June 26, 2017

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by Lee Chin Wee 

BUCKLE in, because public transport fares are likely to rise. Transport Minister Khaw Boon Wan hinted as much during his Ministry’s Committee of Supply debates last week (Mar 8). Addressing Parliament, he said that the Public Transport Council (PTC) was reviewing the current fare formula, which is due to expire later this year.

In December last year, the PTC had revised fares downward due to lower energy prices. However, Mr Khaw noted that “the PTC cannot always bring good news, sometimes they have to adjust fares upwards. And when they do, I hope commuters will be understanding.”

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Many Singaporeans, especially those in lower income brackets, will soon be feeling the pinch. A month ago, Finance Minister Heng Swee Keat announced a 30 per cent hike in water prices – the first time water prices have risen in 17 years. It also comes on the heels of increased Service & Conservancy charges in 15 PAP-managed town councils, and higher parking charges at public car parks across the island.

Of course, every fee increase must be evaluated based on its own merits. It is not enough to say that the cost of living has gone up – in the case of public transport fares, any increase should be measured against real wage growth in Singapore and the trend pattern of public transport operating costs.

 

Is it expensive to keep trains and buses running?

To obtain a better understanding of public transport operating costs, we studied SMRT’s annual reports from FY2011 – 2016 as a case study.  Of particular interest were the rail/light rail and bus businesses. We isolated the annual figures for operating revenue and operating profit in these areas.

 

 

Operating profit for core public transport services is not high; in fact, it is a negligible portion of SMRT’s overall profit. In 2016, SMRT recorded an operating profit of $138.5 million. Out of this sum, only $13.3 million was from the rail/light rail and bus businesses – barely 9.6 per cent of total profits. The other 90.4 per cent can be attributed to SMRT’s other business interests, such as advertising and property rental. For instance, SMRT owns Kallang Wave Mall.

Not only is operating profit already low, it is decreasing due to operating costs rising at a marginally faster rate than operating revenue. Why might this be the case? Because in recent years, SMRT has been investing in renewal works for key infrastructure, and the acquisition of operating assets. For instance, from August 2013 to December 2016, 188,000 timber sleepers were replaced with more durable concrete sleepers. To prevent further power faults, SMRT is also replacing the third rail system which supplies electricity to trains. The cost of financing these projects is not directly passed on to the consumer, as fare prices are set by the PTC.

 

Can Singaporeans afford a fare hike?

When fares rise, consumers end up shouldering more of the operating costs. The key question is, can Singaporeans afford it? In comparison to other countries, our public transport fares are very affordable. A 2016 study by UniSIM showed that, for a 10km train ride, Singapore’s train fare was the sixth lowest out of 35 major world cities. It costs a commuter SGD$1.33 to travel 10km on train, whereas the global average (after Purchasing Power Parity adjustment) is around SGD$2.30.

Tracking real wage growth against changes in public transport fares, it also appears that public transport fares are reasonable. Since 2011, real wage growth has broadly kept pace or surpassed increases in fares. This, however, does not account for the period of 2012 – 2013, where fare changes were temporarily suspended as the PTC reviewed its pricing structure.

 

 

Should public transport fares be going up?

Someone’s got to pay for the cost of running our trains and buses. When SMRT was still a publicly listed company, there were three parties who could do this: (1) the consumer of public transport, who pays through fares; (2) the G, who pays through taxpayer monies; and (3) the retail investor, who buys SMRT stock. Since SMRT was acquired by Temasek Holdings, we are now left with options (1) and (2).

Clearly, consumers of public transport are also taxpayers. But not all taxpayers are consumers of public transport. Hence, when the G subsidises operating costs, people who are under-consuming public transport will be cross-subsidising those who use public transport frequently. Some view this as good, because those who under-consume public transport tend to be rich anyway, and their taxpayer dollars should be used to make sure others can have cheap MRT rides. Others view this as bad, because people should contribute based on how much of a service they consume.

Another point of view is that SMRT and other transport operators should use their profits from more profitable business sectors to cross-subsidise rail and bus services. The argument here is that instead of raising fares, transport operators should be willing to take losses on its core business (that is effectively a public service) in exchange for making large profits on advertising, overseas consulting, and retail business. However, there is a limitation to this model – transport operators only have secondary interests in these other business areas, and cannot sustain such an internal cross-subsidy if operating costs continue to mount.

Regardless of what one believes, everyone would agree that high operating costs for public transport are unavoidable if we want to ensure our trains and buses become more reliable and less fault-prone. And even if public transport fares were held steady, taxpayers would still feel the pinch – either directly in the form of higher taxes, or indirectly as money that would otherwise have gone to other G services is now used to subsidise public transport.

Come this April, though, when the PTC convenes to announce changes to fares, I’ll still be hoping that my daily MRT rides get cheaper. One can dream, right?

 

Featured image by Sean Chong.

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Morning Call, 0830, clock

IT’S not a lot, but an extra couple of bucks can’t hurt in this economy. If you take public transport regularly, expect your fares to go down by 4.2 per cent – or from one cent to 27 cents per ride – from December 30.

