies tell us, and I have some additional comments to add to the point made by Ms Braema. What do I mean? Let me relate this to Members. When I was going to school in a university town at Eugene, Oregon, I signed out a wheelchair for half a day. With a clipboard in hand, I went to various parts of the university and to the town, and one of them was the local library. Although the objective of the exercise was to understand how a wheelchair-bound person would feel accessing buildings, I was amazed by the bus ride that I took. The bus platform lowered for me for the wheelchair to be on, a single bus driver de-bused, helped me strap in and went on its way. So, going down the road, this seamless transport would come into play.

The PAP Government has led the HDB upgrading programme and, as we can see, there is a ramping up of the construction of access ramps from bus stops to HDB precincts, and from carparks to linkways to HDB blocks. The objective of Barrier Free Access (BFA) for HDB dwellers is a long-range idea. It is a long-range plan to give our aging population BFA all the way to the buses. This is the PAP Government's idea of long-range planning of caring. Not caring for the people? I do not think so.

Perhaps, in the future, I am sure that the reasons for increases in the bus fares, as Ms Braema pointed out, would even include the cost of providing buses that can accommodate the increasing number of people going around in wheelchairs. The Government is not caring? Clearly not! Perhaps a poor way of showing it - that it is listening. But not caring and not listening? I do not think so.

Mr Speaker, Sir, the PAP Government had garnered support from our people, and we have together built Singapore to what it is today. Our people face difficult times, and the decisions made by the Government then had great implications on whether we survived as a nation or not. This will not change. The PAP Government had never succumbed to pressures and never went the way of populist policies, however difficult politically it was. The resolve to carry the nation and to implement unpopular policies in order that we make it, despite political costs, shows what kind of Government this is. Globalisation has set in motion a shake-out not only global businesses have to deal with, but governments of the day would have to address. What we do during this shake-out, and the kind of resolve we have to change and put on new armour for a different kind of fight, has bearings for our social and economic structures down the road.

I am comforted by Minister Mah's and Minister Khaw's acknowledgement that the Government needs to respond to the calls by the people and to see their plight. I hope that the Government will do a better job of showing that it has listened.

Mr Speaker, Sir, I hope not just the PTC but the respective Government bodies responsible for the slew of charges in fee increases will explain the rationale in a way that people can understand and, most importantly, explain the timing for such increases, and consider the economic plight of its users. I hope that Singaporeans can unite during these difficult times and to move on and brace themselves for the greater challenges on the horizon.

Mr Ng Ser Miang (Nominated Member): Sir, I wish to declare my interest as a Director of the SMRT Corporation. I also add that I no longer own any shares in any of the public transport companies since the merger of MRT and TIBS in December 2001.

Sir, I join this debate not to defend the public transport operators, but with a hope to give a different perspective to the issue, so that a more balanced view on both sides of the coin would be considered.

Mr Speaker, Sir, I empathise with the commuting public, who are affected by the recent round of fare increases. Fare adjustment not merely has its financial implications, but it is also an emotive issue. In an article in Shin Min Daily, a writer angrily complained that his "chwee kueh" has increased from $1 to $1.20. And the owner told this writer that the increase was a result of the recent fare increase. So we can see how emotive things can get.

Sir, on the other hand, I also empathise with the Public Transport Council which, as some Members have also pointed out, has the unenviable task of balancing the interests of the commuting public with the need of the public transport operators to remain financially viable in order to provide the required standard of service. The nature of public transport service is such that it is characterised by huge capital investments, high manpower and substantial energy or fuel cost. For example, in the case of SMRT, it has fixed assets of $1.38 billion, including those of TIBS. On high manpower and substantial energy or fuel costs, in the case of Singapore, wage bill for bus operators is about 50% of total operating cost, and 40% for train operators. Transport workers, who provide 365 days of service, and almost round-the-clock service on a daily basis, have to be appropriately remunerated and motivated in order to provide good service to commuters. They too expect yearly adjustment and incentives, so that they will be within range of their fellow workers. Some have argued that, in difficult times such as this, probably transport workers should also moderate their expectations. But this is very much more of the condition in the labour market. Not many realise, for example, that bus companies face perennial difficulties in recruiting and retaining bus crews. Singaporeans shun this kind of work, finding it tough and the working hours unearthly - waking up at 4 o'clock to do the first shift, and going home at 3 o'clock in the morning when they finish the last shift. They find the pay not attractive, as it is not commensurate with the type of hardship they have to endure. Their work is seldom appreciated by others, and they have to face complaints of commuters who have higher demands, and higher and higher expectations. Whether in good times or bad, bus companies have to pay attractive salaries to attract and retain workers, so that they can continue with their operation.

The Public Transport Council, the body responsible for regulating public transport service and approving bus fares, has a thankless job to do. It has to face the wrath of public opinion whenever there is a fare adjustment, and also the unhappiness of public transport operators, who usually do not find the approved increases meet the needs of what they have justified. Whether in good times or bad, there are always complaints on fare adjustments. And we can all understand that it is more so during difficult times, such as now.

But I would like to add that the record does show, for example, that during the last 10-year period from 1992-2001, PTC approved a total of 11.7% for train fare increase and 13.7% for bus fare increase. The consumer price index went up 13.3%, while real wage increased by 53% and nominal wage increased by 68% over the same 10-year period. The fare increase approved by PTC could not cover wage and other operating cost increases. Operators had to find other means to increase revenue, adopt vigorous productivity improvements to make ends meet, and to have reasonable profits to keep shareholders satisfied.

Sir, I do not think there was very much argument on reasonable returns to transport operators and their shareholders. The nature of these companies is also such that investors find that they are really similar to utilities stock. In the case of SMRT, they gave a dividend yield of 4.12%, and for SBS, 4.24%, which are very much in line with market expectations. So, we can see from the last round of fare increases that there were no big movements in their share prices, a reflection that it is very much in line with market expectations. Shareholders who invest in these companies also do not expect exciting share price movements like those in the technology industries.

It is only fair to say that PTC has done a good job in keeping public transport fares within the range of the CPI, and substantially below that of real wage increases, making it affordable to commuters. At the same time, it did not allow automatic fare increases and ensured that operators earned their keep through better productivity. Sir, I believe that the work of the PTC should be recognised by this House and that they should be allowed to continue with their work without interference.

Sir, some have suggested that having representatives of public transport operators on the Council is not a good idea, as it may give a wrong perception, even though these representatives do not take part in the deliberations on fare increases and they have absolutely no say in approving fare increases. On the other hand, I am not sure whether it is a good idea to exclude them, because the Public Transport Council does more than approving fare increases. I do not know whether this Council should become an authority, or whether it should be a partnership between the Council and the public transport operators, so that it could look into the various aspects of public transport, so that services can be improved and costs can be contained.

It is really a thankless job to do. There are suggestions to include other representatives, and even Members of this House. I am not sure whether there would be many volunteers rushing for this job.

There is no doubt that the Public Transport Council must continue to be stringent when dealing with fare adjustments. Public transport operators must continue to improve productivity and contain costs.

How best do we then deal with fare adjustments when they become necessary? Sir, there were suggestions that, if public transport service is not provided by commercial enterprise, then perhaps there could be lower cost to them. But, Sir, if the cost of capital is not provided by shareholders and, therefore, the required profit and a reasonable return, then it has to be provided by loans, which also have interest cost. So, either way, the cost factor would always be there.

Sir, it is not a practical solution to allow only fare increases when the economy is doing well, as the need to adjust fares may not coincide with the economic cycle. Looking for such windows could lead to irregular and hefty fare increases that are more painful. Second-guessing the economic cycle could also catch PTC on the wrong foot and force PTC to approve hefty increases during a downturn, which is hardly acceptable. It also means that the profitability of public transport operators would deteriorate over time and surge or spike when there is a fare increase, a situation that is not satisfactory to their shareholders, and transport operators will find it difficult to do good financial management and planning.

