Putting Commuters First in Public Transport

Mr Deputy Speaker, Sir, a good public transportation system is critical to our city, people and economy. With 13 straight years of ridership expansion, Singaporeans are highly dependent on this public good. The Government's drive towards a car-lite society creates a stronger imperative for a seamlessly working public transport system. The feedback from the ground on the most recent Fare Review Exercise has presented us in this House with a timely opportunity to look critically at our public transportation system. Our starting point must be to put our commuters first over other stakeholders and be world-class leaders in areas, such as reliability, affordability and quality.

On the issue of rail reliability, not too long ago, Mass Rapid Transit (MRT) breakdowns became a familiar, yet unwelcome part of our news cycle. Our bus services were inadequate to fully run parallel to our train systems, and private bus operators had to be called in to help with some of the major breakdowns in the past few years.

The Government has more recently injected public funds to nationalise our public transportation assets and infrastructure. Various schemes were rolled out, aimed at expanding and upgrading its public transportation infrastructure. One can only imagine what would have happened if the Government had not chosen to invest and kept to its previous stance of leaving entirely to market forces.

With these investments, we have seen Mean Kilometres Between Failures (MKBF) improve from 180,000 train/kilometres (km) to 661,000 train/km between 2017 and the first three quarters of 2018. With a new reliability target of one million train/km by 2020, it may appear that our train reliability is on the up.

But train delays are not really a thing of the past, as can be seen in the recent train delays late last year and early this year. Let us also not forget that the latest MKBF statistics did not include delays caused by the signalling works which the Singapore MRT (SMRT) and Land Transport Authority (LTA) have reportedly agreed to exclude, nor did it include delays of not more than five minutes.

MKBF measures delays of more than five minutes. Notwithstanding their exclusion from the internationally used MKBF benchmark, commuters may still have lingering doubts on the reliability of our MRT system if we completely disregard delays of not more than five minutes.

MKBF is also an operational metric that may not truly measure the convenience to passengers, a point made in a 2013 Organization for Economic Co-operation and Development (OECD) International Transport Forum discussion paper entitled "Measuring and Valuing Convenience and Service Quality". The authors also mentioned that measuring delays from a more customer-focused perspective requires appropriate data collected in a sufficient level of detail, such as number of passengers affected and passenger hours delay. Such data do not seem to be within the public sphere currently and will be necessary if we are to move towards a holistic commuter-centric public transport system. In other words, convenience and service quality should be measured and reported.

With such big investments as I have mentioned earlier, the affordability of fares is crucial. Even as we are second among 12 cities in affordability from a recent Nanyang Technological University study, our focus should be on Singaporeans and how they are impacted by fare prices. Indeed, the yearly review of transportation fares by the Public Transport Council (PTC) is always closely watched by the public. The 2018 exercise saw the first use of the revised Fare Review Formula with a new component known as the Network Capacity Factor (NCF), and the first fare hike which hit the cap of 4.3% in over three years drew many negative responses from citizens.

Even as the Government has argued the case for NCF, there are many other views expressed about this new component. One Straits Times' reader expressed that this factor is akin to taxing commuters twice. Current Nominated Member of Parliament, the hon Assoc Prof Walter Theseira, opined that the factor makes a rise in fares more likely, as capacity will rise faster than ridership in the short term. Straits Times' Senior Transport Correspondent Mr Christopher Tan also pointed out the irony that a negative NCF will imply more crowded buses and trains, an outcome that no commuter wants to see.

For now, I note in passing that, even as SMRT and Singapore Bus Services (SBS) Transit are mandated to transfer 5% of the added fare revenue to the Public Transport Fund that funds subsidy vouchers for vulnerable groups, we must maintain a vigilant watch on the impact of such fare hikes on our disadvantaged groups, especially the groups that still prefer cash transactions that saw the highest fare hikes. Perhaps the Minister can share on how the Ministry of Transport (MOT) intends to help such individuals transit to cashless payments.

Our public transportation system needs to deliver on quality, most important of which is the punctuality of services and the minimising of all delays. Beyond that, it will also require timely and accurate information to be delivered by operators on matters of relevance, such as service disruptions, minimising bus bunching, ensuring a comfortable ride and cost-effectively, improving physical comfort, such as improving ventilation on our open-air MRT stations and bus interchanges.

