PUBLIC TRANSPORT COUNCIL (AMENDMENT) BILL

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PUBLIC TRANSPORT COUNCIL (AMENDMENT) BILL: Order for Second Reading read.

The Minister for Transport (Mr Yeo Cheow Tong): Sir, I beg to move, "That the Bill be now read a Second time."

Sir, this Bill seeks to amend the Public Transport Council Act (Chapter 259B).

The Public Transport Council (PTC) Act was first enacted in August 1987 to provide for the establishment of the Public Transport Council to license bus services and approve public transport fares.

The PTC Act was last amended in 1999. The Ministry and the PTC have reviewed the PTC Act in the light of developments in the public transport industry. The Bill provides for the following key amendments which will improve the regulation of the public transport industry:

(1) The introduction of a bus service operator licensing regime;

(2) The introduction of a regulatory regime for ticket payment services;

(3) The enhancement of the PTC's regulatory power to effect fare adjustments;

(4) The formalisation of the Fuel Equalisation Fund;

(5) The introduction of a penalty fee system to deter fare evasion; and

(6) Other amendments to improve the PTC's operational and regulatory effectiveness.

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I will elaborate on these areas and highlight key provisions in the Bill.

Bus service operator licensing regime

Sir, the PTC Act will be amended to provide for the introduction of a Bus Service Operator Licensing regime to regulate providers of basic scheduled public bus services at both the operator and network levels. Currently, the Act only empowers the PTC to license individual bus routes although, in practice, the PTC has been administratively imposing requirements and performance standards at the operator or network level.

Clause 11 empowers the PTC to license and regulate basic bus service operators, namely, SBS Transit and SMRT buses. The PTC already audits basic bus service operators on their service and performance standards, and will continue to review these standards, going forward. With the Bus Service Operator Licensing regime in place, PTC will be able to enforce such standards and licensing conditions by imposing financial penalties of up to $100,000 for any breach of conditions or standards and, in the extreme, by revoking the licence. The PTC will continue to regulate niche bus services, such as Scheme B and fare-charging condominium services, through the issuance of Bus Service Licences for individual routes.

These provisions in the Bill will further enhance the PTC's effectiveness in ensuring the quality of public bus services and protecting the interests of commuters. However, in enhancing the PTC's regulatory effectiveness, I would also emphasise that the PTC would be mindful to avoid over-regulation and unnecessarily raising compliance costs for bus service operators.

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Regulatory regime for ticket payment service

The Bill provides for the introduction of a regulatory regime for ticket payment services. The ez-link card system has become the predominant mode of payment for public transport since it was first introduced in 2002. To safeguard commuters' interests in areas, such as fees for usage of ez-link cards and service standards for sales, replacement, refund and top-up services, we will introduce a regulatory regime for ticket payment services.

The PTC will, therefore, expand its scope to also regulate the two major providers of ticket payment services, ie, EZ-Link Pte Ltd and Transit Link. Clause 11 empowers the PTC to impose and enforce ticket payment service requirements and standards. Similar to the Bus Service Operator Licensing Regime, the PTC will be able to enforce regulatory compliance through financial penalties of up to $100,000 or by revoking the licence.

To empower the PTC to effect fare adjustments

The amendments will empower the PTC to effect fare adjustments, if necessary. Members will recall that the Government accepted the fare review framework proposed by the Committee on Fare Review Mechanism in March this year. Under this framework, the PTC may initiate and direct fare adjustments in accordance with the fare adjustment formula, instead of being limited to considering applications by public transport operators to adjust fares. For example, the PTC may consider a downward adjustment which could take the form of a fare rebate or a fare reduction when the formula calls for it. Clause 13 amends the Act to empower

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the PTC to do so, and to set and enforce conditions of approval for fare adjustments in accordance with the fare adjustment formula, as set out in the Third Schedule.

To formalise the Fuel Equalisation Fund

The Bill provides for the formalisation of the Fuel Equalisation Fund. This Fund was set up in 1992 as an administrative mechanism to soften the impact of volatile fuel price fluctuations. Public transport operators are required to make an annual contribution to their Fund accounts when fuel or electricity prices are lower than the reference price. They can apply to the PTC to draw down this account in periods of sharp and transient increases of fuel prices to cushion them against higher operating costs.

To ensure that the PTOs continue to comply with the requirements on the Fuel Equalisation Fund, clause 11 inserts Part IVC to formalise the Fund. With this amendment, the PTC will have powers to enforce annual contributions to the fund and impose financial penalties for non-compliance.

A penalty fee system for failure to pay appropriate fares

The Bill provides for the introduction of a penalty fee system for fare evasion on bus and rail services. The current Act provides for fare evaders to be charged in court. Upon conviction, offenders are liable to a fine of up to $1,000 or a jail term not exceeding six months, or both. So this is already existing. As it is a drastic step to bring an offender to court, the PTC and the PTOs have not resorted to this provision. As such, without a provision for a penalty fare, today, ticket inspectors can only require fare evaders, when caught, to pay the correct fare. This, coupled with the very low possibility of being caught, does not provide much deterrence against cheating. Even in the

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case of rail, where passengers have to enter and exit through fare gates, operators have also encountered cases of underpayment, non-payment and abuse of concessions.

The two PTOs estimate that fare evasion on buses occurs on about 1.8% of passenger trips. Even though this figure may appear to be low, we should not condone fare evasion. Otherwise, the majority of commuters who pay the correct fares will be subsidising the small minority who abuse concession passes, avoid paying or intentionally underpay fares. Hence, to provide greater deterrence against fare evasion, the PTC will be introducing a penalty fee of $20 for the underpayment and non-payment of fares, and $50 for the abuse of fare concessions. Such a penalty fee system has already been implemented in cities, such as London and Sydney, where penalty fees of £20 and A$100 are imposed respectively.

Clause 14 inserts Part VA to empower PTC to set penalty fees and regulate the imposition and enforcement of penalty fees. The PTC, with the approval of the Minister, will appoint a select group of employees from the PTOs as Public Transport Officials

to check for fare evasion, and to collect the penalty fees, if applicable.

I would like to highlight that Part VA is formulated with a balanced and calibrated approach, and with appropriate safeguards to preserve the commuters' rights. Commuters will be able to appeal to the PTC if they feel that the penalty fee has been unjustly imposed. Fare evasion will constitute an offence only if a fare evader refuses to pay the penalty fee. Fare evaders who refuse to pay the penalty fee can be subject to a composition fine of up to $500 or ultimately face court action. Offenders convicted in court for the first time will be liable to pay a court fine not exceeding $1,000. Repeat and recal

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citrant offenders will be liable, upon conviction, for fines of up to $2,000 or up to six months' imprisonment or both. While the penalty fee system will be a new measure, as I had mentioned earlier, court fines and imprisonment for fare defaulters are not new, as they are already provided for in the current PTC Act.

The PTC will work out the operational details of the penalty fee system, for implementation early next year. The public will be given ample notice prior to the implementation. The PTC will provide more details in due course.

Sir, some members of the public have commented that since we are providing for penalties for fare evasion, penalties should also be imposed on the transport operators for over-charging. Sir, overcharging occurs when system faults on trunk bus services result in incorrect fare stages being updated. This is not a deliberate attempt by the operators to cheat commuters. In fact, depending on whether a commuter is boarding or alighting when the fault occurs, he could be overcharged or undercharged as a result. I can assure Members that the PTOs do not profit from such system faults. On the contrary, they are penalised, as they have to absorb the revenue losses from undercharging, whilst commuters who are overcharged can get a full fare refund or a voucher for a free bus ride.

Let me highlight to Members that LTA and the PTOs have worked hard to refine the Vehicle Location System on buses. This is the system that automatically updates the fare stage in the computer onboard the bus. Their efforts have significantly reduced the instances of overcharging. Cases of wrongful deduction of bus fares have fallen drastically to only 0.006%. This is a remarkable and commendable achievement for a large-scale system. But with a total of two million trips a day on trunk bus routes,

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this still amounts to about 120 cases a day. As such, LTA and the transport operators will see if they can further reduce the number.

Consequential and Technical Amendments

Sir, clause 11 makes consequential and technical amendments incidental to the above amendments. The amendments cover provisions for the PTC to issue directions and codes of practice, as well as provisions for licensees of bus service operators and ticket payment services to appeal to the Minister against certain decisions by the PTC concerning bus service operator licensing, the licensing of ticketing payment services and the Fuel Equalisation Fund or the codes of practice.

Other Amendments

The remaining amendments proposed in the Bill are to refresh the PTC Act or to improve the PTC's operational and regulatory effectiveness. These amendments serve to update the procedural provisions covering the quorum of meetings and the term of office of PTC members.

Sir, I beg to move.

Question proposed.

3.18 pm

Mr Ong Kian Min (Tampines): Mr Speaker, Sir, I wish to thank the Minister for including in these amendments the provisions that give effect to the recommendations made by the Committee on the Fare Review Mechanism. In particular, I am pleased that true to the Minister's promise made during the Committee of Supply debate in March this year, the amendment Bill provides for the empowerment of the PTC to proactively

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direct the Public Transport Operators (PTOs) to adjust fares or give rebates in accordance with the new fare adjustment formula. This will open the possibility of a downward adjustment of fares by the PTC should the formula yield a negative value under the then prevailing conditions, and even when the PTOs chose not to apply for a fare adjustment for that year.

However, I would not go as far as to agree with PTC Chairman, Mr Gerard Ee's suggestion, as reported in the Straits Times on 11th October 2005, that there should be automatic fare revision every year, unlike now when transport companies must apply for the fare increases.

Public Transport Fares Adjustment

Public transport fares adjustment is not a simple straightforward exercise where you can plug in the numbers into a mathematical formula and out comes the result. It is different from changes in our electricity tariffs, for example, where there is an exact formula based on the long run marginal cost. Therefore, for 4th quarter 2005, where the tariff is raised from 18.26 cents per kWh to 19.57 cents, we can say that it has been increased by 7.2%. This percentage increase is then applied across the board and if the unit cost was, let us say, $1 previously, it would be increased to $1 and 7.2 cents after the effective date for every unit of electricity consumed. So if you consume 1,000 units of electricity, the new price you would have to pay is 1,000 x $1.072 or $1,072 in total.

On the other hand, the tiered public transport fares increases, whether 1 cent, 2 cents or 3 cents, approved by the PTC, are awarded to apply to certain fare stages, certain services and certain categories of commuters. For example, in the 1st July 2005 increase, adult ez-link fares for buses went up by 1 cent for the first fare band (that is, up to 4 fare

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stages) and by 2 cents from the second fare band onwards (that is, more than 4 fare stages) while adult cash fares increased by 10 cents across the board. Concession fare for senior citizens during off peak hours increased by 1 cent. Child/student fares and prices of student/NS men concession passes were not increased.

Therefore, to derive the overall percentage fare increase, the PTC and PTOs use complex modelling, forecasting and projections of passenger ridership on particular services and for certain fare stages projected over the next 12 months going forward. At the end of the 12-month period, there is no certainty that the PTOs will actually realise an increase of exactly 2.4%. The actual overall increase cannot be determined until the 12-month period is over. So if the operators receive less than 2.4%, they cannot claim for the balance. Neither can the PTC claw back from the PTOs should the operators gain more than a 2.4% increase in fare revenue.