On balance, the recommendation of the Cost Review Committee in 1997 for a small increase on a regular basis is a better solution. The advantage is that it is less painful and disruptive to the commuters. Using the 10-year period of 1992-2001 again as an illustration, train fares went up 11.7% before fare adjustment during this period, ranging from 0.22% to 6.42%; 2.19% in 1994; 6.42% in 1995; 0.22% in 1997 and 2.23% in the year 2000. If we do regular small increases on a yearly basis, it amounts to a small fare adjustment of 1.17%, which, I believe, would be more acceptable, and it avoids the need for deferring fare adjustments until such time that it may not be acceptable.

For public transport operators, it means more certainty in financial planning, the ability to better plan for capital expenditure and investment. It would also smoothen the earnings of public transport operators and avoid spikes in earnings, which, if taken in isolation, may be misinterpreted as obscene profits or unacceptable windfalls.

Sir, it is never easy to find simple solutions to complex public transport issues.

Sir, about 4 million passenger trips are made on buses and trains each day. The commuters using public transport range from workers to senior executives, students, housewives, to senior citizens. Their preference and requirements range from very basic transport service, and some would say they do not want airconditioning in buses, to the high end business-class type of service. Their tolerance to fares also differs substantially. To make each and every commuter satisfied is really a daunting task. It is unlike airlines where they can have differentiation in type of services - having first class, business class, economy class - and therefore charging different fares for them. In our public transport service, we can only have one class fare. So whatever changes will affect everyone, across the board.

Some Members spoke about no-frill service. Over the years, in tandem with the progress of our economy, and with a higher standard of living, expectations for a better public transport service have also become higher. For better comfort of passengers, we introduced airconditioned service. For safety and convenience of commuters, we introduced low floorboard buses. For clean environment, we introduced Euro 1, and now Euro 2, engines. These add up to cost. For those who will not want to wait longer for bus services, they demand higher frequency. For those who wish to have convenience service, they ask for more services, more direct services, and higher frequencies. And some of these new services may not be economical to run. And if they are not happy with it, they go to the MPs, and MPs will write to the public transport operators. If MPs are not satisfied, they will complain to the Minister. So, Sir, these uneconomical services and higher frequencies that people expect also add to cost. Can we not say that these are frills? Would people accept non-airconditioned service? Would we want to go back to the days where - we would not talk about rickety buses - buses with higher steps so that it is a bit more dangerous to our senior citizens and ladies going to work in high heels find it very inconvenient? I do not think that that is accepted. And, even if we want to do it now, the cost of public transport service cannot be changed overnight. From 1980, when the cost of the bus ranged around $70,000-$80,000, it is now $270,000. So, even if we want to change these buses, it cannot be done overnight.

Sir, I suggest that for issues like this, we should really be looking at it on a more balanced basis, and perhaps seek a long-term view. Close collaboration between LTA, PTC and public transport operators is definitely required to contain cost. I believe that commuters must also be brought into this and make them a partner of this scheme, to decide on the standard of service required and therefore the related cost, so that when adjustments are to be made, they can better understand why these changes are needed and why these adjustments are made. In difficult times like this, sometimes it is really difficult to explain to those who are affected financially. But I think it is gratifying to learn in this House that Government has made sure that those who are badly hit are being provided for. So, I think it is now up to us really to have a good reasoning on this round of fare increases and try to explain to our constituents so that they can also understand, perhaps not fully accept, why it has to be done.

Sir, I would like to touch upon one other issue, that of cycling, as brought up by Ms Irene Ng. I declare my interest as Chairman of the Singapore Sports Council. Sir, I think it is a good idea, and I think cycling is a good sport that we should promote. But creating a cycling lane is not a good solution, as it would also take up road space. One example is China. China has 700 million cyclists and now the authorities are having a hard time trying to do away with cycling lanes, and I do not think we should really be going in that direction. I would suggest that more park connectors be built so that cycling can be promoted as a healthy exercise.

Sir, on this note, I oppose the Motion.

Dr Tan Boon Wan (Ang Mo Kio): Sir, thank you for allowing me to join in this debate. We are amidst difficult times. And, like my fellow Members of the House, I understand and feel the distress of the people over price increases that raise the cost of living. I am glad for this Motion, for it provides an opportunity for many of us to reflect the concerns of our constituents. As we saw yesterday, and no doubt, we will see today as well, my colleagues do quickly seize the opportunity to express their views and to reflect the sentiments on the ground. My residents have also expressed to me their concerns and unhappiness over various increases, and in particular, the recent transport fare increase. The sentiment of the people is clear.

While I appreciate the Motion before the House for providing the opportunity to discuss the issue of the recent transport fare increases, I do not agree with it in its entirety. First, the Motion reflected the Prime Minister's appreciation of 17th June that this is not the best time to increase fares. However, the Prime Minister at the same occasion also said that the principle of small increases is right. This was left out. This is an important omission and I felt ought to be corrected, so that the first statement by the Prime Minister is placed in its proper and complete context.

Second, as noted by several colleagues who spoke earlier, the PTC is a body set up by Parliament, specifically to make decisions regarding public transport. It has performed its duties, and unless we are convinced that it is derelict in carrying out its duties, I wonder if it is wise for the House to require it to review a specific decision that it made, with the purpose of getting it to change its mind on this decision. Sir, with this in mind, I am moving an amendment to the Motion before the House. I have taken the liberty to ask the Clerk of Parliament to make copies of this amendment, which I would like to ask your permission to be distributed to the Members of the House.

Mr Speaker: All right. The Clerk will distribute the notice of amendment. [Copies of amendment distributed to hon. Members.] Could you move your amendment, Dr Tan?

Dr Tan Boon Wan: Sir, I beg to move the amendment as follows:

(1) In line 3, to leave out the word "and";

(2) In line 5, after the word "fares", to insert the words, "and noting his support for the principle of Public Transport Council granting small increases"; and

(3) In lines 5 and 6, to leave out the words, "to review its decision on the increase in public transport fares", and there to insert the words, "when reviewing requests for fare increases, to take into consideration relevant factors such as the affordability of the commuters and the viability of the public transport operators.".

Sir, there is really no good time to increase fares. Nobody likes to pay more, even if one can afford it. It is in the nature of things. However, I agree with PM and my fellow Members, who have spoken earlier, that this is not the best time to increase fares. The economy is down, many are out of job and the future is still uncertain, though it is beginning to brighten up. If my income were reduced and uncertain, I would certainly wish that the cost of living would not rise, and even hope that it would be reduced. Hence, where expenditure can be deferred to keep cost and, hence, fares down, it should be done. But, alas, life does not stop just because the economy is bad. It continues. So some costs continue to rise - maintenance must be carried out, old equipment need to be replaced, and new equipment need to be purchased, if we want to continue to have a good public transport system. Fares may thus need to rise for all these necessary activities to be carried out. So, even in difficult times, as now, we have also to think of the future. For what we do today affect the lives of our children tomorrow. The decisions that bus companies make to-day affect the services they can deliver tomorrow. What sort of bus services do our children deserve? And what do we leave them with? So, while the Prime Minister agreed that this is not the best time to increase fares, he also recognised the need to increase fares to enable critical activities that must be carried out if we are to maintain the viability of the public transport system. He thus supports increases in small steps that are affordable and less painful.

I recall past instances, other than transport fares, when delay and reluctance deferred price increases until the inevitable. When the prices were increased, the increases were large, and were very painful. There were then calls for increases in small steps, to occur more frequently, so as to spread out the pain. This is what is being done now - a small increase in fares. But, alas, our memory is short.

