Transportation systems a profit driven duopoly

As of late the prospect of a transport fee hike , have been the topic of the general populace and have been actively discuss in forum by the netizen. The resistance to such a raise has no doubt been steadily gaining traction , after all who can blame us?. Wasn’t it last year they made a profit of 200+ millions? . so where was the cost pressure they mention? cost pressure to maintain a higher profit margin?.

Adding to the Woes of the Transport Ministry is the Worker Party call to switch these public transport to a cost basis recovery model rather than the usual profit driven one. This call to a Cost Recovery model is no doubt a popular one , but is this model the right one?. Considering that most nationalised transport company are very inefficient and ineffective.

Even though Mr Lui reply(This is how politics should work , question and answer in a civilize manner) was very vague and very “SAF” it no doubt highlight a very important point , is that a public transport model with the basis of a profit-driven company will be a lot more efficient and effective.

But in the word of Mr Lui “it is not unreasonable for the PTOs to earn fair returns from the sizable capital investments ” . Wasn’t the public infrastructure built by the government? also if there is no bus purchase , wouldn’t there be no service? Not to mention that the cost of buying the “transport” is included in the expenses. Which clearly shows a large profit? or can he perhaps enlighten me.

Also is there a true competition in Singapore , where there a considerable barrier of entry making it seems like a duopoly . How can you expect a Profit-Driven company be efficient when customer have no alternative?. A good example would be the domination of Singtel until the entry of other phone provider. Which change the whole system.

So if is it fair to us Singaporean to base our transport model on a “cold” profit driven company. Also is it the right step forward for a cost-recovery model?. Why not a middle ground where we would have a profit-driven company with a moral heart.

This also can be easily implemented , by the top of my head is a yearly rebate in terms of EZLINK credit based on the “extra-ordinary” profit they garners. This extra profit can be calculated by having a fix model like (Netprofit – 100Million(half of their current profit)= extra $$ to be distributed. Or they can perhaps aid the poor with this calculated sum , such as free monthly top up for income less then $600. There is much possibility for them to “return” to the society , yet allowing them to maintain profit as reserve for the companies needs.

Now the question is would the largest shareholder (you know who) allow such a system?