Therefore, I think the PTC should enlighten commuters on how it approves fare adjustments. And I felt that when PTC announced in its press statement on 30th May 2005 that, "The PTC has approved an overall fare increase of 2.4% for 2005. This is in line with the new fare review framework ...", and The Straits Times reported it as follows, "In approving the fare revision, the PTC allowed the maximum 2.4 per cent increase under a new fare adjustment formula ...", it gave the public the wrong impression that PTC would allow whatever is the maximum percentage increase and would tweak the various component increases to arrive at this target figure. Instead of focusing on the figure for the overall percentage increase, PTC should assure the public that the 1 cent, 2 cents or 3 cents fare increases that have been approved are projected to be less than or within the maximum

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increase allowed by the formula. Sir, the fare adjustment formula sets the maximum allowable increase for that year, so that even if the PTC wants to award a larger increase, it cannot do so. It is a safeguard to protect the commuters so that they would not be hit by a disproportionately large increase in any given year.

Dual Role of PTC

It is important for the PTC to enhance its communication with the public. I would like to reflect on the role of the PTC. Under the PTC Act, the core functions of the PTC include approving bus services that charge fares, regulating bus service standards and approving bus and rapid transit system fares. The Bill seeks to bestow further legal powers on the PTC to improve the regulation of the public transport industry. Bolstered with its added powers, the PTC will indeed be in a strong position to carry out its mission of safeguarding the interests of the commuting public while ensuring the long-term viability of the Public Transport Operators. It is timely during this Second Reading of the amendment Bill to ask the question: has the PTC fulfilled, or be seen to fulfill, its role?

Judging from the adverse public reaction over the fare hikes a few years ago, the perennial complaints about poor services and long waiting times, it would seem that many commuters would not think that the PTC is on their side. The PTC has the unenviable goal of safeguarding commuters' interest while ensuring that the PTOs do not go bankrupt. This dual mission has created a niggling suspicion in the deep recesses of many commuters' minds that, between the two, the first priority and overriding consideration is that the PTOs must remain in business as otherwise there would not be a public transport system in the first place to talk about.

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Hence, commuters feel that they have to accept compromises so as not to burden the PTOs unduly beyond what they can afford to bear. They feel that the PTC will only push so far and so hard and so long as these demands do not result in the PTOs going broke.

We are from time to time reassured that the members of the PTC are caring individuals from all walks of life who approach their task of looking after commuter interests with utmost sincerity. However, most commuters do not have much awareness of the deliberations of the PTC or what it is planning in their interests. There seems to be a communication gap somewhere down the line, which will easily give rise to misgivings and misinformation. Such misgivings can be avoided or at least kept to a minimum if the PTC plays an active role in communicating with the public. With the amendment Bill entrusting further responsibilities to the PTC, it is an appropriate time for the PTC to consider raising its visibility in order to increase public awareness of its policies, plans and actions.

Fare Adjustment Application and Approval

Back to the issue of the application and approval process for fare adjustments, while I do not agree with PTC Chairman, Mr Gerard Ee's suggestion that there should be automatic fare revision every year, I do believe that there is simply too much drama surrounding every fare revision every year. Under the present process, the PTOs must submit the application for fare revision by 1st May every year. For weeks before this deadline, the media will scurry around, here coaxing operators to indicate whether they would be applying for a fare increase, and there, encouraging transport experts and the public to comment on whether an increase would be justified.

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Once an announcement is made that applications have been received by the PTC, we have to sit around for another four weeks of media and public speculation as to what is contained in the operators' proposals. Finally, after those weeks of deliberation, the PTC makes its long-awaited pronouncement. My point is this: can the application process be simplified and the waiting time for the PTC decision be shortened? Although a certain amount of deliberation and suspense is unavoidable, too much of it for too long a period can brew unhealthy and unproductive speculation. A shorter processing time will lessen unnecessary drama and pointless conjecture.

Fare Evasion

Now, I would like to touch on the issue of fare evasion. Based on the statistics provided by the public transport operators, the cost of fares defaulted on bus services is estimated to be $9 million a year. This is a lot of money and begs the question whether the ticketing system is too easy to fool. If my company is losing $9 million in revenue a year, I would certainly press the management to pay proper attention to find effective ways to improve the system technically to solve the problem and lessen the amount that is being lost. Every dollar recovered will go

straight to increase the bottom line. Certainly, the present system is not foolproof and there has been talk among the commuting public on ways to cheat the system.

At first glance, I applauded the move to introduce penalty fees for fare cheats. It is an intermediate penalty between asking the commuter to simply top up the ticket price and prosecuting the person in court for fare evasion as a criminal offence. The new penalty fee may be offered as it makes work easier for the transport officials by not having to prove intent because once caught, people can give all kinds of inventive excuses. In

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fact, to date, there has not been any case of a prison sentence being meted out for fare evasion. To impose a penalty fee, all you need to prove is failure, not refusal, to pay. Currently, conviction in court is only for refusal to pay where it is required to prove intent, not merely failure. Offenders will be less offensive if they are accused of 'failure' rather than wilful evasion. The new provisions for a penalty fee system make it easier on the operators to penalise fare cheats, but also give the fare cheat the comfort that the likelihood of him being hauled to court is almost non-existent.

However, on further analysis, I have the following concerns. First, having transport officials to catch fare cheats is very manual and very labour intensive. If we want to create employment, this might be one good way to do it. But there are so many bus services and bus trips a day. So how much ground can a transport official cover and what is his expected success rate?

Secondly, having transport officials appointed by the PTC means additional expenses for the PTC and these would ultimately have to be paid out of public funds. Would a transport official catch enough fare defaulters in one day to justify the cost of his employment? Are the duties of a transport official only to catch fare cheats? I think he should also have other duties while on the beat.

Also, whose responsibility is it to reduce or prevent fare evasion? It is a loss of revenue for the transport operators and so it seems it should be in their direct interest to put in measures to prevent or reduce such losses and to increase their revenue. So I am not sure why the PTC is bearing the cost of doing this.

Thirdly, to deter a would-be offender from committing an offence, the chances of being caught must be high or if it is difficult to catch him, then the penalty

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must be high enough to persuade the would-be offender not to take the risk.

Let us compare with the ERP system. It is a positive move that we de-criminalised the non-payment of ERP charges. There is almost absolute certainty of being caught by the ERP camera, and no one is so stupid to try to evade paying ERP charges, except maybe stalling for time by driving slowly or stopping at road shoulders waiting for the ERP hours to pass. So the penalty fee can be low and drivers would still be deterred from non-complying. But in the case of fare cheats, they are difficult to physically catch by the proposed method of having transport officials. There are so many buses and so many bus trips a day. It is like looking for a needle in a hay stack. And if caught, the penalty fee is also not substantial.

Fourthly, I submit that fare cheats are different from non-payment of ERP charges. First, a driver can inadvertently forget to insert his cashcard into the IU or to top up the amount, but a fare cheat cannot be said that he had inadvertently or by mistake tapped his card prematurely before arriving at his destination. To cheat on fares, the act and intention are clearly there, but I do admit that it may be hard to prove in court that a fare cheat actually intended to cheat.

So fare evasion has every element of a criminal offence, no different from, for example, cheating or shoplifting. No matter how small the amount, it is a deliberate act to cheat, to short change, to deprive someone of what is rightfully his to charge and collect.

Sir, the new penalty fee system is an improvement over the present one where the defaulter, if caught, is only made to pay the fare difference, and court action is rarely taken. My concern is that it will still not be effective to deter fare evasion or, worse, I hope would not invite more

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people to evade fares. Nevertheless, I trust that the PTC and the PTOs will monitor the situation closely and make adjustments if need be, as failure to stem fare evasion would, over the long term, result in higher fares for the commuting public in general.

Sir, on that note, I support the Bill.

3.35 pm

Mr Chiam See Tong (Potong Pasir): Sir, I have two points to make. They are, firstly, to call on the Public Transport Council (PTC) to continue to exercise restraint in approving fare price increases and, secondly, to call on the Public Transport Operators (PTOs) not to completely abandon their role as a public service provider. As regards the first point, anyone who reads this year's Annual Report of the PTC will know that the PTC had been very stringent in approving fare increases under the old fare adjustment formula framework which was implemented in 1997. As a result, during the past seven years, the actual average fare increase is only 0.7% per year as compared to the average fare increase cap of 2.4% per year. This is in line with the Government's policy of small but frequent fare increases. The Government has learnt that it is easier to implement small but frequent fare increases rather than delaying the increases which can be quite hefty causing a public hue and cry when they are implemented.

This was evidenced in the 1980s when commuters boycotted taxis. At that time, taxi drivers raised their fares by an additional charge of $2. The taxi drivers tried to justify their fare increase by pointing to the steep rise in fuel price, but commuters just would not listen. Inter alia , this Bill establishes the Fuel Equalisation Fund. The purpose of this

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fund is to mitigate the effect of any increase in fuel price and electricity tariffs. PTOs have to pay into the fund an annual contribution of such amount as the PTC may from time to time determine. We all know that due to the uncertain world situation, oil prices are politically very vulnerable. Nobody can predict when shall be the next massive oil price increase again. In such a situation, the fund may be quickly drawn down and the PTOs shall put pressure on the PTC to approve the full minimum cap allowed which was a sizeable amount of 2.4% under the old fare adjustment formula. We still do not know what is the minimum sum cap under the new formula introduced under clause 22 of this Bill. But I hope that the PTC shall continue to be stringent when exercising its powers of approving new fare adjustments after taking into account both the interests of commuters and the viability of the PTOs in the long term.

As regards my second point, Sir, I urge the PTOs, when exercising fare adjustment, to look at the plight of the very poor people in Singapore, that is, the people who are comprised in the lowest quintile of the lowest 20% household income bracket. These are the people comprising four in a family, earning only about $2,651 per month in 2003. Each month, each of these households spends a total of $2,421, of which $131 or 5.4% is spent on public transport. These households hardly have any savings at the end of each month. These are the ones most sensitive to any bus fare revision. No matter how small the fare increase is, it shall be critically felt by them. I hope the PTOs shall take note of these observations and to do something for them, maybe with the cooperation of MCYS and other NGOs to identify this group of people and give them subsidy, say, charge them less for a bus or train ride. At the moment, the help given by PTOs are too general, for example, senior citizens are given cheap fares, or 25% rebates for trunk-to-trunk rides, or the

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cheap fares given to school children and NSmen. This group of people may be in fact quite wealthy and the help given to them has been wrongly directed and loses its purpose, that is, to help the poor. The PTOs must implement a scheme of cheap fares directly aimed at the people who really are in need of help.