Sir, the issue of fare increase is inherently a situation of conflict. The public dislikes fares to increase, but public transport operators need it to remain viable. Parliament, in its wisdom has delegated this unenviable task of approving fare increases to the Public Transport Council. In the debate on the PTC Bill in 1987, the House made it clear to the PTC that they must consider both the welfare of the people and the viability of the bus companies, to ensure the availability of a good public transport system in the long term interest of the people. As I said earlier, this situation is inherently conflicting. To carry out the difficult task of the PTC, able, capable, fair-minded and honourable people were appointed to the Council. Hence, since 1987, fare increases have come before the PTC. But, today, there is a Motion before this House asking the PTC to review its decision on the recent fare increases. We are treading on uncomfortable, if not dangerous, water. We formed a body and delegated to it responsibilities. The body has discharged its responsibilities, and we are questioning its decision in public, with the intention of getting it to change its mind. The public and the world will look at this House and wonder if we made good, well-considered decisions, and abide by them. The question would be asked, is this House to be trusted? People who are asked to assume positions in our institutions will wonder if their decisions would be appreciated and supported. They will ask whether they will be abandoned when the goings get tough. We must be very wary of demeaning our institutions. We must not sacrifice our institutions for expediency.

Sir, we should carefully study the explanation given by the PTC for approving the fare increase. If we believe that they had done the work fairly and properly, we should courageously support its decision and take on the more difficult and unpleasant task of explaining and convincing our people of the correctness of the decision. It is easier to support popular decisions than to support decisions that are right, but painful. But for the long-term interest of the country and people, we must do what is right and good. I personally believe that with regard to the fare increases, including the current one, that have come before the PTC, it has dutifully performed the task delegated to it by Parliament, within the framework and guidelines established. I would like to quote what Mr Eric Gwee, Chairman of PTC, said in regard to the decision to approve the recent fare increases:

"In reviewing the application by SBS, TIBS and SMRT, PTC tried to balance the need of public interest to be safeguarded and for public transport operators to remain financially viable. This year, the PTC has improved the process of scrutinising the bus and train operators' accounts and financial performance. PTC is satisfied that the operators have been prudent in containing costs and that they have not been profiteering at the expense of our commuters."

I share the sentiment of the other Boon Wan in the House, when he said yesterday that, "There is nothing wrong in criticising the decision of the PTC. They have a difficult job of balancing the long-term interests of commuters and the short-term effects on them. Inevitably, judgment has to be made. We can certainly disagree with PTC's judgment, as honest people would. But we cannot fault them for not being diligent."

Sir, I urge the PTC to always remember that its role is both important and sensitive and that it must carry out its duties conscientiously, properly and professionally, within the terms and reference that have been set for it, so that the public will continue to have confidence in its decision.

Finally, Sir, I also urge the Government to take heed of the feedback provided by Members of this House during this debate and from the people. Please listen to us.

Sir, I seek the support of the House on the amendment.

Mr Speaker: The Member has moved an amendment comprising three parts:

(1) In line 3, to leave out the word "and";

(2) In line 5, after the word "fares", to insert the words, "and noting his support for the principle of Public Transport Council granting small increases"; and

(3) In lines 5 and 6, to leave out the words, "to review its decision on the increase in public transport fares", and there to insert the words, "when reviewing requests for fare increases, to take into consideration relevant factors such as the viability of the public transport operators and affordability of the commuters".

The Question is now the amendment moved by Dr Tan

Boon Wan.

May I remind hon. Members that the debate and their speeches should be restricted to the amendment. But the debate may include both the words proposed to be left out, ie, deleted, and the words proposed to be inserted or added.

Dr Tan Boon Wan: Mr Speaker, Sir, the order of the wordings is reversed. I said, "the affordability of the commuters" followed by "the viability of the public transport operators".

Mr Speaker: I read it from your notice of amendment which has been circulated to Members. Mr Iswaran.

Mr S. Iswaran (West Coast): Mr Speaker, Sir, thank you for allowing me to join in this debate. I rise in support of the motion that has just been moved by the Member for Ang Mo Kio GRC, Dr Tan Boon Wan.

It injects a note of balance, a note of circumspection, to this debate which is warranted, given the heat that has been generated in this House in the course of the last day-and-a-half of debates. Allow me to elaborate.

Yesterday, I was moved significantly by Mr Tan and Dr Tan's impassioned plea on behalf of Singaporeans and commuters on why these fare increases are ill-timed, unwelcome and inconvenient. But, having said that, I also want to say that my personal experience with this has been the same. I have received a lot of feedback from constituents and others on this increase and why it is not welcomed. The timing is part of an unholy confluence of factors - economic downturn and retrenchments. At this time, a fare increase for buses, no matter how small, is, in a sense, the proverbial straw that breaks the camel's back.

But, Sir, even as this House has the responsibility to voice the concerns of Singaporeans and address those issues in a comprehensive way, we equally have the obligation to ensure that the debate encompasses the total perspective of the issue. I think the wave of public opinion is great in this debate. Many Singaporeans are agitated about this. But it would be a disservice to the quality of the debate and the final policy or conclusion we draw if we were to only focus on that aspect of this issue. In the course of this debate, the terms "fair and reasonable" have cropped up many times. And, indeed, I think all of us would like to be fair and reasonable and be seen to be fair and reasonable. But the question, I suppose, is "fair" from whose point of view and "reasonable" from what perspective? Let me try to broaden the perspective a little to show what I mean.

I am looking at it from the perspective of the company, and here I would like to make a declaration. I am an employee of Temasek Holdings, which is a major shareholder of SMRT, but I have no direct interest in any of the public transport operators. Is SMRT such a laggard in comparison to similar companies, ie, transport operators, in other parts of the world? Yesterday, there was a very sharp contrast drawn between SMRT and MTR in Hong Kong. Mr Tan Soo Khoon gave us many examples of why MTR in Hong Kong was such an innovative transport operator, introducing many interesting dimensions to its service. If I recall correctly, some examples were: if one takes 10 rides, then he gets a free lunch or a free dinner. And, also, when a new line was introduced, there was no fare increase. In fact, it was a fare decrease. So why can the SMRT not be like that? Indeed, I was quite troubled and puzzled by that, and I thought this warrants a little bit more investigation. So, I dug up a little more data on this. It is interesting. As always, there is no such thing as a free lunch, and let me tell Members why.

MTR is actually better described as a property company than a transport company. It owns the land above its stations and around its stations. 70-80% of MTR's profits come from its property business, not related to its rail business. What does that mean? MTR has to promote ridership on its lines. Why? Because that is what will increase the value of its main business, which is the property business. And MTR will therefore cross-subsidise from its property business to the rail business. Indeed, we could infer that this is what is happening here. Is that a right business strategy? Probably from MTR's point of view, yes, because, overall, it is able to continue to improve its profitability. But the analogy with SMRT then is perhaps unfair, because SMRT, by comparison, is a pure transport operator. 90% of SMRT's revenue comes from the train, bus and taxi type services, and 70-80% of its profits comes from the same business. So the exact reverse, if you like, of what MTR has. SMRT has very little scope to cross-subsidise. There is nothing to cross-subsidise from. Really, at the end of day, the only return it gets is from its fares, and just to be complete, with a little bit of rental and advertising income of about 10%.

Sir, the next question, from a broader perspective, is: Is SMRT profiteering? It is a listed company. Is the company rewarding its shareholders unfairly? Again, I think it was the Non-Constituency Member, Mr Steve Chia, who raised this question rather rhetorically, if not theatrically: "Isn't making more than $50 million profit enough?" That is a good question. Let us look at the issues.

What kind of investment product or share is SMRT share? Think about it. The growth prospects of this company are very constrained. Ridership and fare increases are the only real factors that would drive its top line growth. I do not want to talk like an analyst, but since we have totted up a lot of figures and financial data, I think we need to look at these in totality.

The best proxy for growth in this company is really population growth, which means, at best, it is going to achieve 2-3%. In fact, last year, SMRT achieved, I think, 0.6% growth, in fact, lower than you would think to be the average. So this is not a company whose stocks you buy because you expect this wild run in its share price, because it is going to become very valuable and you get capital appreciation.

There is another dimension to this. SMRT is like any transport company whose fare structures are regulated and have a regulatory risk because, at the end of the day, the revenue is affected fundamentally by policy decisions. I do not think I need to belabour the point about the regulatory risk because the debate in this House on the fare increase is ample evidence of what that risk is all about.