We understand that current service quality lapses are penalised with fines, but have these fines exercised a sufficient deterrent effect thus far, including delays of not more than five minutes?

There may be scope to include service quality in our fare regulation framework to incentivise public transport operators (PTOs) to work actively on service quality and to maintain a higher standard in these areas.

All of the above requires entrenching a service culture among our operators, one that places the commuters at the heart of everything they do. This is, of course, easier said than done. Our public transport personnel need to be understanding when facing problems and take flak from disgruntled commuters with a smile. At this point, I wish to put on record the sincere appreciation we in the Workers' Party have for all public transport workers tirelessly working to ensure that our systems are running smoothly.

Many Singaporeans spend a good part of their lives on public transport. As a public good that is inextricably tied to quality of life and is critical for our economy, we must spare no effort in evaluating all transport policies to ensure that we put our commuters first and be class-leading in reliability, affordability and quality.

Here, I would like to put forth some suggestions for MOT to consider in improving our public transportation system moving forward.

Firstly, we can do more to incentivise better monitoring of reliability and service quality by PTOs. Beyond and alongside the traditional measure of MKBF for more than five minutes only, I would suggest having other categories of MKBF for all incidents, such as less than five minutes, between five and 30 minutes and more than 30 minutes.

Alongside an expansion of MKBF metrics, we can be more holistic in our approach to measure reliability. Seeing that SMRT is part of the Community of Metros (CoMET), we can also get our rail PTOs to work towards a full implementation of the CoMET scorecard, with disclosure of its results on a yearly basis to the public. Covering areas, such as customer, environment, safety and so on, it is a balanced approach to understand the public transport system and align operator incentives to improve our public transport system beyond just the current singular metric that is operationally focused.

LTA and PTC do run surveys to gather feedback. A recent survey for the 2040 Land Transport Master Plan has concluded that commuters prize convenience the most in Singapore’s land transport system, followed by connectivity and fast travel time. However, the survey did not touch on the reliability and affordability of our future public transport.

As for service quality, while LTA and PTC do run surveys of customer satisfaction for public transport, the numbers of satisfied commuters look very high compared to a similar survey run by the Institute of Service Excellence (ISE).

Perhaps third-party evaluators like ISE which run independent surveys can provide a picture less likely to draw accusations of bias. Such independently derived scores can then be directly factored into the Fare Review formula where positive commuter experiences should be rewarded while stagnant or negative commuter experience should be a factor against fare increases.

Next, in November 2016, the Government said that PTC had excluded service quality as a factor from the Fare Review formula as the plan was for the Government to, I quote from Minister Khaw Boon Wan in his answer to a Parliamentary Question on 7 November 2016, "regulate and work with the operators independently to improve service levels" and, in doing so, kept the – and I quote from Minister Khaw again – "fare formula relatively straightforward, without the complication of differentiating fare adjustments on account of service quality". But has this really worked as intended?

I believe that a direct link between the ability to raise prices and service quality will help to improve the total commuter experience. The inclusion of service quality as perceived by the commuters themselves, realistically measured by an independent body, can help mitigate the risk of operators raising fares as a result of pursuing other goals at the expense of service quality. I should emphasise that service quality should be merely one of the factors and not the only or predominant factor.

Some may argue that with the recent improvements we have seen in MKBF, it is unnecessary to link fare review to service quality. However, if MKBF and overall service quality are both truly improving, that is all the more reason why now is a good time to introduce service quality as a factor in the annual Fare Review exercise to ensure that service quality will keep improving and not go backwards in future.

My second point, also related to the topic of fare review, is that we ought to consider including the profits of PTOs as one factor in the Fare Review formula. The size of operating profits derived from both transport and transport-related lines of business, such as retail operations, should be one of the factors considered in allowing fares to be raised but not the only or predominant factor.