I think it is not unfair to call on the PTOs to help the poorest people in Singapore, remembering that they do get a lot of help from the Government. Despite the fact that PTOs are constrained by the imposition of the universal service obligation (USO), that is, they cannot cherry pick their routes, they are basically monopolistic in nature and can get good returns year after year. The Government has also been really sympathetic with the PTOs and has awarded them many cost reduction measures. I shall only name the major ones for the years 1998 to 2004. In 1998, road tax was reduced from $5,500 to $1,600 per year per vehicle for omnibuses, and the estimated savings for PTOs were about $13 million a year. In 2001, the cap on the percentage of advertisements allowed on full-bodied external advertisements was raised from 20% to 40% and road tax rebates given at $100 per vehicle for omnibuses. In 2002, road tax was reduced by $200 per year per vehicle for omnibuses. In 2003, frequency of inspection of omnibuses was revised from six monthly to yearly. Statutory lifespan of omnibuses was extended from 15 to 17 years, and the estimated savings were about $6.5 million a year. Employers' CPF contribution rates were reduced from 16% to 13%. As part of the Government's efforts to help keep public transport fare affordable, interchanges and bus terminals and RTS stations are leased to the PTOs at a nominal rate of only $12 per year. At the moment, the help given by the PTOs to the public is too general. The wrong people may be enjoying the PTOs' subsidies, but not the poorest people who

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are enjoying the subsidies. I hope the bus companies can identify the poorest Singaporeans and give cheap fares to them. This is the proper way to give help, that is, for those who really deserve the help.

Sir, in conclusion, I shall only comment on new sections 24(C)(5)

and 24D which criminalise one for not paying bus or train fares or the penalty imposed. An offender can be jailed up to six months or fined up to $2,000, or both, on the second time one commits that offence. It is significant that the fine is fixed at the upper limit of $2,000 or jailed for six months. New section 24D has a similar effect but in relation to failing or refusing to pay one's taxi fares. I am disturbed, Sir, that the fine is fixed at $2,000 and the jail term fixed at six months, which are also the amount and jail term that disqualify a person from standing in any election.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.05 pm.

Sitting accordingly suspended

at 3.46 pm until 4.05 pm.

Sitting resumed at 4.05 pm

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[

Mr Speaker in the Chair: ]

PUBLIC TRANSPORT COUNCIL (AMENDMENT) BILL: Debate resumed.

Dr Amy Khor Lean Suan: Sir, except for the penalty to be imposed for bus and rail fare evasions, the other proposed amendments to the Public Transport Council Act may be said to be largely in response to the persistent calls from public transport users for more oversight and greater accountability of the public transport

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operators for the ultimate protection of consumers. These amendments, if properly implemented, should help to ensure higher performance standards by the PTOS and reduce anti-competitive behaviour.

Public transport companies, even if they are commercially run and answerable to their shareholders, do have a social responsibility, since they are providing what is essentially a public necessity. Moreover, with the allocation of the geographical areas within which they can operate by the Government, they enjoy near monopoly status. To quote the famous dying words from Peter Parker's uncle in the movie "Spider Man": "With much power comes much responsibility." Hence, the operators should be subject to a higher standard of public accountability and transparency.

As in so many other matters of public policy we have debated in this House, I am, however, concerned with the efficacy of operationalising these proposed amendments. Accordingly, I wish to highlight four issues.

Firstly, regulating the service standards of bus operators. The Bus Service Operator Licensing (BSOL) gives the PTC legal powers to enforce licensing conditions and performance standards, which include aspects, such as directness of journey, accessibility, bus links to MRT stations and bus timing, at the operator level. The PTC can also impose financial penalties of up to $100,000 on operators who breach any licensing conditions.

In this regard, Sir, I would like to ask the Minister how would the PTC determine what are acceptable performance standards or benchmark performance standards when evaluating an application for a new operator licence or for a renewal of the licence. Would the

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PTC conduct an independent audit of the level of service provided by the bus operator for every route it operates as well as the efficacy of routes within the designated geographical area of operation in addition to studies conducted by experts on behalf of the operator? How frequent would these performance standard audits be carried out for the PTC, or would it be only carried out as part of the evaluation process for the issuance of renewal of a licence? How can public feedback regarding the quality of service of the bus operator be formally taken into account by the PTC when defining the standards to be met?

These benchmark performance standards which the bus operators are to comply with should be made known to the public, and they must be easily measurable such that the PTC can impose penalties on the bus operators if such standards are breached. For instance, taxi operators are penalised, if the number of accidents that their fleet of taxis are involved in exceeds a stipulated maximum. A set of publicly disclosed transparent performance standards will give commuters the assurance that their interests are being looked after.

I would also like to ask the Minister how the public's request for new routes would be catered for. For instance, can they apply directly to the PTC to consider adding a new route? Appropriate answers to these questions would enhance the credibility of the whole PTC in its oversight of the public transport infrastructure.

I also hope that the PTC would look into further enhancing the service standards of our bus operators by requiring them to improve accessibility of the buses to the disabled, the elderly, and to parents travelling with infants in their arms or with prams. This issue of accessibility to the disabled and the less mobile elderly has been debated for years.

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Even as the MRT is now being made disabled-friendly, it is timely to look into making our buses disabled-friendly also, so that our public transport system is truly integrated and accessible to all. A disabled-friendly public transport system does not only benefit the disabled community but also the elderly and those with infants. We cannot continue to give the reason that making buses disabled-friendly will slow down the other commuters. After all, such features are already widely available in developed countries for many years, and commuters do not appear to have an issue with the provision of such features. Furthermore, such an attitude would be totally inconsistent with our efforts to build an inclusive and gracious society and one in which customer service is deeply ingrained in our collective culture.

As our society ages, it is likely that more elderly could benefit from these disabled-friendly features than the disabled themselves. We need to start looking into the provision of such features, perhaps in phases, by requiring only the new fleet of buses to be fitted with these features when the old buses are de-commissioned. This would reduce the cost to the bus operators of requiring all buses to be fitted with such features at one go. In fact, these features could simply comprise buses with no steps or low steps. Of course, the LTA must also take into account the design of bus stops to accommodate easier movement and access of the disabled, the elderly and those with infants into the buses.

Secondly, penalty for fare evasion. The amendments also provide for a penalty fee system and imprisonment for repeat offenders to be imposed on bus and rail services to deter fare evasion. I would like to urge the PTC to ensure that the bus inspectors, appointed by the PTC with the approval of the Minister, exercise their powers judiciously and with an even hand. After all, this is intended to serve as

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a deterrent and is not to be a witch-hunt. There would be genuine cases of, say, the elderly and the less-informed who may, unintentionally, tap their fare card earlier than they need to alight and do not know how to use their fare cards properly. These inspectors should be appropriately trained to not subject commuters to unnecessary public humiliation and be treated like criminals.

Appeals to operators as well as to the PTC against the penalty imposition should be heard expeditiously, and refunds on penalty fee be paid promptly, if indeed it is found that the commuter is innocent. The composition fines of $500 to $2,000 in the case of a court action, and provision of imprisonment for repeat offenders are harsh penalties and disproportionate to the likely fare evaded. Although it has been noted that this has not happened in the current regime, it cannot be assumed that it will not happen going forward. Hence, hauling offenders to court should remain as a last resort and exercised with much caution and great sympathy.

Additionally, I think that there should be clearly written notices in all four languages placed prominently in the buses and MRT stations and trains to remind commuters of the correct way to use their fare cards and the penalties that they could face for evasion.

Thirdly, performance standards of ticketing service providers. The PTC would also be empowered to regulate fees and charges levied on commuters, service standards for sales, refund and top-up services and so on by the two ticketing service providers. Penalties again of up to $100,000 for regulatory breaches can be imposed on the service providers. There have been many calls, as noted by the Minister, by the public to fine the ticketing service providers for overcharging due to bugs in the ez-link card system which, to date, still persist. Since the PTC can now

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impose performance and service standards on these providers, it could, among others, stipulate a maximum acceptable overcharging rate due to systems error, after studying and being advised as to what is an acceptable error rate. For instance, is the error rate of 0.006%, which the MOT has reported for the period April to July 2005, an acceptable maximum rate, given that there are approximately 78 million trips made each month? Compared to the estimated loss in revenue of $9 million due to fare evasion, what is the amount that had been overcharged due to systems error? If the stipulated rate is breached, then the providers ought to be liable for penalties. This would ensure that they would closely monitor the performance of the fare card system and place priority on improving the system to minimise overcharging due to systems error.

Fourthly, fare adjustments in response to market forces. The PTC can now pro-actively direct PTOs to adjust fares or to give fare rebates in accordance with the recently-approved fare adjustment formula. Currently, they can only consider fare adjustments if the PTO submits an application for fare adjustment, which implies that it is unlikely to submit applications to adjust fare downwards, even if there are conceivable grounds to do so, for example, new and much cheaper sources of fuel that are commercially available.

I would like to ask, besides the PTC itself

initiating a review of the price: could the public also be allowed to ask for a fare review? Again, it would be helpful for the process to be made clear, perhaps by allowing the public to post such appeals on the website, with submission of the full grounds for such a revision to a review committee. The committee then can make recommendations to the

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Minister, who can then direct the PTC to consider the application. Additionally, how would such an application be treated and the subsequent decision communicated to the public by the PTC?

Sir, in conclusion, I am pleased to note that the Ministry has responded to the many calls made by commuters for more explicit and transparent regulation of the performance standards of our PTOs. The amendments to the PTC Act would provide the PTC with more teeth to enforce service standards as well as penalise commuters who abuse the system. These amendments, if properly implemented, should help to further enhance the efficiency of our public transport system and also contribute to keeping costs at an affordable level. Hopefully, it could also help to go some way to address the frequent public mistrust of the public transport operators and, in the case of some, even the Government's intentions, each time the PTC reviews an application for fare hikes.

With this, Sir, I support the Bill.

4.18 pm

Mr Andy Gan Lai Chiang (Marine Parade): Mr Speaker, Sir, I stand in support of the Public Transport Council (Amendment) Bill.

The key amendments, as proposed, are timely as transport matters are crucial to the support structures of Singapore in that it helps not only the economy but also the social well-being of those living in our country. The amendments contained in this Bill have been explained clearly by the Minister and I will not repeat them. These amendments are in itself well prepared to meet the specific topics that they are meant to address. However, I would like to relook at the present goals and functions of the PTC and to see how effective they have been and following that, whether these amendments to the

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PTC Act will provide any improvements to the goals.

The PTC established in 1987 was tasked with the following goals:

(a) to create a comprehensive and integrated bus network;

(b) to assure quality bus services; and

(c) to maintain affordable bus and train fares for the public.

Presently, to achieve these goals, the PTC, under the current Act in section 5, performs the following functions:

(a) to receive and consider application for the issue of bus service licences;

(b) to receive and consider application for approval of bus, taxi and rapid transit system fares;

(c) to regulate the bus routes and bus, taxi and rapid transit system fares; and

(d) to engage in such other activities and to perform such functions as the Minister may permit.

The amendments seek not only to regulate bus routes, bus fares and bus services. It aims to allow the PTC to control and regulate the bus services, bus service operators and ticket payment services. Control powers vested in the PTC include imposing financial penalties on the bus operators of up to $100,000 for breach of any licensing conditions such as quality of service standards. Furthermore, the PTC will also be able to levy financial penalties of up to $100,000 on ticketing service providers should they breach regulations.