So, why invest in SMRT shares? What is the benefit? If you ask fund managers or financial analysts, they will tell you that it is what you call a counter-cyclical defensive stock. What does it mean? Basically, it is a nice stock to have in your portfolio, so that when your tech stocks are bombing out, all those high growth stories are now fizzling out, you still have some stocks in your portfolio that continue to offer you a low but steady growth rate and a decent rate of return, either through dividend pay-outs or from very small capital appreciation. It is a kind of stock where when the economy goes up, it will not go up as fast. But when the economy goes down, it will not go down as fast either. That is the value of stocks like this, low beta stocks. So, it is not a stock you hold for capital appreciation.

If you want to look at SMRT shares, in July 2000 when it was listed, its price was 61 cents, and yesterday when I checked, it was about 68-68.5 cents. It is not a fantastic growth. At the end of day, it is the dividend yield that it will pay. So, are they profiteering and rewarding the shareholders unfairly? What is the dividend yield of SMRT? The current dividend yield is 4.1%, and this 4.1% is gross of tax. It is gross, before you take into account tax. So, if you are on the top tax bracket, you have to knock off another 20-odd percent after tax under the new tax regime, or lower for the lower tiers.

Let us compare that 4.1% dividend yield with some less risky products. For 10-year Government bonds, the yield is 3.5%. If you look at the LTA bonds, the yield is 3.7%. So, when you compare that with what SMRT shares give as a dividend yield, is it that unreasonable for the risk that the shareholders have to bear? We can also compare this dividend yield with utilities companies around the world - US, Japan, UK, etc. Because, let us face it, it is an international market, you do not put money in SMRT, you can put it in the same kind of stock elsewhere in the world. The interesting result is that the range for dividend yields for utilities counters is between 3.5-6.5%. That means SMRT's dividend yield rate is not exorbitant. It is within the industry's norms and, if anything, at the lower end of the industry range.

Sir, there were a lot of other points that can be raised on the financial front. I do not want to go into that and a lot of details now. But why go into all these? Why this financial comparison? What is so important about it? SMRT is a listed company. We can debate the merits of whether it is good to have public transport operators as listed companies or not, but that is a separate issue. We should not vilify a listed company which is basically competing in the market not just with other operators and so on, but also for investor funds. If you want to continue to invest in improvements to rolling stock and other innovations, there are only two sources of funding, either the profit you make in your internal financing, or you get it from outside, equity or debt. And if they do not achieve a reasonable rate of return and offer a reasonable yield, who is going to put money in SMRT? Mr Ravindran says, "Well, if they do not get it, they can go and raise money outside by issuing shares." But the question is, who will subscribe to those shares? Because, at the end of the day, the comparison will be made on an international basis. So, we have to be realistic.

I am not defending the fare increase per se. But in the heat of the discussion and argument, let us not throw the baby out with the bath-water and start vilifying institutions and companies unfairly. I was reflecting on this last night. If SMRT's profitability goes down, then we will have another debate in this House saying, "You see, this is the GLC that is under performing." And I know many Members of this House would champion that line. If SMRT's profitability goes up, there will be another line, precisely along what we are talking about, that it is making money at the expense of Singaporeans. So it is a no-win situation.

Sir, ultimately, if we pursue this kind of logic, it is not going to be helpful for Singapore, Singaporeans or, for that matter, our transport companies and our transport system. So, I was trying to inject that sense of reality, just to create a balance in the thinking. Let us not get carried away without some reflection on the broader issues.

Sir, I would say that the amendment to the Motion that has been moved is a fair one. It balances the issues, and the Member has pointed out clearly why he is doing so. I have been thinking about whether we should really be asking PTC to review its decision. Let me tell Members that the best thing that can happen now is, yes, for the fares to be reduced, or restored to the original position. I think all of us would be very happy about that. It is an easy decision. The question is: is that the right decision? Dr Tan Boon Wan has elaborated on the point, and I would just reinforce it. The first is the issue of the integrity of the PTC. We need to distinguish between the process and the outcome. We may not like the outcome, fine. But you do not undermine the process unnecessarily. Let us go back, revisit the process that led to this outcome and see how it can be improved. But once we start tinkering with everything at the same time, we create uncertainty in people's minds.

Why would any self-respecting individual want to serve on the PTC, if the concerted view of the PTC is subject to parliamentary review, Executive review, public opinion review, and so on, and then they are forced to recant? Where is the credibility when the next time they make an announcement, whether it is a fare reduction or fare increase? How would they defend their position?

The other part is the message we would send if we do compel this fare reduction after it has been announced. It goes to the heart of the issue of how we would be perceived as a country, and a system within which to do business. If we have capricious changes in policy, or specific policy decision, because of this sort of public opinion, then I think the regulatory risk premium, that I talked about earlier, would go up significantly in Singapore. But does that mean we do nothing? I am not saying that. And I do not want to be misinterpreted. I think there is a lot we can do. But the amendment that has been moved by the Member which says, first, it drops the need for the PTC to review its specific recommendation, and instead focuses on the process where, in making its decision, it takes into account all factors and, in particular, viability of the operators and the affordability of the commuters. That is a more productive, long-term solution that this House should be endorsing.

On that score, in terms of the process, a lot has been said about what we can do to improve and change, and I offer a few suggestions. On the composition, I do believe that the PTC's composition can be improved. Whilst having public transport operators as members of the PTC may not necessarily, in any way, have a conflict, because they excuse themselves from critical decision points. There is still the issue of perception. And for that reason alone, we should leave them out of it and let them come in as experts, or as presenters of their point of view.

There has been another suggestion in some quarters, where maybe we bring in commuters themselves into the PTC. I have trouble with that, as it is the exact analogue of the public transport operators, but on the other side. If we cannot have a transport operator who stands to benefit from a fare increase on the Council, then can we justify having commuters who stand to benefit from a fare reduction on the Council as well? I think there is a contradiction here.

What we ought to have is a Public Transport Council made up of experts from different areas, whether it is financial experts, transport industry experts and maybe those with prior experience in the industry, so that when the deliberations occur, it is a considered final opinion, drawing on a wide range of expertise. I do believe the PTC's deliberations can also be more transparent. Because, at the end of the day, people do want to know why and, by this, I mean both commuters as well as transport operators, how they arrive at their decision, and that will help raise the level of understanding and debate.

On the issue of formula, CPI + X, I would like to know how productivity factors are encapsulated in this formula. The Senior Minister of State yesterday alluded to this, but some clarification is necessary. Because on the face of it, it looks like you have got a total insulation from cost increases and you get the clear increase in nominal prices without any adjustment, or requirement to improve your productivity. And, yet, I think this is not the case. This needs to be brought out in the open so that people understand this clearly that there is already, if there is not then there should be, a productivity discount to this formula.

But, ultimately, Sir, we can talk about all this tinkering with the process. I feel the best solution is still to introduce greater competition in our public transport system, particularly perhaps in the bus area, if we cannot do it in the train system. Because then, we will avoid issues of how do you fix the price, are you profiteering, and so on. Because the market will lead to straight competition, and there should be an element of internal correction within the market. Many Members have drawn the analogy with the telecommunications sector and others. I know there are differences between transportation and telecommunications, and so on. But at the end of the day, we do not realise the benefits of competition until we have it. And then, it becomes very obvious. Why did we not do this before? I think we ought to try it, if not in a total way, then in some measured manner.

Finally, Sir, on the issue of broader Government charges, the Government should make an effort not to over burden Singaporeans at this time. I fully endorse that. There is an element of cynicism out there. They think that the Government charges go through a kind of political Circadian rhythm. You start after the elections and rates go up, and then around the middle of the period, it stays steady, and then towards the end of the five-year term, there is an inverse performance, either rates go down, or they may not go down, but other forms of compensation kick in. This might be because we have a range of various Government bodies who are all run by people who are thinking ahead and trying to ensure that the Ministers do not have a tough time. But perhaps we ought to take a "more hands" approach on this and say, "Let's look at how we can actually space this out and manage this as a total impact." Because that is the crux of the issue here today. The public transport fare increases and the Public Transport Council, as Mr Tan put it yesterday, have become lightning rods, but they are not the problem. The issue is broader and it has just become a convenient point of reference, or scapegoats. And I think we should ensure that we do not fall into that trap again by addressing this issue comprehensively.