To any who may proffer the superficial view that this would create a perverse incentive for PTOs to run their outfits in such a way as to lower profits, so as to be allowed to raise fares, my reply would be that no reasonable profit maximising company would deliberately lower profitability so as to increase the chances of being allowed to raise fares when the linkage between profitability and fare review is small and indirect.

My proposal is not without precedent. In Hong Kong’s formula for adjusting their Mass Transit Railway (MTR) fares, the Fare Adjustment Mechanism (FAM), the profits of the MTR Corporation are set within the factor of productivity, where "productivity" is revenue from the corporation's Hong Kong transport operations divided by its expenses relating to its Hong Kong transport operations. In a public consultation in Hong Kong on FAM in 2016, the Hong Kong government noted that (a) a majority of the public submissions requested that the profitability of the MTR Corporation should be reflected in the FAM, (b) when the profit of the MTR Corporation in a particular year reaches a certain level, the MTR Corporation should not increase fares", and (c) a new "profit factor", which reflects the profit made in a particular year, should be added to the existing FAM formula to reduce fare increases.

Hong Kong's experience can offer insights into how Singapore can go about tweaking our Fare Regulation Framework to account for newly proposed factors.

It is possible for us to factor in profit via the current Productivity Extraction Factor. This would be to redefine or tweak the current definition to account for the PTOs' profitability. Since Productivity as a factor is a minus, any increase in this factor would lead to a lower fare hike for commuters and will be more equitable for commuters. The extent of profits in an oligopolistic, highly regulated industry with huge barriers to entry like public transport cannot and should not be completely irrelevant to the ability to raise fares.

Third, there is room for PTOs to put in more of their profits from their operations into our various funds investing in long-term public transport quality. Currently, 5% of additional fare revenues earned by the PTOs are transferred to the Public Transport Fund to subsidise vulnerable groups. A further step can be taken in this regard. Retail operations in MRT stations will not be profitable without the infrastructure in or around the stations. Mandating a level of profits from retail operations to be added to the Railway Sinking Fund and the Rail Infrastructure Fund will move us towards a more equitable development of our infrastructure. Having benefited from the fleet expansion through the Bus Service Enhancement Programme (BSEP), a similar profit transfer mechanism can also apply to our bus operators leasing and operating the various bus interchanges.

Fourth, timely information is needed about service disruptions and planned early closing announcements. There are still many commuters that are less technologically inclined and may not have the needed apps installed. We can consider a multi-channel, multi-platform and multilingual approach to send out broadcast messages on service disruptions, planned early closings and late openings, for example, via electronic notice boards and radio, not unlike what the Ministry of Home Affairs has done with alerts in times of emergencies.

Information that is being piped out must be both timely and accurate. Complaints of inaccurate estimated waiting time, information about alternative bus arrangements and even lack of reports of delays by PTOs are common over social media. The Government should work to ensure that such complaints will become a thing of the past.

Lastly, while the bulk of the attention is now rightly given to our oldest two lines, we should not forget that our other lines are reaching their age milestones as well. To not repeat past mistakes, the Government must have renewal plans in place. I am, therefore, glad to note that there will be major enhancement and renewal works for the North-East Line starting in 2019. With this in mind, I would like to call on the Government to commit to major renewals for rail assets under the new Rail Financing Framework at every 15-year milestone. Deputy Speaker, Sir, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Deputy Speaker, a convenient and efficient public transport system is critical to our city, people and economy. To become a car-lite, clean, beautiful and liveable city, public transport must be people's prime mode of transportation. To build a convenient and efficient public transport system, reliability, affordability and quality are three important factors.

Rail reliability is a continuous work in progress. We noticed that the Government has, indeed, increased investment in rail assets and infrastructures, and there was improvement in MKBF in 2018. However, there is a drawback by focusing on MKBF only, because it means that we are only paying attention to delays of more than five minutes and ignoring those delays that are less than five minutes.

Last year, when we reviewed the Fare Review Formula, a new factor was included as one of the considerations, and that is the network capacity which shows the commuter volume and usage rate. This is to better reflect the changes in operating cost.

We must pay close attention to the impact of fare hikes on the vulnerable groups.