This contrasts starkly to what the PTC does presently, which is largely confined to the issues of fare increases and renewal of bus licences. Furthermore, the

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PTC functions are more to react to bus operators' applications rather than to engage them in finding alternative solutions to the ever changing transport network. In addition, another question that arises is whether there is a need to add on to the basic character of the PTC as a regulatory body to that of a policing role where financial penalties are now part of the legal framework. This will include the introduction of a penalty fee system for bus and rail services to try and stem fare evasion. Much has been said about it and I am sure that the application of it will be monitored closely. These proposed changes, I feel, must improve the role of the PTC in their service to the public rather than the present administrative powers.

As transport system evolved to manage the changing habits of commuters, so must the PTC change to keep up to the demands of the marketplace. The introduction of a regulatory regime for ticketing payment services and system is one such evolution to a better fare control environment, as it is a forward-looking piece of legislation that seeks to prepare the ground rules for a level playing field in the future supply of various ticketing systems and the charges associated therefrom. However, application of such powers seems to be out of place invested in the PTC in its present form. Unless the PTC is given sufficient technical and staff support to administer such powers, apart from just having additional Public Transport Officials appointed by the PTC to collect penalty fees, I do not see how these amendments can be effective enough to serve the public. Perhaps the Minister will be able to enlighten the House on this matter further.

Under the present Act, whether a bus company has one bus or a fleet of 20 buses, it is given the same licences under Part IV of the Act. With the proposed amendments, bus companies that have a

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fleet of 10 or more buses must apply and be granted a bus operator licence. The public has not seen any new competition for a while in the supply of bus services on general routes serving the public. Passengers complain that the cost of transport is greater than the cost of a meal. They complain of long waiting times and sub-standard service provided by bus operators. Added to this is the public perception that the increases in fares are justified by the air-conditioned bus interchanges, television screens and other frills that are not necessary. Although it was explained that the Government, in fact, paid for the interchanges and the advertisers paid for the TV screens, the savings or earnings received by the bus operators are not passed on to the commuters in terms of lower fares, higher frequency of buses, etc.

At the moment, two bus operators provide the majority of basic bus services to the public: SBS Transit Limited (SBST) with 178 bus services and SMRT Buses Limited (SMRTB) with 66 bus services. This is supplemented by Scheme B Bus Services with 16 licensed services and the City Shuttle Service (CSS) with only one. The CSS is part of SMRT. For premier services, SBS Transit (Express) has five bus services: Bus Plus Services Private Limited (which is a subsidiary of SMRT) with six services while other operators made up the other three services. It should be noted that the bulk of the premier bus services are provided by SBST and SMRTB. From the above it is clear that, in the main, public bus services are only provided for by two operators - SBST and SMRTB.

The introduction of competition in the provision with the possibility of more bus operators offering more public bus services plying on popular and remote routes will enable PTC to achieve and enhance its three-pronged goals. In fact,

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when TIBS was introduced in 1982, its introduction was to provide some measure of competition to SBS, then the sole operator, and ultimately to improve the level of services provided by the bus operators. However, prospective bus operators smaller in size must also satisfy the conditions set out in new section 18(1) (a) to (j) and Part IVB in relation to licensing of ticket payment services, in particular section 21(1) (a) to (j). This imposition of conditions may stifle competition as the cost of compliance may be prohibitive to would-be bus operators, especially to smaller operators, who may wish to come into the transport market to provide competition by plying along fare-paying routes. So the PTC may have to see whether competitions are hampered through the presence of market powers, especially in the hands of major transport players.

Another advantage that the proposed amendment has for the public would be the powers that PTC will have in building up the fuel reserve accounts of transport operators. In these days of high fuel cost and the possibility of volatile fuel prices, the Fuel Equalisation Fund will prove useful in helping to maintain stability in transport fares. On this point, it may be necessary to note the necessity to recruit personnel with the right skill set for the PTC to determine a strike price or level that will help to maintain a strong Fuel Equalisation Fund from contributions made by the PTOs. This level must invariably be a level reasonable with the economics of running a public transport operation. Although currently a reference fuel price has been determined for the PTOs before they are required to make their annual contributions to the FEF accounts, will the PTOs in future be forced to contribute even if business conditions may not be favourable to them? Some safeguards may have to be put in place to protect the public should there be an anomaly affecting the business of the bus and train operators,

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thereby affecting their contributions to the FEF accounts.

Sir, in conclusion, it seems that the amendments proposed will still enable the PTC to meet its goals in their service to the public, and the addition of new powers and functions are useful in providing improvements to future developments in transport-related needs. The amendment to the Act forces the PTC to take a more robust and interactive role in fulfilling its duties to the public. The proposals suggested are to redefine the scope and powers of the PTC and, with the added policing powers, will help the PTC to regulate for a more transparent public transport system. On the other side, the providers of public transport will be more aware of their need to balance their social responsibilities against their corporate profitability.

4.28 pm

Mdm Cynthia Phua: Mr Speaker, Sir, thank you for giving me this opportunity to speak on this amendment Bill.

There are many factors that affect whether people choose to travel by public transport or not. Convenience, comfort, affordability and accessibility, especially in the case of the elderly and handicapped, are among the characteristics of a good transport system. Today, our public transport has evolved into a multi-faceted system where operators offer underground trains, buses and taxis, all rolled into one. The introduction of a bus service operator regime is timely. The North East Line has shown that the same transport company which runs the train services to also operate the bus services on the same route is not in the best interest of the community for the commuting public. Presently, we are still daunted by residents' requests for a service between nearby estates, for example, Sengkang and Hougang. Residents have to take two buses which

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in a car, it takes less than 10 minutes. While I understand that profitability is a consideration - as the operator is a profit-making company - the PTC has an important role to ensure that the providers of public transport also have a responsibility to provide more than just the minimum service. This has serious political and social impact. The building of kinship and community bonding should not be affected by the cost and inconvenience of the country's transport system.

Next, I would like to touch on the mobility of the commuting public. If residents are not properly served by public transport, then access to employment, goods and services may be restricted. So the transport system has to be accessible to everyone, young and old and the handicapped. This is more on the provision of appropriate facilities to ensure mobility. Currently, about 30-odd per cent of our population are between 40 and 59 years, and 11% and 12% are from the 60 and 80 years and beyond. So, at least, 42% are above 40.

Our transport operators must pay attention to this demographics. While it is good to go to the aesthetics, decorating the stations with expensive art pieces, they should not overlook investing in lifts, guard rails and other facilities to ease the mobility for the elderly and the handicapped. The current escalators are too fast for the elderly, not to mention the handicapped. We should see their stunned look at the cascading escalators. Moving down the steep decline to the underground station is another hair-raising experience for them. Therefore, for these commuters, they face both physical barriers and psychological barriers. Providing lifts is one solution, and the provision is after many appeals in this House. In fact, when you think of mobility, it affects not just these people. Remember, anyone of us at any time faces mobility problem, even temporarily, because of a sprain or some other injury. So when public transport is more

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accessible to the less mobile, it benefits everybody in society. And, of course, do remember that when there is a fare increase, the less mobile bear the higher cost too. Ease of accessibility by the senior citizens should be one of the most important performance standards that the PTC should look at.

Hence, I would like to call on the PTC, which not only has the role and responsibility to oversee the operators, but also review the provision of these facilities by the LTA, to ensure the mobility of the residents and the ease of accessibility of the commuters.

On the same note, I now turn to the replacement programme for buses which I understand is on a 10-year cycle. The PTC could perhaps require the transport operators to actively look at how they can incorporate facilities to make the buses more accessible to the less mobile elderly commuters. The steps on the buses are too high for the elderly. Why give them fare concession when you are extinguishing their joy of travelling, as the buses are inaccessible to them? We should start planning now because 10 years down the road, there will be even more elderly people within the community that need these lower-step buses.

I welcome the relaxation of the rules where those who operate less than 10 buses need not go through the gamut of requirements to qualify for licences. It is my hope that these small operators can offer some relief to the heartlands by running feeder services to and from the housing estates to the train stations, especially on routes where the big transport operators refuse to service. PTC should consider letting go the licensing of network of these small operators to allow them to provide this kind of services for the convenience of

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residents, especially in the private estates too.

The amendment to the Public Transport Act talks about the application for revision of fares and the formula that it applies. Invariably, this is about the upward revision of fares. At what juncture will the PTC intervene to ask the transport operators to lower the fares? Is there any mechanism where the PTC can step in to ask the operators to carry out a downward revision of fares if the occasion presents itself? Secondly, will the PTC ensure that there is sufficient opportunity for non-Government organisations, like CASE, the unions, and so forth, to make representation to the PTC before they make any recommendation on fare revision? To be proactive, is there a guideline for the PTC to review the fare on a fixed interval period, and at the same time entertain ad hoc requests for review by the abovementioned bodies, for example, CASE and the unions? It is very difficult for commuters to accept after PTC has given the green light for fare hikes when the companies are generating profits. We just have the SMRT announcement on 30th June 2005 that SMRT's first quarter 2005 unaudited group profit was $23.92 million compared to $21 million for the first quarter 2004, and SBS Transit's second quarter 2005 profit was $11.59 million compared to $11.55 million in 2004.

I congratulate these companies for their profitability. But they must not do this by increasing the fares. For the PTC, it has to show more transparency and give a better explanation of how it arrived at accepting the figures presented by the transport operators when they apply for fare revision. Otherwise, any recommendation by PTC would just be blown off in the face of logic. To a shop floor worker or student having to spend an additional 20-40 cents or more a day just to get to work or to school is a

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challenge. To the man about town, these may be loose coins, but to them and many others, these are not small change.

The revision also introduces the regulatory regime for ticket payment system and services. The commuters' interest should not be considered for the payment mode between the two bus and rail operators alone. But PTC should ensure that the card that is used should be an open system, suitable for all retail and other trades as well. I will give you an example. The existing ez-link card system cannot be used without ERP system which uses the Nets card. Despite that, the ez-link card is the latest introduction into the transport system. Just imagine that if the cards are seamless in our buses, our trains and our cars, we can switch modes of transport all the time and the cost could be cheaper for each card. I have not owned an ez-link card as it is ridiculous to pay $5 for deposit for this card.

Finally, the amendments introduced the penalty fee system for buses and rail services for commuters who evade the fares. I understand there is a concern as the number of evasion of fares is high. This is the result that the existing system is not robust enough to minimise evasion. Once it is not robust, then uncertainty will definitely step in. Is it a case of evasion or is it a case of innocent error? I understand that presently, in the MRT gantry, a person can walk through the gantry following the other person in a hurry, that means with the tap itself, it is able to accept two persons going through the gantry. The commuter could have tapped the system and may not be able to register as well. I would like the PTC to review the robustness of the system before the implementation of the penalty system and allow for innocent errors to be compensated by the commuters. This has happened to many of us when our cashcard is not logged in properly after taking out to pay for carpark charges in

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our ERP IU console. And I sincerely appeal to PTC to really give a chance to the innocent people who have made a mistake or who genuinely have made a mistake in incurring or not paying the fare itself.

On this note itself, I would like to wish PTC the best as it is going to have a heavy responsibility to ensure that we have an affordable and accessible transport system in Singapore.