And if your daily commute is on fully-underground trains, you could pay even less. MRT fares will be brought down by up to 25 cents to match above-ground lines, which cost less to operate.

The fare reductions are part of the latest review by the Public Transport Council (PTC), driven mostly by falling energy prices, said PTC chairman Richard Magnus yesterday (Oct 27).

By the end of next year, commuters can expect another round of reductions of 1.5 per cent. This is part of the overall 5.7 per cent reduction planned by the PTC.

The way your train fares will be calculated will also be tweaked. Instead of being based on the fastest route (by time), it will now be based on the shortest route (by distance). Bus fares have been based on distance since 2010.

Will fares go down even further, now that SMRT’s rail assets have been taken over by the G?

It’s a question worth looking at, said economist Walter Theseira of SIM University – with the G making massive capital injections to the public transport system in recent years, he said.

“Historically, we have been holding to the principle that commuters cover the operating cost. But it’s quite obvious the G is moving away from this model to one of subsidising more of these costs,” he told The Straits Times (ST).

Saving an extra couple of dollars each month from your daily commute is better than nothing – especially if you’re one of the 4,100 people laid off in the third quarter of this year.

Releasing new figures in its advance labour report, the Ministry of Manpower reported a decline in overall employment – by 3,300 between July and September. This is the second time since the 2009 financial crisis that employment has contracted. The first was in the first quarter of last year, when employment fell by 6,100.

The loss of jobs in the third quarter came mostly in the construction and manufacturing sectors. The overall unemployment rate was 2.1 per cent.

Have we hit the bottom yet?

DBS economist Irvin Seah said it was possible, if the situation remained stable over the next six to nine months. “We may have reached bottom,” he told ST.

Not many shared his optimism, however.

“With external headwinds and sluggish domestic business conditions, hiring intentions will have to be adjusted downwards,” said OCBC economist Selena Ling, adding that the unemployment rate could rise in the fourth quarter and next year.

 

Featured image from TMG file.

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Black clock showing 8.30.

WE’RE afraid the news isn’t very good for job seekers because there are more of you than new jobs created. And the economy is in a funk. (Okay, let us clarify this: Singapore could be headed for a “technical recession” but not an “outright” one). In any case, you’d best think about how to up your own value as a job seeker. You might try looking at the National Jobs Bank which has 60,000 active job listings. Employers put in some 7,000 new jobs every day. Manpower Minister Lim Swee Say wants to make this a “one-stop, non-stop” online portal. Is this just another of his folksy sayings? We don’t know what non-stop means since the Internet is 24/7 anyway but it seems that there will be some career paths put in for so that even the employed can figure out their chances of getting laid off. Oops! We mean they can look at how they can stay employed.

It’s a crazy picture really. The number of people entering the job market has come down. That’s because many people are retiring and you know how it’s been with Singaporeans who don’t seem to want more children to add to the manpower base. And even though the number of new jobs created have come down too, to a miserable 500 over 18 months, there doesn’t seem to be much unemployment. Even Mr Lim is flummoxed at this. He said it was worrying but didn’t quite explain why. Possibly, it’s because we need more workers to run the economy.

The foreign worker tap? But that’s been slowed down to 24,000 a year already. He can’t possibly loosen the tap when there’s retrenchment going on at the same time, right? In fact, MP Foo Mee Har asked if foreign workers on employment passes should be retrenched first in any job cutting exercise, just like Singaporeans should get a shot at a job first before the call goes out to foreigners. Mr Lim is hesitant about this, saying he didn’t want to send the wrong signal. We don’t know who the signal is meant for. Foreign employers?

The economy and labour market situation was the big thing when Parliament sat yesterday. The Bill to change the Constitution on the elected presidency was introduced yesterday. The new thing is that criteria for president will be re-looked every 12 years. And the G is proposing that the number of non-Constituency MPs be increased from the current nine to 12 – with full voting rights. We wonder how elected MPs will react to that.

 

TMG has written several pieces on the proposed changes. Take your time to read them here:

EP changes: Can we not have reserve elections next year?

EP changes: When to stop clipping the President’s wings

Proposed changes to the EP: All you need to know

 

Something of bigger concern to you: transport fares. The Public Transport Council (PTC) wants to see if bus and MRT fares can be “standardised” based on distance travelled and regardless of mode of travel/route or whether you are in air-con comfort or not. We suppose we’d all prefer a simple fare structure but at the end of the day, it’s about the final charges. Going by the PTC’s calculations, the next round should be cuts of up to 5.7 per cent because of reduced energy prices.

If you think that the PTC will go the whole hog… Hahaha.

PTC chairman Richard Magnus noted that the public transport system is under-going some critical changes, including moving buses to the bus contracting model and the new rail financing framework for SMRT. He said: “Energy prices remain volatile. While the fare reduction quantum reflects the sharp fall in energy prices over the last year, it may rebound sharply in the following years.”