I would suggest one other point that we could consider - whether some of the schemes which we already have, like the Economic Downturn Relief Scheme and there is a scheme through the CCCs for those who are affected by the GST, perhaps we should give more flexibility to the grassroots organisations on the ground, so that for those who are unduly affected by these transport fare increases, they too should be eligible for some form of assistance.

Sir, on that note, I support the amendment moved by the Member.

Mdm Cynthia Phua (Aljunied): Mr Speaker, Sir, I rise to support the hon. Member, Dr Tan Boon Wan's proposed amendments and his call for the PTC to be transparent in its review for fare increases, and to specifically take into consideration the affordability of the commuters for the review of the affordable fare, which is one of the PTC's objectives of safeguarding our public interest. Such an amendment would serve the public interest better, a concrete step towards a longer-term view, as it takes a harder look at the fundamental considerations of the measurement of the affordable fare.

Presently, the affordable fare is indirectly measured using a formula that was recommended seven years ago, consisting of cost data, ie, the CPI + X factor. Both are cost factors of the transport network operators from which the fare is computed and levied on to the general public. Quoting Senior Minister of State, Mr Khaw Boon Wan's explanation, within this framework of the formula, the PTC decides what is a reasonable rate of increase which is commensurate with the affordability level of the population.

Affordability is a relative term. The cost increase should be measured in relation to the income. The present formula does not consider the income of the commuters directly, especially during this economic downturn period. When the economy is reasonably good, one can argue that the annual increase in income would have been taken into account relative to the CPI. For example, the public service sector has always taken into account the CPI to consider their salary increases yearly. When the increases in income are higher than the cost, it would probably have taken into account that the commuters are able to afford the additional cost.

The PTC has argued that this increase is only a very small increase, and has then allowed it. But it is the relative increase in cost and income that should be the issue. The lowering of the income bar and the overall increase to the cost of transportation result in an increase in the cost to income ratio of the commuters. But in the present state of the economy, most commuters have either no increase in the income for the past years or suffered a pay cut, or are even out of job. Some are even living day by day in fear of losing their job because of the closing down of the companies. These small increases would have reached the threshold of pain.

To understand the commuters' threshold of pain is to determine the composition of cost in relation to the income. Although, again, Senior Minister of State, Mr Khaw Boon Wan, has stated that transport fares have lagged behind wage growth by a big margin over a period of 15 years, we are looking at the present scenario in this economic downturn where income has been lowered, the transport fare relative to the income would indeed have been increased even with a small increase in the fares.

Sir, I support the hon. Member Mr Ravindran's call for the amount of transport expenses in relation to the average income of the commuters to be made known. The threshold of pain of the commuters is further compounded by the string of increases of the other economic factors adding to the cost of the commuters, ie, the increase in refuse collection fees in May, the simultaneous increase in utilities rates and transport fare, the coming September increases in carpark charges and factors affecting the income of the commuters, eg, the coming review of the CPF rates. In addition, the Economic Restructuring Shares, which are to help our people in overcoming the poor economic situation, have not been received yet, as they are only scheduled for next year.

It is timely for the PTC to be transparent with the public on the factors that are used as their bases to determine this affordable fare. Listening to the Minister's reply, none had explained how the affordability fare was determined and the list of the factors that were taken into consideration. Dr Tan's timely amendment has highlighted the need for the PTC to be transparent in the evaluation of this affordable fare, in view of the transport companies being in a privileged position - a ready pool of no-choice commuters, free infrastructure costs, minimum competition and good surpluses.

To conclude, I would like to urge the PTC to readily take into consideration the call of the Members in this House in the amended Motion to take into account the affordability of the commuters and the unemployment situation in relation to the current economic situation in reviewing the affordable fare. In view of the transport companies' privileged position of no competition and the no-choice situation of the commuters, we would like to urge the PTC to make known and be transparent on the factors considered when evaluating the affordable fare.

Sir, I support the amendments to the Motion.

Mr Ong Ah Heng (Nee Soon Central): (In Mandarin): Mr Speaker, Sir, thank you for allowing me to take part in this debate. I must declare that I am the Executive Secretary of the Singapore Transport Workers' Union. We have some 12,000 workers working in the transport sector.

Yesterday, we have heard from the PAP and Opposition MPs the sentiments and feelings of the middle and lower income group people in Singapore. If we go to the market-place and coffee shops, we will find that what these MPs said in this House is true and correct. What amazes me is that our PAP Members seem to be more energetic and incisive than the Opposition members when they made these points. If we send people like Mr Tan Soo Khoon and Dr Tan Cheng Bock to contest in the opposition wards in the next General Election, I am afraid the incumbents will not find their way back to this Chamber at the next Parliament. Our PAP Members are more mature. They will be able to contest and win all the single-member wards in future elections.

We know that price increases are never welcomed by the people. As I live in a HDB flat, I have a deep understanding of how the people there are feeling about the daily matters. As I am living among them, I meet them when I go to work and come back from work. These lower income people are unhappy, and their dissatisfaction is not just confined to this round of bus fare increase. In the coffee shops, many people commented, "The Government allows the officials to set fire, but ordinary citizens are not even allowed to light a lantern." Increase in refuse collection fees, increase in car park charges, increase in GST, and what else do we have? Yet, when the hawkers were to increase their prices, the Government sends the Chan Soo Sen Committee to go after their blood.

We must look at the Singapore political situation in a calm and objective manner. We must apply our political EQ or emotional quotient. Our PAP leadership is not stupid. They are aware of the feelings of the people. Many of our grassroots leaders are well educated. In the wards of the Ministers, many grassroots leaders are professionals. They understand what is going on at grassroots level. But, we know that in many Latin-American countries, during the election campaign, the politicians would make a lot of promises to their people to win votes. Then, after the election, if they are fortunate enough to be returned to power, in order to keep faith with the people and to fulfil their promises, they would hand out all sorts of goodies. In the process, they clear out the nation's coffers. When their term expires, the country is bankrupt and heavily in debt. Is this the kind of country we want?

We know that every five years, the PAP must face the people in a General Election and seek a fresh mandate from them. "Who would do things so that the people would not elect them in the next five years' time?" I talked to the people in the coffee shops. A lot of them are not happy with the Government's decision to allow the fare hike. I asked them if we were to hold a General Election now would the PAP win. They replied, "Oh, the PAP will still win the elections." Why? This is because they know that the PAP Government is the only one that ticks in Singapore.

Yet, people are not happy. These price increases had led to emotional upsets. It is a question of timing. We have to exercise our political wisdom to decide whether what we are doing will be good for our nation. If we promise people that there will be no price and fee increases, what will happen? Will our public transport system be as good as it is today?

The Member of Parliament for Hougang advocated for a state-owned bus company. When I was young, I had to take the Singapore Traction Company (STC) buses to school. This was a bus company operated by the Government. In the end, the company went bust and had to close down. Why should the Government run a losing business and waste our surpluses and reserves? We should leave it to the experts and professionals to run it at a profit and benefit the people - and the Government. As such, I feel that we should adopt a calm and balanced attitude on this issue of public transport fare increase.

Mr Speaker, Sir, our population is small, and the market for public transport is very limited. Two transport operators are facing the possibility of losses. If we allow five or six companies to compete, can we make sure that they will reduce fares? Our commuter base is small. We have to maintain our buses. If we allow more companies to operate, can the companies have the economy of scale to operate at a profit and remain viable? I have read in the papers that in Ang Mo Kio, Mr Wee Siew Kim provided buses for his constituents to go to the market. Every week, he incurs a cost of $500. I applaud his effort and hope that he can sustain till the next election in 2007.