4.40 pm

Ms Eunice Elizabeth Olsen (Nominated Member): Mr Speaker, Sir, thank you for allowing me to participate in this debate. Sir, one of the things the amendments to the Public Transport Council Act seeks to do is to provide for the regulation and licensing of bus service operators and ticket payment services. In particular, the Bill sets out the requirements for an application for the grant or renewal of a bus service licence and provides for the PTC to take into account the needs pertaining to passenger demand in determining whether to issue a licence. In effect, the Bill expands the powers of the PTC to impose conditions on the general level of services provided by a bus service licensee.

Sir, I welcome this step. Many Singaporeans rely on public buses and many, I am sure, would welcome better services from the transport operators. This Bill would give the PTC more oversight to look into and respond to concerns raised by the public - either directly, or in the media - when it is time for the operators to renew their licences.

The Bill lists some matters to be considered by the PTC in granting or renewing such a licence and the conditions the PTC may impose. I shall not repeat all of them, but I believe something is missing in that list - the provision of bus services for people with disabilities. And I would like to echo and

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support the hon. Members, Dr Amy Khor and Mdm Cynthia Phua, with regard to making our public transport system more disabled-friendly.

It is an understatement to say that the transport needs of the elderly and the disabled are not being met satisfactorily. What we have now is some level of door-to-door services, which is more expensive, and, more important, perpetuates the out-of-sight, out-of-mind mentality that is being manifested in our society.

Recently, Today published letters from readers who felt it was not worth spending money to make public transport equally accessible for their countrymen with disabilities or that the needs of the able, ie, faster travelling times, should not have to take into account the needs of the disabled. This is the sorry state of our society.

Some Singaporeans - not all, but some - should finally drill it into their heads that people with physical disabilities can and do contribute equally to society. And Singapore does not belong only to the able. In other developed countries, the elderly and the wheelchair-bound may also be a small proportion of the population, but the people are accustomed to seeing them out and about and moving around. Accessibility of public transport has an important part to play in that.

For years, the Government has rejected the idea of making public buses accessible to the wheelchair-bound. Early this year, media reports suggested that various options are being explored to finally change things in Singapore. Sir, if we are to be a truly developed country and great city we aspire to be, then there is no better time than now to do something about it.

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I would like to ask the Minister if the PTC may impose conditions relating to the provision of accessibility for the disabled and requiring the licensee to submit an undertaking to improve accessibility for the disabled.

Sir, we can see that steps are finally being taken to improve access of public transport for families, the elderly and people with disabilities. Train stations are being upgraded with lifts and tactile guides for the visually handicapped, for example. We should build on this.

Equal accessibility does not necessarily mean travelling times can only be compromised. That smacks of a lack of creativity in finding solutions. Travelling times can be made up in other areas, such as improving traffic flow for buses. And in any case, is compromise such a bad thing? Are we that self-centred? Is that what years of economic gain have resulted in? The Prime Minister has said that our efficiency and economic gains should not be an end in itself. I would hope that we bear that in mind the next time someone chooses to raise the counter-argument that disabled-friendly buses are less efficient.

It has been more than a year since the notion of an inclusive society and a home for everyone captured the attention of our country. Before this vision fizzles out due to a lack of momentum, let us keep it going. Let us start with this Public Transport Council (Amendment) Bill.

4.44 pm

Assoc. Prof. Ong Soh Khim (Nominated Member): Mr Speaker, Sir, thank you for allowing me to speak on this Bill. I would only like to make a few observations on the introduction of the penalty fee system and I would appreciate that the Ministry could look into them.

Sir, the proposed amendments on the introduction of the penalty fee system, as

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explained by the Minister earlier, is to enable a deterrent penalty fee to be imposed, so as to possibly reduce the incidents of fare evasion.

I have five points to raise. First, $9 million and transparency. Sir, it has been widely reported in the media since the September Parliament sitting that PTOs and the bus companies lose an estimated amount of $9 million a year to fare cheats.

However, PTOs and bus companies did not disclose how this figure was arrived at, apart from mentioning the ways that travellers cheat.

In the Straits Times report of 21st September 2005, TransitLink was not able to provide figures on the number of bus cheats. Sir, if most of the companies were not able to provide figures on the number of bus cheats, then how did they arrive at a figure of $9 million a year?

Transparency is the key word here. In order to convince the people of Singapore that it is absolutely necessary to impose such harsh fines and jail terms, the PTOs and the bus companies have to have transparency in their procedures on how they arrived at this amount of $9 million. They should explain in detail how they derived this figure.

Second, $9 million and auditing. I would like to ask the Ministry if this amount of $9 million could have been significantly over-stated by the PTOs and TransitLink. Did the Ministry conduct an audit to verify this amount?

Sir, before any amendment Bill is made and passed in Parliament that would empower the authorities to slap a fine or penalty charges for those who cheat on bus fares or refuse to pay cabbies, and subsequent offenders would face a fine of $1,000 for the first offence and $2,000 or a jail term of up to six months, it is absolutely necessary that the Ministry has

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audited and verified the losses, as claimed by the PTO and TransitLink.

Fare evasion is not a problem peculiar to Singapore only. It happens in cities all over the world, such as New York, London, Melbourne and Sydney. In a report released by the New York Metropolitan Transportation Authority in September 1998 on Fare Evasion, the Metropolitan Transportation Authority, after conducting an audit, found indications that the fare evasion as claimed by the New York City Transit in the calendar year 1997 of $16.8 million in lost revenue, might have been significantly over-stated by the New York City Transit. They found weaknesses in the procedures used for accurately counting fare evaders and preventing fare evasion. In this report, the auditors recommended that the New York City Transit determine the causes of the increase in fare evasion. The auditors also recommended that the New York City Transit develop a methodology for accurately counting fare evaders, as it is essential that they have accurate fare evasion data to be able to reliably determine the actual costs of fare evasion and how much should be expended to prevent it.

Sir, this applies to Singapore as well. It is imperative for the Ministry to conduct its own independent auditing process to verify the actual loss of revenue due to fare evasion.

Sir, in so far as the general public in Singapore has heard through the media, it is this large figure of $9 million. In the report in the Today newspaper on 7th October 2005, Ms Joan Chang of the Ministry of Transport explained that the estimate is arrived at based on the detection rates and the average amount of fare evaded in the case of underpayment, non-payment and concession abuse as detected through actual ticket checks.

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The Minister has earlier said, "Fare evaders have a very low possibility of being caught." Hence, has the Ministry verified these detection rates? Is MOT satisfied with the methodology used by the PTOs and TransitLink in accurately counting the fare evasion, assessing and estimating this amount of $9 million? Has MOT found out from the PTOs which are the bus lines that have a high frequency of fare evasion? Has the Ministry checked with the PTOs if they have actually put in proper and sufficient measures to prevent fare evasion? The Ministry should conduct separate auditing and verification processes and make known the results.

Hence, if the Ministry has not conducted its own independent audit on this claim of lost revenue due to fare evasion, I would urge the Ministry to carry out its own independent auditing process to verify this amount before passing an amendment Bill that will empower the authorities to carry out the penalty and criminal process.

Third, wrongly fined and innocently jailed. Sir, as is well-known now, the ez-link system is full of bugs. In the Straits Times report on 21st September 2005, TransitLink reportedly said that system errors accounted for about a quarter of all refunds made in August 2005, and the rest were due to wrong usage of cards, such as commuters tapping their ez-link card incorrectly or failing to tap it when they got off the bus. However, the company again declined to provide the exact figures. Sir, it is essential that we know the actual number of cases of incorrect fares paid due to the wrong usage of the cards, in addition to those caused by the bugs in the system and the negligence of the bus drivers.

Sir, many bus commuters have been over-charged because of the bugs in the system. There may also have been cases

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of commuters being under-charged because of the bugs in the system and the negligence of the bus drivers. In addition, some bus commuters have paid incorrect fares due to these bugs and the wrong usage of cards.

Sir, should the amendments in this Bill be passed today and, subsequently, a bus commuter is caught paying incorrect fare, how do the council-appointed inspectors determine at that point in time on that particular bus that the incorrect fare paid by this commuter is due to an act of cheating, system fault, fault of the bus drivers or due to the wrong usage of the card? As the Minister has said earlier, and I repeat, commuters can be under-charged due to system fault. Hence, we end up with a scenario where a bus commuter is being "wrongly fined" or even "innocently jailed".

While it seems so far that the public is tolerant of TransitLink making mistakes and over-charging and making up for such mistakes through refunding and providing free bus ride vouchers, no one can make up for the pain that is suffered by a commuter who is innocently jailed, or the hardship that is suffered by a bus commuter who has been wrongly fined $1,000 or even $2,000.

Sir, the Virginia Railway Express in the US, in their June 2005 Update newsletter, reported that conductors find themselves in a very difficult and delicate situation when they must confront a passenger who they believe may be fare-evading. Conductors have no way of distinguishing a rider who has his mind on a hundred other important things and mistakenly neglects to validate his ticket before boarding or alighting from a rider who intentionally does not validate his ticket in the hope of getting a free ride. This happens to our bus inspectors as well.

Sir, consider this other scenario. Supposing an elderly poor individual

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boards a bus and, being elderly, hence a little absent-minded, forgets to tap his or her card on the card reader before alighting, is the council-appointed inspector going to fine this elderly immediately and, if unfortunately this elderly somehow keeps forgetting to tap his card, are the authorities going to lock this elderly up since, being poor, he would not be able to pay the penalty charges and the fine?

It has been said that commuters would be able to appeal to the PTC if they feel that they have been wrongly penalised, fined or even jailed. However, if the bugs in the system are not solved and the bus drivers are not properly trained and there is no idiot-proof way of ensuring that bus commuters have to tap on the card reader before they can alight, and that they have only one way of tapping their card on the reader, many such scenarios will occur and it would be creating needless paper work, wasting precious time and causing unnecessary expenses for the Government and the people.

It is a myth that such "smart cards" and ez-link cards will encourage public transport usage and reduce fare evasion. The fact is that these cards actually make it even harder for people to do the right thing and pay the right fare with the requirement to validate twice, when entering and leaving each bus. For the cost of this ez-link card contract, we could possibly put conductors back on our buses, thus creating more jobs for Singaporeans and have money left over to pay for service improvements.

Hence, before we go ahead to impose such penalty and criminal charges, perhaps TransitLink and the PTOs should look into their own system, get their systems engineers to debug the bugs in the system to make it foolproof and design a gadget to ensure that there is only one way of tapping on the card reader. This, in Chinese, is called zhi ben ,

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otherwise we are only zhi biao bu zhi ben . To translate, it means by imposing such penalty and criminal charges, we are not solving the root causes of fare evasion but only reducing or alleviating the symptoms.

Fourth, graduated penalty fees. Sir, the fines provided for in the amendments now before this House are heavy, relative to the $1 to $2 average fare for a multi-stage bus or train ride. Failure to pay a penalty fee for paying incorrect fare will attract a fine of up to $1,000, which goes up to $2,000 for repeat offenders. These penalty fees/fines of $1,000 and $2,000 and a possible jail term of six months are unnecessarily harsh. These penalty fees and charges will have a much larger impact on the lower income and poor families.

