Manpower cost is one of the reasons for fare hike?! Relook at the Remuneration of Directors!!

SMRT - Remuneration of Director - Annual Report 2010

SMRT - Remuneration of Director - Annual Report 2009

SMRT - Remuneration of Director - Annual Report 2008

The above screenshots from the annual report of SMRT - the reports can be downloaded here.

Yes. The figures are quite a shock to me, thus I dare not check the annual report of SBS. (I pity my weak heart, you know?)

Just take a look at the total remuneration of Ms Saw Phaik Hwa, the SMRT President & CEO for the last 3 years. On year 2008 hers was $1,310,298 and on year 2009 it was $1,560,334 and on year 2010 it was $1,668,747.

SMRT shareholders, what say you?!?!

Was this issue not raised during the annual general meetings? The remuneration figure from this post alone is such a staggering no.

To propose for a fare hike without even putting an effort to REDUCE this ridiculously high remuneration figure is very insensitive of SMRT.

C'mon, SMRT, you can do better than this!!

The two public transport operators, SBS Transit and SMRT, have submitted applications to the Public Transport Council (PTC) seeking bus and train fare adjustments.

Both cited significant cost pressures despite increased efforts to lower costs and increase productivity, and have asked for the maximum fare adjustment of 2.8 per cent.

Escalating energy and manpower costs prompted SMRT to seek for a maximum fare adjustment of 2.8 per cent.

It said this is based on the annual fare adjustment formula that takes into account the consumer price index (CPI), wage index and productivity gains.

It said energy costs rose 17.5 per cent to S$122.4 million as of this March, due mainly to higher electricity and diesel prices, and the expansion of the rail network - with the opening of Circle Line Phase One and Two.

More staff also had to be hired to operate additional train and bus trips to meet rising commuting demand.

Manpower costs also increased as a result of a higher employer's CPF contribution rate, from 14.5 per cent to 15 per cent in September 2010, and to 15.5 per cent in March 2011.

SBS Transit said it is also facing costs pressures for fuel and energy, on top of investments in new buses to renew its fleet.

The renewal exercise first began in 2006. Last year alone, some S$268 million was spent on another 600 buses to be delivered in 2011 and 2012.

SBS Transit said more details of the application, which is subject to the approval of the PTC, will be announced at a later date.

Gerard Ee, chairman of the PTC, told MediaCorp there is a need to assess the basis of the applications and to check the accounts of operators - a process that is likely to take some months.

The last time bus and trains fares were increased was in 2008. Back then, the PTC approved an adjustment of 1.7 per cent which translated to a fare increase of about one to three cents for commuters.

Commuters hope that increases, if any, this time round will mean better services.

One commuter said: "They have to do something about the comfort level. Probably the service, especially during peak hours."

Another added: "I think with all the inflation and stuff, the increase is unavoidable. But they have to do something about how the passengers are during peak hours; especially during the rush hour, the bus is especially packed."

A third commented: "The charges are too expensive for senior citizens like me."

The new Chairman of the Government Parliamentary Committee for Transport, Cedric Foo, said he would like the Transport Ministry to review the fare adjustment formula.

This includes how the government can assist the needy in coping with public transport costs.

Mr Foo, who is also a Member of Parliament for Pioneer, said the fare formula has been in place for more than five years, and sufficient experience has been gained on how the formula had or had not worked.

Earlier this year, the PTC deferred the fare review exercise to coincide with the opening of the last stage of the Circle Line this October.

From Channel NewsAsia, "SBS Transit, SMRT submit applications for fare adjustments".

I am dismayed that the transport operators are seeking an increase in public transport fares, especially when these were adjusted last year. I am more appalled that SBS Transit and SMRT have applied for the maximum increase of 2.8 per cent for all rail and bus fares.

"Uncontrollable" and "significant" costs pressures have been cited as reasons. Yet SMRT's and SBS Transit's net profits last year stood at a healthy S$161.1 million and S$54.3 million respectively, despite a marginal drop of 0.6 per cent to 1.1 per cent. Is it justifiable for them to seek a fare increase when fares have risen steadily since 2007, bar 2009 when fares were reduced slightly due to the recession?

I can understand that due to inflation and other factors, a business has to raise prices to maintain their profit margin. However, since public transportation is a public good, the industry has to be better regulated such that the public does not feel exploited.

With the sector facing a barrage of criticism due to common lapses, an increase now will not sit well with many Singaporeans, especially the low-income families and NSFs, many of whom spend about a quarter of their allowance on transport.

Operators have to ensure the system is better run before they think to raise prices. For example, despite the SMRT declaring that trains arrive at 1-minute to 2.5-minute intervals during peak periods, often I see trains arriving at 5-minute intervals.

This is especially so on the North-South line, where alternate trains leaving from Marina Bay terminate at Yishun instead of Jurong East, leaving many passengers having to alight and board the next train to continue their journey. It means trains leaving Yishun are so packed that commuters at subsequent stops like Admiralty cannot board.

Buses do not fare much better, with certain services perpetually overcrowded or prone to delays during peak hours. SMRT may have invested in new buses, but have these resulted in better frequencies? If not, I believe most commuters would rather take an older model bus but reach their destination quicker.

Unless the operators tackle these problems and prove to us the fare hike is justifiable, the authorities should not approve their request.

From Today, "How is fare hike justified when ... | Letter from Wee Jun Jie Aaron".


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