Govt nationalises the MRT, eating back past words and benefiting Temasek Holdings

govt take over smrt

The Government will take over all operating assets of the North-South, East-West and Circle lines as well as the Bukit Panjang LRT Line from SMRT starting from October.

In turn, SMRT will run the trains under license on these lines and retain a share of the earnings. (Details)

The mainstream media outlets stopped short of calling a spade a spade and calling the move “nationalising”, by instead framing it as a “new financing framework”.

Quoting the words used by the Straits Times which “revealed” that the move followed an “agreement” reached between the LTA and the SMRT after “more than four years of intense negotiations”.

That would be a very curious thing to have happened given the PAP government’s strong stance against the idea of nationalistion when the notion was advanced by the Opposition Workers’ Party in the House.

nationalisation has downsides, lui

Then transport minister Lui Tuck Yew and other PAP elements vehemently rejected WP’s nationalisation proposal.

Stealing WP’s idea while denouncing it earlier?

Straight to point, Workers’ Party MP Dennis Tan Lip Fong remarked: “Today the government has announced that they have reached agreement with SMRT to buy over rail assets, or effectively, to nationalize rail assets, for around $1 billion. And I can still recall that when the Workers’ Party brought up the need for nationalization of public transport, it was not well received by members of the government.”

Another member of the WP, Bernard Chen Jiaxi, also had this to say:

“Good to see that ideas of The Workers’ Party are [gradually] being taken up!

The Workers’ Party in its manifesto noted that the government has been moving away from the profit-based privatisation model of running public transport towards the WP’s National Transport Corporation (NTC) proposal to run public bus and MRT operations on a not-for-profit basis of maintenance and cost recovery. The “Government Contracting” model, where the government owns the assets but contracts out service delivery to public transport operators (PTOs), has been implemented in the past few years.

It is reported that the SMRT rail assets will be bought at about $1 billion. How did LTA arrive at this figure? The acquisition of the operational assets of the present public transport operators should be done at fair cost to the public purse. The Workers’ Party propose the price to be paid by taxpayers for the acquisition should be suggested by a panel of independent third parties with expertise and experience in public transport economics. All proceedings should also be made public.

It is also important for us to monitor the implementation of this model to assess whether it drives greater cost efficiency and service quality for commuters. If there are still problems, WP proposes that the NTC takes over the running of public transport services.

WP believes that the NTC should hold a key place in the Government Contracting model. In fact, the ownership and management of rail and bus assets is a dedicated and specialised operational function that should be separated from the planning, development and regulation body (Land Transport Authority, LTA) and tasked to a statutory board. NTC would be tasked to minimise costs and achieve efficiency in the management of the assets. To avoid conflicts of interest and improve transparency, the NTC should operate specialised audit systems to make sure the PTOs meet performance and service delivery standards, while LTA sets regulatory standards and collects the fines for service disruptions.”

Temasek stands to benefit handsomely, and deal was reached without asking Parliament?

Similarly, online media outlet, the States Times Review, also questioned the apparent “huge profits” for Temasek Holdings to reap. It also pointed out that such a deal was reached without Parliamentary consultation:

“The Singapore Land Transport Authority (LTA) today (July 15) announced that it will pay S$1.06 billion to nationalise the assets of SMRT. Temasek Holdings, who own 55% of SMRT, will be the greatest beneficiary of this sale – which is seen as an alleviation to the embarrassing S$24 billion losses reported last week.

The S$1 billion deal is considered finalised even though it is to be pending approval from shareholders of SMRT on the 1st of Oct, because the country’s sovereign wealth fund company is the single major shareholder. The CEO of Temasek Holdings is the wife of Prime Minister Lee Hsien Loong.

Physical assets like trains and signalling system will be nationalised but SMRT will however continue to operate the assets on a 15-year license-basis. SMRT will also be forced to increase its maintenance staff strength by 20% to about 700 employees over the next three years, as the company has been under-cutting maintenance budget resulting in a series of train breakdowns. Although the LTA said that the 15-year license will be open for bidding, there is no open tender this time and SMRT will be the default train operator awarded.

In 2000, SMRT was privatised and now 16 years later, it is nationalised due to greed-driven business principles and a lax transport authority. Many Singaporeans believe the dilapidated state of public transport will remain the same as before because the Transport Ministry and SMRT are still equally forgiving of train breakdowns and mistakes.

The Singapore ruling party government decided the S$1 billion SMRT purchase without consulting Parliament.”

Let’s be fooled again

Looks like some people might be laughing to the bank, and some people who should take responsibility get credit instead, and the people of Singapore get fooled once again into thinking these bad guys are God who never did steal other people’s ideas while denouncing them.

Photo-of-Khaw-Boon-Wan-from-Facebook

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