We need to ensure that the public transport system can provide high-quality services, such as physical comfort, timely and accurate information. Here, the Workers’ Party would like to thank all our public transport workers. The public transport system is critical to our economic and social development. We must spare no effort to improve the system. Hence, I would like to put forth five suggestions.

First, engage third-party independent bodies to conduct investigations, and use a scorecard system and service quality as part of the Fare Review formula. This will not only incentivise the operators but also monitor the overall reliability and service quality.

Second, include the profits of PTOs as one factor in the Fare Review formula.

Third, put back a level of profits from retail operations into the Railway Sinking Fund and the Rail Infrastructure Fund.

Fourth, adopt a multi-channel, multi-platform and multilingual approach to send out timely and accurate messages about service disruptions.

Fifth, the Workers' Party urge the Government to commit to major renewals for rail assets every 15 years under the New Rail Financing Framework.

In conclusion, it is still too early to pat ourselves on the back on our current progress in our public transportation system. There is still work to do in improving our public transportation system, particularly in providing better commuter experiences in areas, such as reliability, affordability and quality.

(In English) In closing, we should refrain on patting ourselves on the back on our current progress in our public transportation system. There is still work to do in improving our public transportation system, particularly in putting our commuters first over other stakeholders in areas, such as reliability, affordability and quality.

Mr Deputy Speaker, I thank Mr Dennis Tan for his speech and for his comments. I was worried as he began that he was about to deliver my Committee of Supply speech on my behalf because I heard that he wanted to put commuters first – so do I; that he wanted to thank public transport workers – so do I; that he believes that reliability, quality and affordability are important components of our public transport system – so do I.

I got a bit more worried because he went on to congratulate us for 13 straight years of public transport ridership growth and we are quite proud of that. Thank you very much. He confirmed that our reliability has improved on a regular basis, in fact, exceeding expectations, to 670,000 MKBF when we have set ourselves a target of 400,000 MKBF for this year. So, I take it the Member agrees that we have a world-class public transport system and it is largely supported by the models and the direction, the efforts that we are making and I thank him for his kind words.

The Member has made some suggestions about how we can improve, and these suggestions are worth examining as we have to consider how we can achieve the aims that we have set out and that he agrees with.

Any suggestions for improving our public transport system, there are a few preconditions that we have to think of first as we assess. The first is: do we have existing mechanisms? In truth, every mechanism has a cost – a cost in time, a cost in compliance burden, a financial cost, and cost effectiveness. So, do we have existing mechanisms? What are these existing mechanisms? How do they work?

Secondly, we have to ask: are our existing mechanisms effective? Are they getting the job done?

Thirdly, we should ask, "How are Singaporeans responding?" How is our system responding? Before we get into that, we might also ask, "Are we actually already doing some of the things that Mr Dennis Tan is suggesting or anybody is suggesting?" For some of the examples that Mr Dennis Tan is talking about, there is a financial basis to incentivise better operations. You can look at it from the profit point of view, you can look at it from the fare point of view, you can look at penalties, you can look at it as where you redistribute it. But essentially, you are using money to incentivise better behaviour on the part of the operators and taking some of that money and rewarding commuters.

So, there are two arms to it – financial penalties or financial rewards, and then how you return it to the system or the commuters. Frankly, as the Member has described in great detail, we are doing that in a number of ways, across a number of mechanisms, using a variety of models with different operators.

Are we trying to get more information out to commuters that are affected? Certainly, we are. Electronic notice boards, social media, broadcast messages. We are experimenting and trying. Certainly, we can do a lot better and we will continue to experiment and to attempt to service Singaporeans better as they take public transport.

Let me go into some of the discussion about mechanisms and effectiveness. I would start by saying, firstly, MKBF is not the only metric that we use. Mr Dennis Tan suggested that we should broaden our consideration of what counts. MKBF is one. There are a whole bunch of other things that we do in our regulatory framework as we interface with the operators. MKBF is only one of those.

How do we regulate? Well, we have operating licences. We have codes of practice. We have maintenance performance standards, operating performance standards. These are codified, they are written down, they are agreed upon and, as a result of which, LTA and the operators work very closely together. We have engineers who are embedded in the operator teams; reports come up to us on a regular basis. Failure at any one of these points can result in a financial penalty, as the Member has described on my behalf. Thank you very much.