Bus workers are like you and me. They would also want to enjoy pay increases. They are lowly educated and elderly. They have to support their families. Should they not also enjoy bonuses and pay increases so as to cover their family expenses? Every day, they work for more than 12 hours and every now and then they have to face complaints from the commuters. They have to learn new skills, especially those drivers who are 50 and 60, they have to continue to upgrade their skills as public transport system goes IT.

How to avoid fare increases? Yes, we can do that. Today, the average waiting period for a bus is three minutes during peak hours. In order to meet this target, we have to operate 20 buses on one route during the peak period. If the commuters are willing to wait six minutes instead of three, we can reduce the number of buses operating on the route from 20 to 10. This will translate into savings in capital investment and the subsequent depreciation charges on 10 buses. With two drivers taking turns to operate each bus, this will also mean that we will reduce the cost of employing 20 drivers. The question is, "Are the commuters prepared to wait for 6 minutes for a bus during the peak periods?" It is already the case that sometimes when the buses are caught in traffic jam and arrive one or two minutes late, the commuters would complain and even abuse the driver by asking, "Why so late!" And you want them to wait for six minutes instead of three?

Furthermore, the statutory life-span of a bus is 15 years. Why do we not extend it to 20 years? If we allow a bus to operate for 20 years, then bus companies will save on depreciation, and asset replacement cost. If Singaporeans feel that we want to enjoy a world-class transport system, they must be prepared to pay. In the 60s and 70s, it was not uncommon to wait for half an hour for a bus. I had to get up before dawn to make sure I catch a bus before 6.30 am in order to reach school on time. The bus stop was just a post with a plate attached displaying the bus number. There is no shelter or seats. Sometimes, while I was standing at the bus stop waiting for the bus to arrive, it suddenly rained. I had to run back home to change my drenched school uniform and come out again with a rain-coat or an umbrella. The buses were usually packed. If you board the bus just a couple of stops from the depot, you would be lucky to be able to board the bus, let alone getting a seat. If Singaporeans are prepared to go back to the standards and conditions of public buses in the 1960s and 70s, then I think it is possible for us to wait for another 3-4 years before it would be necessary to raise the bus fares again. We know what Singaporeans want. Any fare or price increase is surely not welcomed. But we have to be realistic.

One constituent of mine thought he struck a bargain when he bought three pairs of socks for only $1 at the pasar malam organised by the Residents' Committee. But these socks shrank and tore when they were washed two days later. He came to me and complained, "Why you people sell this type of lousy things at your pasar malam?" Yes, they were cheap and affordable. But are they the sort of things you want?

If the Government says the bus can be used for 20 years and that people are prepared to wait for 10-20 minutes, as the Executive Secretary of the Transport Workers' Union, I can assure you that in the next three or four years, there would not be any need for fare increase. However, there will be complaints from the commuters.

My constituency is near to the Yishun Interchange. One night, at the meet-the-people session, one constituent told me there was a thunderstorm a few days ago. His son was drenched by the heavy downpour. He remarked, "How could you say that our transport system is world-class when our bus interchange is so badly designed? Why can we not offer better shelter from the weather at the bus interchange?"

As for the issue on the airconditioned buses or non-airconditioned buses, it is a matter of choice and opinion. Today, there are many people who would prefer and do not mind paying a bit more to travel in the comfort of an airconditioned bus. They absolutely detest travelling in a non-airconditioned bus. We have to exercise our political wisdom when dealing with the issue on fare increase.

This time round, the issue on fare increase has been brought up and debated vigorously in Parliament. If Parliament has to convene for every proposed price increase, then our MPs will have to become full-time MPs and come to Parliament every day to discuss these matters, just like those in Taiwan. I know that all our Members are either professionals or successful business people. It is not easy to get 84 people to become part-time parliamentarians. If we are going to get 84 professionals and successful entrepreneurs to give up their career and business to serve as full-time MPs, it will be almost impossible. Then, are we prepared to accept lesser people to come in here? I do not think so. I hope that everyone of us would look at this matter in a calm manner. Much as we want to please the people, we cannot please all the people all the time. There are bound to be some policies which are unpopular with the people

Last night, when I was talking to my residents at the coffee shop, I told them that we should be more concerned with Malaysia's intention to increase the price of water they supply to us rather than the fare increase. They all agreed. They said, "Yes, this is more important. Parliament should use their time to discuss how we are going to fight the Malaysians." However, today, we are spending a long time talking about the three-cent to ten-cent fare hike.

Just now, Mr Ng Ser Miang, our NMP, explained the problems faced by the bus operators. Mr Ng is an honourable man. I respect him, although sometimes, I had heated arguments with him because I represent the union and he was on the management side. Under the law, so long as we have enough votes, we can stage a strike. So, I used to tell him that if the management persists in treating us badly, and our workers cannot live a comfortable life, we would go on a strike. But do we want to see such a situation in Singapore? My counterparts in Taiwan told me that even the taxi drivers can go on strike. Every time they go on strike, they want us to give them some moral support for their industrial action.

If our workers cannot earn a decent living, then nobody would want to be bus drivers. Currently, approximately 30% of our bus drivers are not Singaporeans. In total, the two bus companies have vacancies for at least 200 drivers. Despite the grave unemployment situation in Singapore, there are some 200 vacancies for bus drivers that remain unfilled. I have been telling people, "If you are unemployed and want to become a bus driver, just come to me. I will get you the job. No need to write letters. No need to get referrals." It is a big difference from the situation 10-20 years ago. Nowadays, nobody wants to become a bus driver because the pay is not attractive. We have about 30% non-Singaporeans driving our buses.

Let us look into this matter squarely. Now, if all our people do not want to drive buses, if we have 80% bus drivers who are foreigners and if they do not maintain the bus properly, if the tyres are not properly secured, the lives of 50-odd passengers on the bus would be in jeopardy. If they are not Singaporeans, why should they work so hard to maintain the buses for you? Why should they be concerned with the lives and safety of the Singaporean commuters? By then, you would have to start worrying. Who would not want to feel secure and safe while travelling on public transportation? Our accident rate is the lowest in the whole of Asia. During the seventh month, the month of the hungry ghosts, our bus drivers would pray very hard at every bus depot hoping that there would not be any accident. They work very hard. If we want them to have a decent living, we have to give them decent wages. I think that is only fair.

If this small increase in bus fares can contribute to better standard of living for our bus drivers, I think it is worth it because we want to have a world-class transport system in Singapore. So, I hope that every Singaporean could clearly understand the situation. No government would like to go against the wishes of the people. Every government would wish to help its people, if not at least the people of the next generation. Of course, the bus drivers nowadays do not want their children to become bus drivers. Our Government has been forward-looking. We have to make sure that Singaporeans have a good future ahead. We cannot be so calculative and feel unhappy because of a slight fare increase.

At the media, we can see and read about the discontent of our people. Some people have written very sincerely and earnestly in the newspapers on the issue of fare increase. Like many older generation of Singaporeans have said: "Although life is difficult every day, we nevertheless manage to get by." The basic problem is that increase in bus fares, for that matter, any price increase, is always painful and unbearable.

More importantly, we must have enough water supply to stay alive. We want our Government to pool its resources to make sure we have the water supply we need. This is much more important and crucial than the debate on the 3-cent fare hike.

I support this amended motion.

Mr Wee Siew Kim (Ang Mo Kio): Sir, thank you for allowing me to speak on the Motion.

There is a lot of unhappiness and unease among the populace on the bus fare increase. But, surprisingly, while many may think that the grouse is about the quantum of increase, this is not merely the case. I agree with Dr Wang when he said that the majority of the people are not as upset about the 3-cent unit fare increase. To the embattled members of the PTC, within the constraints that they work under, this speaks well of the diligence that the PTC members had put into the exercise. I believe we should applaud their resolution in maintaining the long-term view through the principle of small step increases.

However, despite what the hon. Member, Mr Ong Ah Heng, said about not raising small issues in this Chamber - whether it is dirty toilets or bus services - we feel that we must address and bring up the unease. Let me just categorise the unease into two key areas, which are that of timing and process.