Earlier, we have seen reports in the newspapers of households living in darkness and households without water and electricity supplies because they could not pay their utility bills. Are we going to see more of such cases because these poor families may have been made to pay incorrect fares due to system fault but do not know or do not have the means to challenge such penalty fees and charges and eventually have to pay $1,000 or $2,000 because they could not pay the penalty fees? While one might argue that there are transport vouchers given to the needy families to help them with their transport costs, let us not forget that we recently have a transport fare hike, and these transport vouchers were introduced to counter these increases in fares. Needy families remain needy and need to save on every few cents, though they may have been unknowingly overcharged by TransitLink and PTOs many times, as people do not consistently check and record their card transactions by recording how much stored value is left in the card after each transaction.

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As I mentioned earlier, fare evasion is not a problem peculiar to Singapore only. It happens in cities all over the world, such as New York, London and Melbourne. In some countries, these commuters who do not pay their fare are called "free-riders". In the UK, a commuter who cheats on his fare is called a "fare dodger". However, in many other countries, these fare dodgers and free-riders who get caught are typically penalised around 10 times the amount of fare evaded. The penalty is payable on the spot, at a police station or a transport office. In Victoria, Australia, the fine is $150. In New South Wales, the fine is $200. In Victoria, repeat offenders are subject to graduated fines. For example, fare evasion incurs a fine of $150 for the first offence, $200 for a second offence and $250 for a third and subsequent offences within a given three-year period.

Hence, Sir, I would urge the Ministry to consider this option of adopting a similar graduated fine system, instead of a fine of $1,000, $2,000 and even a jail term of six months.

Fifth, people versus profit-making organisation. One might argue that the amendments are introduced to deter fare evaders who misuse concession passes, avoid paying or underpaying fares on the public transport system, and that criminal charges, fines and jail terms are the ultimate resort.

I would argue that the criminal process should be a last resort because of the cost of costs imposed on the society as a whole, and Singapore as a whole pays for this, as is clearly stated in the Bill that "This Bill will involve the Government in extra financial expenditure, the exact amount of which cannot at present be ascertained."

Sir, there is this expense of prosecuting offenders, the increased case

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load in the courts and, presumably, more prisoners in jail. Tax dollars should not be used to foot the bill for that, unless it is absolutely necessary and justified. Why is it necessary to have laws and to use public resources and taxpayers' money to deal with fare evasion on behalf of a profit-making organisation? In this case, the tax dollars are going to be spent by the Government to protect the revenue of these profit-making companies, instead of being better spent on helping needy Singaporeans.

These PTOs, being profit-making companies, should have their own means to solve this problem and prevent the problem of fare evasion. In Singapore, it seems that criminalising undesirable behaviour is viewed as an easy and tempting solution. But that is seldom the best or even the most effective way.

Sir, in conclusion, there is this saying " zhi biao bu zhi ben ". This is exactly what this Bill amendment does. It does not solve the root of the problem.

4.57 pm

Mdm Ho Geok Choo: Mr Speaker, Sir, as many before me have raised the pertinent points, I would just like to ask a few questions seeking further clarifications pertaining to Part IVC on the Fuel Equalisation Fund, and Part VA on public transport officials.

On Part IVC on the Fuel Equalisation Fund, a point is made that any person who has been granted a bus operator's licence is required to establish and maintain such a fund for the purpose of mitigating the effects of any increase in fuel price or electricity tariff. My questions are:

(1) For what other purposes will the monies in the Fund be applied?

(2) To whom will the same be applied?

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(3) Given the rationale for the Fuel Equalisation Fund, can the Minister elaborate on how the Fund works?

It would indeed be interesting to know more details about the workings of this Fund. New section 22A(1)(b) states that the exact amount of annual contribution is to be determined by the Council. My questions are:

(1) Are the criteria used to determine the amount of annual contribution relevant today and will there be a review of these criteria?

(2) What has been the amount of contribution to-date to this Fund?

(3) Will the public ultimately be the ones to bear the burden of such contributions, given that the majority of commuters are the lower income Singaporeans?

(4) Is there any safeguard to ensure that transport operators will not pass the burden on to the consumers, ie, the public?

On Part VA on public transport officials, new section 24A(1) states that the Council may appoint any person or class of persons to be public transport officials. My concerns are: (1)

is there going to be a new body to whom these public transport officials shall belong? (2) Who are the likely candidates for such appointments? I suppose existing MRT employees, existing bus employees. Like my colleague Mr Ong Kian Min before me has feared, I am concerned that the Government will incur extra and unnecessary expenditure on such appointments.

New section 24C(1) states that anyone who has made use of a bus service or rapid transit system service without paying the appropriate fare for the distance may be required to pay a

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penalty fee. Sir, what is going to happen to the penalty fee collected? Take an example, a commuter pays $1.00 where the appropriate fare should have been $2.00 and is required to pay a penalty fee of $5.00. What is going to happen to the $3.00 of the penalty fee? I am of the view that it should go into the Fuel Equalisation Fund if the purposes of the fund are validly established.

Finally, extending new section 24D: "Any person who, having made use of a taxi service and without reasonable excuse, fails or refuses to pay the fare as indicated on the taximeter shall be guilty of an offence." Sir, in criminal law, one must act dishonestly in order to attract criminal liability. Dishonesty requires the intention to cause wrongful gain or wrongful loss. Dishonesty is one of the ingredients forming the offence of theft, criminal breach of trust or criminal misappropriation. Should the element of dishonesty not be worded into the proposed section 24D? Or is it so plain that to do so is unnecessary? I would have liked to spell out matters clearly by adding the word 'dishonesty' into the said section and deleting the words 'without reasonable excuse'. Can the Minister comment on this?

On this note, Sir, I support the Bill.

Mr Yeo Cheow Tong: Sir, let me thank all the Members who have spoken in support of the Bill. They have raised many questions which I will attempt to answer.

[Mr Deputy Speaker (Mr Chew Heng Ching) in the Chair]

5.03 pm

Mr Ong Kian Min correctly pointed out that the PTC is faced with a very tough job of balancing the need to safeguard the interest of commuters on the one hand

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while also making sure that the PTOs remain viable. It is a very tough challenge which I think the PTC over these years has managed to discharge very, very well. Their decisions are not meant to please everyone. As he had mentioned, from time to time, whenever there is a fare increase, there is a big hue and cry and newspapers go to town with all the coverage. Therefore, Mr Ong also asked whether we could simplify and smoothen out the process so that it does not take so long, so that the period for all this hue and cry can be shortened as well.

Sir, let me go on to the specific points he has made. Mr Ong also brought up the point that he does not agree with the new Chairman, Mr Gerard Ee, on the need for the fares to be adjusted automatically. Sir, when I spoke to the former Chairman, Mr Eric Gwee, he did assure me that the PTC will act with flexibility, taking into consideration the formula that the Fare Review Committee had recommended and which the Government accepted in March this year, and that the PTC will take into consideration all the prevailing circumstances and conditions. I think that is also what the committee had recommended, and I am sure that the PTC, under the chairmanship of Mr Gerard Ee, will also do likewise for future fare adjustments.

Mr Ong also wanted the PTC to assure the public that the quantum of fare adjustment - one cent, two cent and three cent increase - which was levied this year and for future increases as well, is below the maximum allowed under the formula for fare adjustment. Sir, I think this is a challenge in the case of bus fares, which are unlike utility fees where the bill each month could be in the high tens or even a few hundred dollars, such that you can go down to one decimal point of increase. For the bus fares - 80 cents, 90 cents - it is very difficult to have the increase right down to the

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correct decimal point. I think what the PTC tries to do is to make sure that the increases are as close to the maximum as possible. So, on some of the bands, the increase may actually be a little bit higher than the maximum; on other bands, it will be below the maximum. So for a particular trip, a commuter may pay a little bit more or a little bit less, depending on where he goes. But over a period of one year, because the commuter would be taking buses almost everyday, on some trips he may pay a little bit more and on some trips he may pay a little bit less. Overall, the increase should be quite close to 2.4%. But, of course, as Mr Ong had also pointed out, for the company, whether the revenue is actually an increase of 2.4% for the year or not depends very much also on the ridership. So although we give them a 2.4% increase, if the economy is not doing well, the ridership may actually be lower and the company may actually end up getting less than 2.4% increase.

Mr Ong has urged the PTC to enhance its communication process with the public. I agree with him. PTC over the years has been making more effort to communicate better and I think they can still do a lot better too. So we will refer his suggestion to the PTC and I will urge the PTC to give his suggestion due consideration.

Sir, with regard to streamlining the annual fee review process further, I agree with him. Immediately after the last exercise, I told the PTC that they should take a look and see how they could streamline it further and reduce the review period. I think because of all the masses of data they have to go through, it takes the PTC about three weeks to actually analyse all the data. I have asked whether they can reduce that from three weeks to perhaps two weeks. That would help to reduce the time the issue is left hanging in the air. But having said that, I think that will still not prevent the press from going

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to town speculating what the increase will be, because the press normally starts their speculation well before the date for submission of the application for fare increase. I would therefore like to take this opportunity to urge the media to report responsibly on this issue and not create "unnecessary drama", as what Mr Ong said, amongst the commuters with speculative reporting.

Sir, Mr Ong raised concerns whether the penalty fee system is a cost effective means of enforcement and whether it has sufficient deterrent effect. Mr Ong took the view that to deter any would-be offender from committing an offence, either the possibility of being detected must be very high, like in the case of an ERP offence, or the penalty must be high enough to dissuade potential fare evaders. Sir, I agree with him that the enforcement is actually very tough. It is like looking for a needle in a haystack, to quote Mr Ong. Unfortunately, because the ez-link system is such a large scale system with very tight transaction times, you have to tap and within a few seconds the data has to be transferred. It is really not possible to make the system any more foolproof. To do so will make the system so cumbersome that it will not be able to operate as a mass transport system. Nonetheless, I think the penalty fee system would be a great improvement over the current process where the ticket inspector can only get the fare evader to pay up the correct fare. However, I am sure if this penalty fee is not adequate, in due course, PTC can review and, if necessary, allow for an increase in the penalty fee to make it more of a deterrent.

Sir, Mr Ong also expressed concerns that having PTC appoint the public transport officials will result in PTC bearing the additional enforcement expenses. Let me clarify that the public transport officers to be appointed are likely to be the current ticket inspectors

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and some drivers belonging to the operators. So, therefore, it is not PTC's job to employ such public transport officers and PTC will not have to bear any cost. In fact, because these are going to be existing staff of the public transport operators (PTOs), it is unlikely that there will be any additional cost incurred by the transport operators as well.

Sir, let me go on to Mr Chiam's points. Mr Chiam quoted the fact that for the past seven years, the fare increases have only averaged 0.7% a year versus 2.4% cap a year. I think he got the figures from the annual report of the PTC. Yes, he is correct. He has quoted the figures correctly for a change, and he felt that the low increase has been possible only because of the help given by the Government. Sir, that was a point I had made repeatedly in the House before and, if Mr Chiam had been listening, he would have heard what I said previously, which is that part of the reason why fare increases have been low over the past years - not just the past seven years but over the past 20 years - is because, firstly, we have two operators who have made continual efforts to improve productivity in their operations, and this has helped to keep the cost increases down. The second factor, which is also a very important one, is that Government has chipped in whenever we can to help reduce operating cost for the operators. For example, what Mr Chiam mentioned, the increase in the life of the bus from 15 years to 17 years has helped to keep the depreciation down and helped the bus companies stretch out the use of their assets. Another area which we have liberalised is advertising. Why should LTA or PTC be the ones to determine how much advertising space the buses should be allowed? We should deregulate that, and I am glad that it was done.