But not only that. These frameworks, we can tighten them on a regular basis. LTA has been tightening them and adjusting them and making them more effective on a regular basis.

Another mechanism is the model that we use. We transitioned to the Bus Contracting Model in 2016, the new Rail Financing Framework in 2018. We have used models, such as the BSEP, to increase the capacity for buses. We have invested in engineering capacity, we have invested in how to develop capability locally. These are all a variety of mechanisms to improve reliability and improve quality as we put commuters at the heart of the experience.

On top of that, we have worked quite hard around inclusion. We have tried to make sure that it is not just about the capacity, not just about what we can do technically, but also how we can reach out to a greater number of Singaporeans. Today, all MRT stations have two access routes which are barrier free, wheelchair-accessible lifts, all trains have wheelchair space, all bus interchanges are barrier-free, we are able to do wheelchair boarding, wheelchair-accessible toilets. This is not to say that we have done everything. We have not completed upgrading all the bus stops. There are bus stops that are not entirely wheelchair-accessible. We are up to 97%. We will slowly close the gap.

We have installed nearly 50 lifts at pedestrian overhead bridges as well as 200 km of covered linkways. We are moving aggressively to make sure that public transport is available and accessible to an increasing number of Singaporeans. We have committed to making sure that eight in 10 households will be living within a 10-minute walk to the MRT station. We have been increasing the number of rail lines, the number of trains as we move along that journey.

We have increased capacity – buses, trains, rail lines – carrying capacity. We have increased inclusivity: more and more Singaporeans are able to access our public transport system and services. Not only that.  We have worked on increasing affordability.

Over the last five years, fares have gone down by 1.2%. Mr Dennis Tan is concentrating on the most recent fare review. He is at liberty to do so. But on average, we take a slightly broader view. Over the last five years, fares have gone down by 1.2%. In that time, wages have risen by 17.7%. Inflation has gone up 6.5%. On balance, the amount that people spend on fares out of their household income has gone down. It has gone down for the second quintile, and the second decile. We measure this; we track this. And we know that, on average, expenditure as a proportion of your income has gone down.

Not only that. Less well-known is the fact that 1.8 million commuters are on some form of concession schemes. The biggest single group are seniors, and that will only continue to rise as our population slowly ages. But students, full-time National Servicemen, low-wage workers, a whole lot. Out of our population, 1.8 million of the people who regularly use public transport on a daily basis are already benefiting from the concession schemes that we have. They had an even lower increase in the last fare review that Mr Dennis Tan was talking about, at only one cent.

So, we have worked hard to make these mechanisms work for us. As a result, reliability has improved, affordability has improved, inclusivity has improved. So, we believe the mechanisms are effective.

As Mr Dennis Tan has pointed out, these mechanisms are resulting in an increasing number of Singaporeans choosing to take public transport. Year-on-year growth of ridership, a greater proportion of Singaporeans at peak hours choosing not to use private vehicles as their primary mode of transport and choosing to use shared public transport. Satisfaction levels have risen in tandem as well. That would all suggest that we are moving in the right direction.

Perhaps, we need to consider some mechanisms to make sure we maintain our trajectory. I think that is reasonable. But if we are already doing some or many of these things, we should refine them, get them right, tweak them, make them better. But we have to start on the premise that things are improving, things are going well, the mechanisms are working and we do need to make sure that we hang on to our fundamental principles. My fundamental principles, as it turns out, are very much similar to what Mr Dennis Tan has articulated, that we do this with the view to putting the commuter at the centre of the experience. We focus on reliability, on quality, on affordability. And we make sure that, over time, over the long term, we do this in a fair way.

Everybody needs to participate in it, and the help needs to be distributed to those who need it most. We do this in a sustainable way. We have to have long-term financial viability and competitive participation, and we do this in an effective way around reliability, comfort and to continually increase the participation of Singaporeans in public transport. Thank you very much, Mr Deputy Speaker.

*Question put, and agreed to.*

*Resolved, "That Parliament do now adjourn."*

Adjourned accordingly at 7.24 pm.