SMRT see-Sawing

I must apologise for not updating the blog for several weeks. But I'm back now.
Kicking off with the most talked about story on PerezHilton.com, the Mass Rapid Transit.

After the 2010 World Cup, Brazilian coach Dunga offered to step down after the country's failure to get past Netherlands in the quarter finals. Reaching the last 4 of arguably the world's most prestigious and competitive tournament is no easy feat.
But in a nation which is football crazy and that once was the global leader in the sport, this is failure.
In any case, Dunga was promptly fired by the CBF.

The UK faced one of its worst winters in recent times last Christmas, leading to the resignation of Scottish Transport Minister Stewart Stevenson for failure to tackle the travel chaos.
In the words of Scottish Labour leader, "Scotland had lost confidence in the transport minister and it was only right that he should resign..."

If you recall, state-owned monopoly SMRT picked up the "Best Passenger Experience" award in an annual conference in 2008. The win was debatable even then, more so if you've ever taken the trains in Seoul, Taipei or Hong Kong.
Since then, SMRT has come a very long way. A long way down.
I documented in September about the less than stellar track record of the rail operator.
Two months later, SMRT's CEO Ms. Saw Phaik Hwa was given an extra 176, 600 shares as a reward for "performance". This is equivalent to S$332,008 at Nov 11 closing price of the stock.

Much has been said on and offline about the recent spate of SMRT malfunctions. I will not list the details since the Singapore Democrats have already done so here.

Don't get me wrong, I'm not advocating that a leader should always step down when things go wrong. Everyone should be given a second chance to redeem themselves.
What is clear here is that Ms. Saw oversaw, no pun intended, and presided over a spate of breakdowns over the last two years, in addition to two hugely embarrassing graffiti incidents.
As CEO, she obviously had ample opportunities to put things right but no.

As of today, SMRT trains are running at increased intervals. Waiting times have shot up and queues have gotten longer. And they are going just about as fast as Cinderella's pumpkin carriage.
Retailers are reportedly hit, people are late for work and some couples even cancel their dates. In short, SMRT has adversely affected the lives of many Singaporeans.

But our transportation woes lies deep within the system...the same regime that took quite a few brazen gambles over the last decade. Not just the casinos but the irresponsible immigration policy to prop up its "GDP growth at all costs" model.

You see, when the first SMRT trains started running in 1987, I don't think the urban planners then  envisioned over 5 million people squeezing into this island in such a short period of time. Singapore's resident population then was just 2.7 million.
To make matters worse, our current generation of Ministers keep getting caught off guard, using stop gap measure like ERP, COE etc to "regulate" the system.
Minister for Transport Lui Tuck Yew's comments summed his party's inaptitude perfectly:

 "There have been a number of train disruptions in recent days. I do not know if these are isolated incidents or whether there are systemic and more serious underlying issues causing these breakdowns."

Ms. Saw's position is totally safe for now. This is because Ong Ye Kung, who also happens to be a PAP MP, is on the Board of SMRT. And out of sheer coincidence, he's also tasked to carry out this on-going independent investigation into the breakdowns.
So with salary that is higher than any former SMRT CEO and a position with zero accountability, this lady is here to stay.

SMRT and SBS to increase fares.....again

For the whole of 2009, the Hong Kong MTR made US$77 million from advertising revenues. Because this was a significant drop from the previous year, probably due to the '08 financial crisis, the management promised to go all out to bring in additional ad dollars.
Check out some of their digital campaigns here:

If you've been to Kuala Lumpur recently, you will see lively advertising in their metro stations.

Contrast this with SMRT. The billboards lining Tanjong Pagar and Raffles Place stations are mostly empty. These are probably the stations with highest human traffic as they are located in the heart of our business district.
And the economy surely can't be in recession when State Media reported today that Mastercard claimed there was a 49% rise in spending on their cards in the first month of the Great Singapore Sale compared to last year.

Train operators rely on advertising revenue to boost earnings in bad times and to combat rising costs of operation among other things.
That naturally means they need a well trained and motivated sales force to solicit advertising business.
And Singapore is the home to many consumer goods HQ so there can't be a lack of corporate targets.

So why doesn't SMRT (and SBS) appear worried at the lack of ad dollars?

Because they can increase their fares any time they want.
It was reported today that both SMRT and SBS are seeking the maximum fare increase. What gall!
Unlike many cash strapped operators in other countries, SMRT's FY11 revenues grew y-o-y to reach nearly 1 billion dollars.
You can see from the table below that with the exception of FY 2009 and 2010, growth in car kilometres operated did not keep pace with the growth in ridership.
That means SMRT did not adequately increase service levels despite the surge in Singapore's resident population over the last five years.
This would explain why trains are overcrowded, air-conditioning faulty and the numerous breakdowns.

Yet they have the cheek to consistently seek fare increases because they just be bothered to look for alternative sources of revenue like ad dollars or increase productivity?

I wonder what the Public Transport Council (PTC) has to say about the latest request for adjustments.
Since PTC is a statutory board under the Ministry of Transport, Lui Tuck Yew and PAP must also be held responsible if the PTC approves the latest round of profiteering by our public transport operators.

But there is nothing out of the ordinary here. Prices and fares of most public services go up after Elections. Thanks to the 60% daft Singaporeans, we should brace ourselves from yet another vicious cycle of price hikes.

In any case, SMRT has lots to learn from a truly world class system--- The Seoul Metro.