Mr Chiam took a fair bit of time to plead for help for the poor. He said that

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PTC has been helping the elderly, the senior citizens and the students by working with the PTOs to give them the concession cards and that perhaps we are helping the wrong people, and we should be ensuring that the help is more focused on the poor.

Sir, I would think that the elderly and the students would be very upset if they know that Mr Chiam is calling for the concession cards to be withdrawn and the money to be used to help the poor.

Sir, helping the poor is something which has to be taken up separately from bus fares. For those who are genuinely poor, it is not just about bus fares. It is the cost of daily living that imposes a burden on them. How do they pay for their electricity bills? How do they pay for their water bills, their rental and, most importantly, the food that goes into the stomachs of the parents and children? That is why the Ministry of Community Development, Youth and Sports has come out with this huge network of "many helping hands" to help the poor. We have the ComCare Fund. We have NGOs and VWOs, and the public also donates money to the charitable organisations to help the poor. It is better that help for the poor be based on the present system of "many helping hands". In any case, when the bus companies enjoyed their last fare increase in July this year, they came out with a donation to help the poor through the setting up of a transport fund. I think every poor family that qualifies will be able to get a voucher of $50. So that went a very big way in helping them because the fare increase is only a maximum of 3 cents which means that if you take four rides a day, it is only 12 cents - 12 cents in a month is only $3.60, or if you work for 20 days, it is only $2.40. So that $50 transport voucher went a long way towards helping them.

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Mr Chiam is very worried that, under the Bill, we are also providing for the offender to be brought to court and he is worried that the maximum fine of $2,000 or a jail term of six months are also the disqualification criteria for a potential candidate in a GE. I hope a potential candidate does not get into the habit of evading fares. Because only if he does so and he does not pay the penalty fee and, when reminded, he does not pay the composition fee, would he be brought to court. Even then, to be fined $2,000, you have to be a second-time offender. So I do not think people who are aspiring to come to Parliament are the type who are going to cheat on 20 cents bus fare. I am sure Mr Chiam does not do that too.

Sir, Dr Amy Khor touched on quite a few issues too. She asked what are the benchmarks, whether the Bill provides teeth for PTC to impose quality of service standards, and, if the PTOs do not meet those standards, for the PTC to impose financial penalties for non-compliance. First, let me clarify that PTC has already imposed a set of quality of service standards on the PTOs. It has been doing so from day one and these standards have been evolving over time in line with rising expectations from the public, in line with the improvement in the fleet size, improvement in buses, and so on. What the Bill does now is to give legislative effect to those standards that have been applied, rather than for PTC to just administratively implement them.

She asked what the benchmarks are, whether PTC would audit the standards and how often, whether public feedback would be taken in. Sir, PTC already has a procedure for auditing the bus service standards. Every year, PTC conducts an annual audit of 50% of the bus services. So each year, they will take out 50%, next year, they will do the other 50%. And when they do the audit, they will audit by checking the headway, the loading factor at peak hours, the

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cleanliness, and all the other issues. It also takes feedback from the public. So if there is repeated feedback about a particular service, PTC will then send people on the spot to check on the complaint. For example, the commuter may say, "Service 123 at bus stop along road X. When it gets there, it is always full and it will not stop." PTC would then send people there to check and make sure whether it is a true complaint. If so, PTC would then work with the bus company to correct the situation. PTC would, every year, take 60 or so bus services that have attracted the most frequent complaints and re-audit them separately. This is to make sure that those complaints that were received in the past had been acted upon and that the bus operators had implemented the changes on a full-time basis, rather than just upgrade for one week and then go back to the poor service again. So PTC does have a system of checking up on public transport.

She asked whether now that PTC has got more regulatory powers we can look into improving accessibility for the elderly and the less mobile. Sir, improving accessibility to our public transport system is an ongoing thing. Members here would know that there is an ongoing process now for installing lifts in all our MRT stations. I think as at today, the vast majority of MRT stations already have lifts installed. And it is only a small remaining number where works are being done, and we expect the works to be completed next year. But for buses, they have already been introducing the low-floor, no-step buses. In fact, I think SBS has in the region of about 80 buses to-date, SMRT has about 10-12 of them. What we are working with the bus company is that all the new buses that are being ordered would have this no-step, low-floor board. Over a period of time, as the older buses get renewed, we would see the fleet increasingly become low-floor, no-step fleet, and it would help the elderly and the less mobile.

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On fare evasion, Dr Amy Khor urged that PTC ensures that the bus inspectors or the public transport officials exercise their powers sensibly and flexibly because some people may actually be making genuine mistakes. For example, the elderly may tap twice at the same time, or they may forget to tap. That is something the bus inspectors have been trained to do. But before they are appointed as the public transport officials, PTC would be conducting a training course to make sure that they are properly trained to handle different situations and to be able to differentiate between those who make a genuine mistake, for example, an elderly who forgets or does not know how to tap versus someone who cheated. What I have been told is that the cases of cheating are quite straightforward. Why? One of the common ways is for a passenger to get on the bus, taps and goes to the backdoor and, when the bus arrives at the next stop, taps as if he is exiting, but in actual fact, after tapping, he just goes back to his seat and he rides from Changi all the way to Jurong for free almost. So those cases are quite easy to detect. The inspector checks the ez-link card which shows that he has already tapped out. If he has already tapped out, what is he doing in the bus? So it is an obvious case of cheating. He could not have tapped out by mistake. It is a deliberate effort. Other cases of cheating which are quite common are abuse of concession cards. They use a school boy's concession card instead of using an adult card and tap. So such cases are very straightforward. It is straightforward cheating and therefore I think the bus inspectors would have no trouble differentiating between those who make a genuine mistake versus those who deliberately cheat.

She also urged that hauling offenders to court should be the last resort. That would indeed be so. In fact, it is already so because the provision of bringing fare

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evaders to court has already been in place since 1987. Because this is a very serious step and one which has been used as a last resort, the PTOs and the PTC have not been bringing anybody to court. They will continue with this practice of using this as a last resort to persuade fare evaders to pay up.

She asked about overcharging due to the system faults. She asked if 0.006% is really acceptable. I think anyone who is operating a system, especially a large system that handles millions of transactions everyday and is subject to the rough and tumble movements of buses driven on roads will know that 0.006% in fact is a remarkable achievement. Nonetheless, as I have said just now, LTA would continue working with TransitLink to see whether we can improve it even further. The vehicle location system works by determining the location of the bus and once that is determined and the system detects that a change in fare stage is required, a signal will be sent to update the fare stage on board the bus computer. Sometimes, as we all know, even those of us using mobile phones, from time to time, we do get a failure in the signal communication. When that happens, you may get an error message going through and therefore the fare stage may not be updated. So if it is not updated, some people who get up at the failure point would be recorded as having got up at the earlier fare stage and therefore would be charged more. But others who are getting down at the failure point would be charged based on the previous bus stop and that means such persons would actually be charged less. So it works both ways. What the experts tell me is that this signal failure is something which is not easy to overcome completely. But I think we have to still try.

On fare adjustment, she asked whether the public can ask for fare

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reduction, and whether a committee could be set up to review such requests and recommend them to the PTC. Sir, we should not be in a habit of setting up committees to advise committees. Can the public ask for a reduction? Yes, the public can ask for a reduction. They can always make a request to PTC and PTC can take a look. If there are good reasons, PTC would do a proper study. But as we all know, labour costs tend to go up. When times are bad, labour costs do go down. But even in bad years, the labour costs for many people were still going up. Spare parts keep on getting more expensive. Now, the fuel price is double what the bus companies were paying two years ago. I think the chances of the fares going up are there. When the fare adjustment formula calls for a fare reduction, the PTC will not hesitate

to enforce one.

Sir, Mr Andy Gan spoke on a number of issues, some of which I have already replied to. He said that the new legislation will result in more constraints for new public transport operators. I do not think that is the aim. The aim is to use the new legislation to regulate the two existing public transport operators. The smaller operators who are running Scheme B, etc, will still be left as they are. They will not be involved at all.

Mr Gan also talked about the Fuel Equalisation Fund. He stated that it requires skilled people to determine what should be the strike price. We do not intend the Fuel Equalisation Fund to be rocket science. This Fund has already been in existence since 1992 and the basis for the Fund is a very straightforward one. We compute what is the reference price for fuel. What takes place in this case is that we take the previous five years' average fuel price as the reference price for fuel. If the actual price of fuel is below that reference price, that means the PTOs will have savings. Those savings will then be paid into the Fuel

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Equalisation Fund so that, when the prices spike, the PTOs can then request for part of their funds to be drawn out to pay for the increase in fuel price. So, it is to act as a cushion against fuel price fluctuations. We, therefore, do not need to have very skilled people calculating what should be the strike price on a daily basis.

Sir, Mdm Cynthia Phua commented that a good bus service should be convenient, affordable and accessible. I agree. Mdm Phua also stated that having the same operator operate both the train and bus is not the best solution and quoted the case of Sengkang. I can assure the Member that there is nothing wrong with having the same operator operating the train and the bus, because SMRT also operates the North-South and the East-West train lines as well as their bus company, and it has not resulted in a conflict of interest between the bus and train operations. That is because the arbiter, at the end of the day, is PTC. It is not the individual operator who says, "I am going to run that service and nobody can force me to do otherwise." It is the PTC that determines where the bus services should be.

Sir, Mdm Phua also asked that we improve accessibility, given that 42% of Singaporeans are over 40 years of age and, therefore, we must make sure that our public transport systems are accessible. Sir, as I mentioned just now, the buses are becoming increasingly so. For the trains, we are already putting the lifts in place. So, for the elderly who are afraid of the speed of the escalators, I would recommend that they take the lifts. Of course, if they are around the stations where the lifts are not yet ready, then they will have to be a little patient with us for another few more months while the lifts are being installed.

Sir, Mdm Phua also asked that small operators be allowed to run feeder

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services, especially on routes where the PTOs are not operating. We do allow that. In fact, many condominiums have arranged for shuttle bus services from their condominium to run to a few condominiums, enroute to an MRT station, and we have allowed that. So, if Mdm Phua has any case of that nature, please do let us know.

Mdm Phua also mentioned that she is disappointed that the ez-link and cash cards are not the same and, therefore, for a person who takes public transport and who drives a car, he would need two different cards. Unfortunately, the technology is different. We have gone onto the ez-link card, which is a contactless smart card because of the speed of transactions. You just tap and, within a second or two, you can already go on, whereas, with a cash card, you have to slot it in. It takes a bit longer. And for a mass transport system, every second counts. So, we have had to go to the latest card that is available, which is the ez-link card. But that is not to say that the ERP system, ie, the in-vehicle unit, may not in the future evolve to one that also uses a contactless smart card. I will not discount that.