In terms of timing, there are two aspects. One is that of the macro, which is injecting an increase when most in the economic milieu are still smarting from the impact of the downturn, and have yet to taste the fruits of any improvements. Yes, as all may say, this is not the first time that there has been an increase in bus fares. And, yes, we would all agree that this would not be the last time either. But everyone knows the cry is, why do it now? Can it not wait another half a year? The general perception is that the rush in the increase seems to smell of more to come in other areas. Hence, more worrying is, what else is next?

This brings me to the second part of the timing issue, ie, that this issue comes on the heels of all the other announcements of escalations. As such, we are often confronted with the question - one come, all come, how come?

Next, the process. There is a perceived insensitivity on the part of the regulators, manifested in the outcry at the lack of time for feedback to be properly obtained. Secondly, there is a perceived opaqueness under which the decisions were arrived.

But all said and done, we must however realise that we do have an approach that worked before. The PTC and its independence must be preserved. While we look into the timing and the process, let us not destroy the very foundation that gives us the public transportation system that we have today, which we are extremely proud of.

Hence, to be constructive, rather than a review, I support Dr Tan's amendments which highlighted key factors that have to be taken into consideration. I would like to take this opportunity to make several suggestions.

First, the deliberations of the PTC should be on public record. In this way, people who are interested can satisfy themselves of the substance of the deliberations as well as the thought process. They are not uncaring. In this particular instance, what appears to be hiding behind the CPI + X formula for substantiating increases just would not do, especially where for most of the seven out of ten Singaporeans that are affected, they do not see any CPI increase in their incomes and their X could well be negative. While one can understand fully Senior Minister of State, Khaw Boon Wan's explanation, that the CPI +X is a strong motivator to the operator to push for productivity in the face of such an escalation ceiling, it would not be entirely out of place if we exact some concessions this time round. So, can we push the boundary?

The level of service quality and the attendant cost should also be based on what the bus commuting public want. Whether it is frills or no frills, let it be determined empirically. I know we have a system where people go to bus interchanges and from there, they go outwards. And my point about the Sengkang bus service is why stick to that? Why not offer point to point, which people want. Even in the airline industry, there is a struggle between hub and spoke, and point to point. You need not do point to point all day round. As for my market, I do not have a market, offer point to point at the time when people want to go to the market. So, you do not run it all day round. So, ask the commuters. Let it be determined empirically. It would seem that in the present economic context, the commuters may want our public transportation system just to be reliable. Regular intervals, good coverage and be safe. TVs and airconditioning on buses and interchanges, whoever pays for it, just would not get the thumbs up. It is very hard to accept that with airconditioning, operating cost would not go up. Just compare food court versus natural air kopi tiam prices, this would show up. Why not have a forum where the needs can be determined. While it may not satisfy every one all the time, at least there is a gauge of what the consumers want as determined by the travelling public for themselves, whether it is 8 minutes interval or 12 minutes interval. Let us not sweep all these under the banner of "rising expectations", because these can be managed. I believe people can accept that shorter intervals will mean more buses, more drivers and hence higher costs, especially in instances when increased frequency does not stimulate higher ridership. Just go to Shenton Way and ask some of the people in the high-rise buildings during lunch-time. They probably wait 8-10 minutes for the lift to get from the top floor to the bottom floor, and to get on a lift. Is that high expectation? Do we put in more elevators?

I re-read the public statements put up by the PTC last year when there was no direct price increase. At that time, it too had the dilemma of balancing operators' viability and commuters' interest. The increase was turned down. Yet, the operators made money. I think the argument is not whether the operators should be viable. There is no disagreement here. They must be viable. Rather, the question is whether enough has been done to eliminate wastage and drive productivity in order to reduce cost. And it will go a long way if Dr Amy Khor's request to see the compelling evidence of imminent non-viability is produced. That would silence many critics.

There should be some means of injecting competition, thereby subjecting the operators to even sharper cost discipline. And to echo Mr Ravindran's point, there must be in place alternative means of assurance and independent verification, if market forces are not fully in play.

In summary, the call is for more transparency in the process and better communications. In addition, service levels should be based on some market-based consumer derived benchmarks, and let them decide for themselves. And further, for more competition that would blunt the inexorable increase in cost. We need to tackle these issues as enhancement but, in the meantime, we must be reminded that we have a world-class public transportation system that we all ought to be proud of. Let us work together to enhance the pillars and the foundations on which they hang on, rather than undermine the very basis for the PTC's authority.

Sir, I support the amendments to the Motion.

Mr Zainudin Nordin (Bishan-Toa Payoh): Mr Speaker, Sir, I rise in support of the amendments proposed by the hon. Member for Ang Mo Kio GRC, Dr Tan Boon Wan.

I have to admit that after yesterday's animated debate that we saw in the House, it is not going to be easy to up the tempo but, nevertheless, Dr Tan Boon Wan has risen to give a reasonable and realistic touch to the original Motion. I would like to give my take on the proposed amendments and overall issue of the public transport fare.

Sir, in the proposed amendments, he has rightly taken into consideration PM Goh's support for the principle of PTC granting small increases. Similarly, he has put into context the concerns of the people in the present environment of uncertainty and economic slowdown by urging the Government to ensure public services remain affordable. These amendments are laudable and I think it should be supported.

Mr Speaker, Sir, we have heard over and over again in this House about the difficulties facing all Singaporeans at this moment. The depth of the impact of economic recession on the lives of our citizens is further emphasised by the recent announcement of more job losses and increases in the request for financial assistance. Sir, we cannot, and should not, under-estimate the effect of the slowdown in the global economy on their livelihood. Many of my constituents that I met during grassroots functions and block visits expressed the concerns and worry. With the perceived spate of increases in the charges for basic services, they are just waiting for the last straw that would break the camel's back. They are at a loss of what is happening. They view the recent increase in the bus fares as contradictory to the overall effort to lower cost and tighten their belts during these hard times. I believe that many Members have already expressed this eloquently, and I am just echoing their sentiments further.

On the other hand, Sir, we also have to admit that the job of the PTC is not an easy one. They have to find a balance between the public interest without undermining the viability of the transport provider. The framework of regulations that we have in place has worked well for us. But in our usual continuous quest to improve and to do things better, I think we should widen the representations in the PTC to include members from the unions, political leaders, grassroots leaders, and dare I suggest, student leaders too. Let us be fair and give credit where it is due. Several Members openly admitted that the PTC has done reasonably well. We all understood that PTC has been given the responsibility and the unenviable task to do, we should have the confidence on the members and not undermine their role and integrity. Furthermore, we should not judge them on a single unpopular decision, but rather look at their track record over the period of their existence. Let us improve the processes and make it more transparent, but not destroy PTC's position.

Mr Speaker, let me tell you an experience that marked me for a long time. This happened in 1986 when I was studying in Paris, France. It was my first winter and it was very, very cold. I was taking my usual train ride back to my hostel. I was about 3 kilometres away from the destination when the train stopped at the station. I noticed that it was longer than usual, but thought nothing of it. To my surprise and shock, after about ten minutes, there was an announcement that said that the train was not going to move because the driver had gone on an abrupt strike. Little did I realise that I was given a shock introduction to a common thing - things that happen in Paris, ie, public transport strike. Needless to say, I had to walk back to my hostel. Let us not take things for granted. We do have a good transport system. It may not be the best, but it works, albeit with some minor hiccups now and then. But it works. It is the envy of many people around the world. Does this happen by chance? No. Apart from the infrastructure that we have, there are thousands of public transport workers that run it and make it all happen for us everyday. Like Mdm Halimah, I would also like to thank them for their effort and good work. Let me also take this opportunity, Sir, to remind the transport providers that they have to continue to improve and not let the commuters down. This fare increase, though small it may be, is done during difficult times. Thus, transport providers must, in good faith, provide their best and reward their loyal commuters by some other innovative means.

Lastly, Sir, let me reiterate my support to the amendments to the Motion proposed by Dr Tan Boon Wan.

