So, after reading reports about the public transport operators and the problems they face (fuel costs, manpower, etc) it all boils down to one thing - the bus operations. Since 2 years ago (at least) reports have surfaced that the bus operations of the PTOs are bleeding money. The rest of their operations - including their overseas operations/businesses (China, Australia, Vietnam, etc) - are all making profits. Which is why SMRT and Comfort Delgro (parent of SBS Transit) both made millions, not only last year but in previous years as well. One report after the fare hike announcement above the rest was very telling. It is by TODAY, titled: Financially ailing’ bus sector to benefit more from fare hikes. Out of the projected S$53 million which the PTOs will reap from this latest fare hike, bus operations will receive a S$48 million boost from the hike, while S$5.5 million will be allocated to MRT operations. So, what does this say? Seems to me that the PTC/Govts position is that every aspect of the PTOs operations must be profit-making. And if any part is not, fares will be increased to make it so, or at least to limit the bleeding. Otherwise, there is no reason to increase fares, given that every other aspect of the PTOs business is making profits, and healthy profits at that. This fare hike seems to be to save the bus operations from bleeding further - which also explains why the Govt gave it S$1.1 billion last year, to help the PTOs buy 800 new buses and also to fund their operations FOR THE NEXT 10 YEARS! It makes you wonder when the bleeding will stop and whether commuters will have to continue to be fleeced. I think there is a need to look deeper into the bus operations and why there is so much loss. As a report last year said: -------------------------- -------------------------- National University of Singapores transport economist Anthony Chin points out that it is not possible to separate bus operations from the groups overall operations. Bus operations are meant to feed into the train system which forms the backbone of Singapores transport network. They are not intended to be profitable on their own, he said. This is why both operators are also allowed to run train operations: SBS Transit runs the North-East Line, which produced $19.7 million in operating profit for FY2011. SMRT has the North-South, East-West and Circle Lines, which yielded $91 million in operating profit for FY2012. Taken together, SMRTs bus, train and LRT operations made $79.1 million in operating profit. ComfortDelGros total for these segments contributed $13.7 million in operating profit. In other words, the operators core business of running public transport services in Singapore is profitable, even if bus services alone are not. If revenue from advertising and rental are included, the profits are higher.
Posted on: Sun, 19 Jan 2014 04:33:13 +0000
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