Thursday, 3 May 2012

Public Transport: Shareholder or Public Interest, First?

The Straits Times report, 3 May 2012

How much beating can one's reputation endure?

Following a dip in the share price of the SMRT, projected lower dividends and increased spending on upgrading Singapore's 25-year-old rail system, analysts have suggested to the news media that Singapore's rail system could be nationalized. 

Should the SMRT - or the state - run something as critical as a country's public transport system? Is nationalization the answer? Not according to the Government Parliamentary Committee for Transport, quoted in media reports. 

Like many Singaporeans who ride the trains daily, as far as I'm concerned SMRT provides a public service. I'm happy as long as the train arrives on time and takes me to where I'm going, with little disruption. This should be the SMRT's over-riding mission.  My guess is that the analysts who ride the trains to work daily agree with me, and I'd like to think the SMRT agrees too. 

The fact is, SMRT is public-listed. It's run like a business, and businesses are  accountable to their shareholders. Its stock performance of late puts further pressure on its management to serve shareholder interest. 

Unlike its shareholders, commuters don't care about its share price. We care about making it safely and on time to our destinations.  The prevailing situation with frequent breakdowns in service is dire enough to spur intervention at the highest level of government. 

To what extent is state intervention justified? For netizen George Wong,  "SMRT is not a real company, there's no competition. So it must reinvent itself with management and KPIs that reflect its role as part of the nation's integrated transport system." 

In spite of the inherent challenges and vested interests surrounding nationalization, current chatter about this issue is healthy and should be studied. The seed has been planted, so let's give the relevant parties time to warm up to the idea, however long it takes.

The SMRT's reputation has endured a brow beating. It will need time to sort out its operational issues, rebuild and regain our trust and confidence. The proof is in the pudding. Time will tell if it will make good on its promise to upgrade and serve public interest as well as it has served its shareholders.

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