Regarding fare evasion, Mdm Phua said that the system is not robust and that is why wrongdoing can take place. As I have mentioned just now, the cases of genuine mistakes are quite easy to sort out. What has happened is that there are people who are deliberately cheating the system, by tapping out before they even intend to get out, and by underpaying, because many people are still paying by cash. So, instead of paying for the whole journey, they pay for perhaps two fare stages, when they are going all the way to the end. So, these are things that a fare system can never catch. At the MRT station, even if a person gets through, he is still supposed to tap. Tapping is a deliberate action. The fact that he sneaks

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past means that, if he gets to the other end, he also has to sneak past another person. So, it is also a deliberate attempt. Again, it is a balance, ie, how fast do you want the gate to close, because you may end up closing onto an elderly person who is walking slowly through the fare gate, if it closes too fast. So, we have to draw a balance between how fast to have the gate closing versus disallowing cheats from sneaking through quickly.

Sir, Ms Eunice Olsen also called for the buses to be provided with greater accessibility. As I have mentioned, this is indeed what we are doing and I am sure, in the years ahead, she should be a lot happier with the state of our buses.

Sir, let me now go on to Prof. Ong Soh Khim, who made a long speech on the penalty fee system and asked whether the $9 million figure is correct or incorrect and whether we should audit it. The fact is that, as long as there are cheats, we should not worry whether it is a $9 million or $7 million loss. So what if it is a $7 million loss? It is still a lot of people who are cheating the system. That is what counts.

Prof. Ong asked how the data was obtained and whether MOT has verified it. Sir, first, the data was obtained by the bus companies using ticket inspectors. They spot-check buses in the midst of a journey. From the bus load of passengers, they know how many people are on the bus. If any cheats are found, they will know how many people cheated and, therefore, over time, we compile the figures: how many people were inspected and, of that group of people who were inspected, say, 10,000 or 20,000, how many turned out to have evaded fares. So, that is how the data was obtained. Have we verified it? No, because, as Members have mentioned, we should not

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be wasting money doing things which are unnecessary.

Sir, our aim is to reduce the number of fare cheats. Even with the system of penalty fees, I am afraid we will still have fare cheats, because the chances of being on the same bus as a bus inspector, or what we call a public transport official now, are extremely slim, as any bus commuter will tell you. So, despite the $20 penalty fee, I think we will still have fare cheats. It is our hope that, instead of 1.8%, it will decline to a much smaller number. At the end of the day, can we completely eradicate this problem? The answer is no. And this is the same situation that happens all around the world. There are always some fare cheats. But let us keep the number as low as possible.

Sir, it was only at the end of Prof. Ong's speech that I realised why she was so worked up by the amendment, ie, because she saw the court-imposed penalty of $1,000 for the first offence and $2,000 for the second offence, as part of a graduated penalty fee system. The fines imposed by the court are not part of the graduated scheme of penalty fees. It has to be a very, very drastic fare evader for any of the PTOs or the PTC to want to send him to court, because we have had this provision since 1987, ie, 18 years already, and we never once had to resort to bringing anybody to court. So, I do not see this provision as being one that is going to be used frequently. In fact, I hope we have it in the books but it is something which we will not have to use.

But Prof. Ong made the interesting suggestion that we should adopt a graduated penalty fee system of perhaps $150, $200 or $250. Sir, definitely, we will keep that in mind when we review the penalty fee quantum in the future.

Mdm Ho Geok Choo asked about the Fuel Equalisation Fund, how it works and

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what the criteria for contributions are. Sir, I have explained part of that already in terms of the criteria for contribution and what it is used for. Mdm Ho asked what is the quantum now. SBST (Bus) today has an FEF balance of $34 million. SBST (Train) has zero. SMRT Bus has a fund of $8.4 million, and SMRT Train $10.3 million. Will the public bear the cost of contribution? Sir, this comes from the savings, because the fuel price is lower than the reference fuel price. So, actually, they save on the fuel. Therefore, the public is not made to bear any part of that cost.

Mdm Ho also asked about the Public Transport Officials, whether there is going to be a new body for this group of PTOs. Sir, there is not going to be a new body for them. Who are going to be the PTOs? They are going to be the existing staff of the public transport operators. So, we do not see any fresh funds being expended either by PTC or by the transport operators on this new group of PTOs.

Mdm Ho asked where the penalty fee would go to. Sir, the penalty fee, for the time being, is going to the public transport operators to help offset the cost of training all these people, as well as the cost of employing them. However, as the numbers caught are so small, I do not think we are going to get much penalty fees. What we are looking for is a deterrent effect, to reduce the number of fare evaders, rather than looking at collecting the penalty fees.

Mdm Ho also asked a legal point, ie, whether the word "honesty" should be inserted into the relevant clause in the Bill. I am not a lawyer, and we have left it to the AG's Chambers to draft the Bill. I am sure they have taken all the factors into consideration and they do not require

"dishonesty" to be put in. In any case, if a person goes in a taxi and jumps out without paying, I do not think we need to worry whether the person has been

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dishonest or not. The fact is that he has taken a ride and he has refused to pay. I think that, by itself, is a telling point already.

Mr Chiam See Tong: Can I make a clarification with the Minister? Sir, I did not at any time in my speech say that I would like benefits given to some commuters to be withdrawn. If I gave that impression to the Minister, I am sorry that I put it that way.

Sir, as regards the penalty of six months and $2,000 fine, my objection is the same as Prof. Ong Soh Khim's. For a 10 cent or 20 cent evasion, the penalty is $2,000 maximum or six months' jail. These are for the second time offenders. To me, that is very high. Why for a 10 cent or 20 cent evasion you are going to fine the person $2,000? That is certainly very high. My objection is on the harsh penalties. So I implied that there might be another reason - to trip the Opposition or whatever.

Sir, I take objection to the Minister for being so personal and asked me whether I would cheat on 10 cents or 20 cents. I think that is very unbecoming of him as a Minister.

Mr Yeo Cheow Tong: Sir, on his first point about giving the wrong impression that he objects to the concessions being given to the elderly, I think that was the impression given to me. If it was not his intention, then, of course, I accept his explanation.

Sir, on the $1,000 and $2,000 penalty to be imposed by the court for first time offender and second time offender respectively, as I mentioned just now, that really is the last step available should a fare evader refuse to pay the penalty fee. If he refuses, he has the ability to appeal to the PTC or to the PTO. If he appeals to the PTC, the PTC will review. And if the PTC finds that the penalty fee which was imposed has been

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imposed correctly, PTC will then require the fare evader to pay up. If he still does not pay, then PTC is able to offer a composition fine. And if he still refuses to pay, then the matter will be brought to court, and it will be for the fare evader to explain to the court why he evaded the fare, or maybe that he did not, that he made a mistake. But it would be up to the court to decide. So, it is something which we have not resorted to previously and, as I said, we do not have to resort to this clause.

Mr Chiam linked that $2,000 fine and six months' jail to the criteria disqualifying candidates from running for election. So I told him that was not the intention. Just as we do not expect potential candidates for Parliament to evade fares, we do not expect Mr Chiam to also evade fares. I am stating a very clear statement that I do not expect him to do so. It is not that I said that I am expecting him to do so, just as I do not expect any of our colleagues here to do so. So he should not worry about that penalty of $2,000, as provided for in this Bill.

Assoc. Prof. Ong Soh Khim: Sir, I refer to the Minister's reply earlier. He said that the Ministry did not verify the $9 million loss in revenue due to fare evasion. And the Minister also said that it does not matter whether it is $9 million, $7 million, $5 million or even $1 million. I would like to say that it does matter as it determines how much will be spent to prevent fare evasion, because we should not be wasting unnecessary money and effort to carry out all these penalty and criminal procedures and charges if the fare evasion is not serious. Sir, in Chinese, it is called yong niu dao sha ji . We need to know whether it is a niu or a ji . We should not be using a knife to kill a chicken.

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Mr Yeo Cheow Tong: Sir, I am sorry I cannot match Prof. Ong on her Chinese quotations. All I can tell her is that if she had been listening properly, she should have heard me say repeatedly, including in my reply just now, that the Public Transport Officials to be appointed are going to be the existing employees of the public transport companies and, therefore, we do not see any additional expense being incurred in enforcement because the ticket inspectors are the ones who are enforcing against fare evaders at the present moment. The same group will now be called Public Transport Officials and be given authority to impose a penalty fee. She asked whether we have verified. The PTOs gave us the data, and we have checked the data. Based on the data, the figure of $8.5 million in fare evasion is correct. Did they go out and verify each time a ticket inspector is out inspecting? The answer is no. But we have looked at the figures, and we have checked the figures, the figures do amount to $8.5 million. As you know, ticket inspectors only do a sample check. They do a random check and they do not do a 100% check. So if you want the figure to be exactly, 100% correct, they have to do a 100% check, which I think is a waste of time.

So, let us agree that there is a problem - it is a problem that exists both in Singapore and elsewhere - let us find our own ways to help reduce this problem.

Mr Deputy Speaker: Mr Chiam, are you raising a clarification?

Mr Chiam See Tong: Sir, I want to clarify with the Minister.

Mr Deputy Speaker: Please make it short.

Mr Chiam See Tong: Sir, in my view, I think it is bad taste of a Minister to

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mention the personal name of a Member of the House, whether or not he would or would not cheat on 10 cents or 20 cents. Even if he did not put it that way, I think it is bad taste - anything that has to do with the implication of dishonesty, with money, or with a Member.

Mr Yeo Cheow Tong: Sir, if he takes offence at my remark that I am sure that he would not cheat, just as all the other Members would not cheat, then I withdraw my remark. I apologise to Mr Chiam for making him feel upset with this remark.

Mr Chiam See Tong: Thank you.

Mr Deputy Speaker: Mr Low, are you seeking a clarification on the Minister's reply?

Mr Low Thia Khiang: Yes. Sir, in relation to the $9 million, I wonder whether the Minister also has figures on the amount of over-charging by PTOs via the ez-link card. The other clarification is in relation to a remark made by Mr Ong Kian Min about whether or not the Minister will agree that the PTC should review its fares yearly. I think he has not answered that.

Mr Yeo Cheow Tong: Sir, using the ez-link system, LTA can have an estimate on how many have been overcharged, and it knows the occasion of overcharging. This is why I said that the number of incidences has dropped to 0.006%. On the amount, I do not think LTA has been able to get the data because you have to go into every ride of each passenger, you have to know when he got up, when he actually got down. And I think that is a task which is almost impossible. But LTA knows that the fare stage has not been

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properly updated because from the data, it knows that it was updated here, it was not updated there and it skipped one updating. But knowing how much was overcharged would depend on who got up there, how many fare stages he covered and his actual physical alighting point. So LTA is not able to obtain that.

Sir, on his second point on the review by PTC, every year, PTC, using that formula, will review the fare adjustments. If the fare adjustment formula results in a fare increase, I am sure the PTOs themselves will submit an application. But where the formula requires the fares to be reduced, the legislation today will give PTC the authority to proceed to review the fare adjustments, and if the formula shows a reduction, then PTC will have the power to order a fare reduction or a fare rebate.

Question put, and agreed to.

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

The House immediately resolved itself into a Committee on the Bill. - [Mr Yeo Cheow Tong].

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