Dr Ong Seh Hong: (In Mandarin): Mr Speaker, Sir, thank you for allowing me to join in the debate. Today, I am going to tell a story about a song I heard in my car a few nights ago. In fact, this is a song, not a story. A lady had made a request for an old song entitled "A Couple's Duet" to be broadcast over the radio programme. This is a pretty old song, one that was recorded some 50-60 years ago. The song started with the wife singing, "Prices going up day by day, trouble and worries for us who have to pay and pay." She then went on to lament on how the prices of everything had been going up, how difficult it was for her to run the household. She complained that her husband was useless and unable to earn enough money to support her and the family. The husband then replied that he had his grievances too. He said the market was bad, his job was insecure and he had to bear with the whims and fancies of his employer. No pay rise, and his job could be lost anytime!

Mr Speaker, Sir, this is a very old song, some 50 years old, and it was about the chaotic situation in China at that time. I really do not know whether this lady had requested for this song that night by coincidence or by design. Of course, Singapore's economy is in a recession and unemployment rate is rising. But it is still not as bad as it was in China during those chaotic days. Yet, the lyrics of this song seem to reflect some of the worries of our people today.

We have heard speeches by many of our Members in the last two days. They are actually reflecting the sentiments of the people and this is something that we, as Members of Parliament, ought to do. Some Members have raised some suggestions. Here, I would thank Minister Mah and SMS Khaw for their clarifications. They have clarified some of the misunderstandings of our people and to let the people realise that the Government actually cares for them. And these policies are farsighted and the intention is good. Mr Ong Ah Heng has also very eloquently and emotionally analysed the various acts of the Government which were done with the interest of the people at heart. But why is it that this issue has aroused such a vigorous reaction by the people? I think it is because we have not done enough in our communication with our people, and we have not been thorough enough in explaining to our people. This is what Mr Arthur Fong had mentioned just now. In order to improve communication with our people, I think we have to look into various matters. Let me give Members an analysis in my capacity as a psychiatrist.

Actually if we want to treat our patient effectively, there are three steps to follow. First, we must build up a good doctor-patient relationship. Secondly, we have to understand his problems by talking to him and listening to him. Thirdly, we must set the treatment target and then give specific, feasible and well-paced treatment to the patient. How do we build up the relationship between the doctor and the patient? There are three important elements. First, the doctor must accept the patient. Second, he must support the patient and, thirdly, the doctor must assure the patient and build up his faith in the doctor. For example, many of my patients suffer from anxiety disorder. They have a lot of worries and bodily symptoms. They say, "Oh, I am going to have a heart attack now." "I have breathing difficulties, I cannot breathe," etc. More often than not, I would find nothing physiologically wrong with them. I know it is a matter of psychology. In fact, there is nothing wrong with them. They just worry themselves sick.

In a way, these patients are somewhat like the people in Singapore nowadays. They all understand the reason for this round of fare hike. To the people, this 3-cent or 5-cent increase is a potential worry. This is a signal of something more serious to come. We must learn to accept their concerns, give them the necessary support and reassurance, and then gradually build up their confidence. Only then can we change their mindset.

Secondly, we have to listen to their problems and understand their concerns, just like a doctor who has first to understand the problems of his patient before he would make a diagnosis. So, similarly, in this issue, we have to understand what are the things that the people are most concerned with. Their concern is not just the 3 cents or 5 cents. I disagree with Mr Ong Ah Heng when he said that this was a small matter. This is not just trivial as they may appear to be. In the minds of the people, there is this anxiety that an avalanche of price increases is forthcoming. On the one hand, the Government is asking them to exercise wage restraint; yet, on the other hand, there is a whole series of price increases. They feel that the burden is getting very heavy, too heavy for them to bear.

Thirdly, we must set up our treatment plan. This plan must be specific and feasible, and it must be a long-term plan to treat the disease. While we are dealing with this issue of fare adjustment, we want to see an all-win situation - a situation where everyone is a winner. We have to consider the interest of the people, the interest of the companies and the interest of the Government. The people's interest is that as mentioned by many of my parliamentary colleagues who spoke before me, quality service at reasonable prices. I shall not repeat this point.

Secondly, the companies' interests. Of course, the companies want to make profits. We cannot deny that. They must make profits, failing which they cannot survive. The only thing is that they must make their profits in a reasonable manner.

Thirdly, the Government's interest. That is our long-term target. We want to set up a world-class transport system. This is a long-term plan which must be a major premise in our consideration. At the same time, we should also maintain the independence and professionalism of the PTC, so that this element of check and balance in the operation of our public transport system will not be eroded.

Mr Speaker, Sir, I fully agree with the amended motion by Dr Tan Boon Wan requesting that PTC take a comprehensive, overall view of the situation whenever they consider any application for fare increase. Now, what the people want to know is whether or not the PTC has considered the present economic downturn and unemployment situation in Singapore. They want to know whether PTC has thoroughly examined the operation of the two companies, and whether they have made every attempt to improve productivity rather than pushing the burden to the commuters.

On this occasion, this round of fare increase, they have given labour cost as a factor for the increase. The public is not yet convinced of this. My colleagues have already spoken on this. I am not going to repeat it. Over the last 10 years or so, the PTC has done very much and, I am sure, they must have given this matter very full deliberation before they made this decision. Why is it that people still have so much worries about its decision? I feel that on this occasion, when dealing with this issue, perhaps the PTC has not perfected its communication skills with the people. I think if there is more consultation with the interested parties and with more thorough studies and better communication, I am sure we will not hear so much voices of discontent among the people.

I suggest that the Ministry of Transport consider improving the way in which PTC operates and the way it communicates with the people, so that people can see, hear and feel that the PTC is also protecting their interests. In addition, I also suggest that the Ministry of Transport consider appointing some bus or MRT commuters to the PTC to enhance the scope of its representation. This will increase the voices of the people in PTC. At the same time, whenever they make any major policy decision, they should adopt a more consultative approach to collect feedback from the people, so that they can increase its transparency.

Having spoken on the communication part of PTC, I would like to talk about the competitiveness in the public transport market. In our process to remake Singapore, we keep hearing this expression of "leaving no stone unturned". So in our public transport system, should we also take this opportunity to turn the stones? The present method of operation of public transport system has been used in Singapore for many years. It has raised the standard of our public transport to an enviable situation. We have a world-class transport system now. But now these two companies are each having a comfortable share of the pie. There is no competition between them. How are we going to improve their productivity? I, therefore, suggest that the Minister for Transport should give consideration to open up this market so as to improve the competitiveness of the operators. I hope that the Minister will not give the usual routine answer to this question.

If the methods proposed in the past are not feasible, it does not mean that there is no solution to it. I think if there is a will, there is a way. We should jump out of the old framework and think out of the box, and be more creative in the way we operate our public transport. There are so many talents in the Ministry of Transport. If we add this up with the feedback from the people, I am sure we could come up with a solution to effectively open up this market. I think this is very relevant to our situation, particularly to Singapore which embraces a free market economy. For example, the opening up of the communications market has led to a greater variety of services being provided by the operators and a higher quality of service.

If the Minister is worried that by opening up the public transport market, we will revert to the chaotic situation some 30 years ago, I do not think this would be the case. The environment nowadays is quite different. The quality and expectations of the people are higher now. I am sure that the Ministry of Transport is able to properly plan and arrange in such a way that the market can be opened up smoothly and successfully. I am sure there will be more pros than cons in the opening up of the public transport market. This will generate a check and balance over the operational cost of the players. In addition, it will also cause the companies to be more sensitive towards the feelings of the commuters.

Since I started my speech with the lyrics of a song, I would also end with the ending line of this song. It says, "With the cold winter coming to an end, there will come a gorgeous spring." So long as the people and the Government are willing to put in a concerted effort together, I am sure we will have a better and more beautiful spring ahead of us.

I support the amended motion.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.30 pm.

Sitting accordingly suspended at 3.10 pm until 3.30 pm. Sitting resumed at 3.30 pm