He said this in a blog post, which is becoming an increasing popular platform for newsmakers to float trial balloons or even make policy announcements.

Not of concern to you personally, but definitely an interesting development. Remember the case of the transgender who is a woman but behaves like a man who was acquitted of raping a minor? Her acquittal has been overturned and she will serve 10 years in jail. We wrote about the acquittal here.

 

Featured image from TMG file.

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by Ryan Ong

TEMASEK Holdings is set to fully acquire SMRT, if only the shareholders can agree to a price of $1.68 per share. This would make the total buyout price of SMRT $1.18 billion. It would also take SMRT off the stock market, and beholden to Temasek instead of its crowd of current shareholders. But what does it mean for the staff and customers, and why do these acquisitions occur anyway?

What is an acquisition?

An acquisition occurs when a company buys a controlling stake in another (or the entirety of another company). In this sense, SMRT can be said to have been acquired by Temasek Holdings already (at present Temasek owns 54 per cent of it). An acquisition can happen in one of two ways:

Friendly acquisition

With friendly acquisitions – as is the case with SMRT – the company being acquired works with the buyer to ensure a smooth transition. This doesn’t just mean helping to facilitate the sale of their shares; it also extends to planning the handover with regard to staff and customers.

For example, SMRT has told the National Transport Workers’ Union that no SMRT staff will lose their job, as a result of the buyover. We also know that SMRT will not scrap the train service; part of the reason Temasek is buying it (see below) is to allow it to improve on that.

The company that’s doing the buying, however, still has to convince the existing shareholders to part with their shares for an agreeable sum. This is usually at a slight premium to the market price.

Hostile takeover

This happens when a company does not want to be acquired. In these situations, the buying company has to find a way to convince existing shareholders to sell it a controlling stake. This is invariably an expensive prospect, since the shareholders are being bribed into handing over the reins.

One of the biggest recent examples of a hostile takeover was in 2014, when Icahn Enterprises attempted to acquire Clorox (yes, that Clorox you use to mop your floors). Shareholders were offered a premium of more than 20 per cent on their stocks, and the total bid for Clorox came to more than $14.4 billion (Icahn still failed to acquire the company).

A hostile takeover may also involve a Leveraged Buy Out (LBO). This is when the buying company intends to sell off the assets of the acquired company in order to pay for the buyout.

For example, a company might want to buy over its competitor, but lack the resources. It then discovers that its competitor has assets valued at $2.5 billion, with few or no loans. The company could borrow an extra $1.5 billion from the bank for its takeover bid, and then sell off its competitor’s assets to pay the loan after the acquisition is made.

Cue Hollywood drama, because that usually means everyone in the acquired company is going to lose their jobs (it is being bought simply to shut it down).

Why do companies want to acquire other companies?

The main reasons are:

  • Business synergies
  • Diversification
  • Eliminating costs
  • Eliminating competition
  • Buying emerging talent

1. Business synergies

This is when two companies have complementary goals, or ways to compensate for each other’s weaknesses. For example, a property developer may be really good at building condos, but suck at selling them. The developer might then purchase a property-related magazine, and use the acquired media (along with it staff, who are more skilled at marketing) to sell their condos.

2. Diversification 

As a business grows bigger, it becomes dangerous to rely on a single product or service. It would, for example, be dangerous for Temasek Holdings to put all its money solely into banks, or solely into shipping. If it did that, a decline in the chosen industry could lead to collapse, and billions in shareholder losses (and a lot of lost jobs).

For the same reason, you often find big companies that own businesses unrelated to theirs. Most people don’t realise that Kraft, for example, has been owned by Phillip Morris (a cigarette company) for a long time.

This is why there are specialised ethical investing funds, for people want to ensure their money doesn’t go into industries like tobacco, firearms, sex, etc. It can be confusing which companies have acquired which in the corporate world.

3. Eliminating costs

A business may acquire a supplier or distributor, in order to lower costs. For example, an electronics company may be paying a lot of money to a manufacturer, to produce its designs. It might decide to save money in the long term, by just buying over the manufacturer.

This can also work “downward”. For example, a clothing manufacturer may buy over the distributor that sells its label.

4. Eliminating competition

This is where hostile takeovers tend to happen. A business may be buying over another company simply to eliminate a rival. Most governments are wary of this, because it is a practice that can result in monopolisation (when a company has enough money to buy and remove all competitors).

The Competition Commission of Singapore (CCS) looks for the following traits when deciding whether an acquisition is anti-competitive:

– The merged entity has/will have a market share of 40 per cent  or more; or
– The merged entity has/will have a market share of between 20 and 40 per cent and the post-merger combined market share of the three largest firms is 70% or more

Section 54 of the Competition Act prevents acquisitions that would be anti-competitive.

Hostile takeovers may also draw the attention of the National Trades Union Congress (NTUC), if it would result in mass unemployment (this can happen if a company buys over a competitor, only to sell all the acquired competitor’s assets to pay for the buyout).

5. Buying emerging talent

This is a variation of point 4. When Facebook bought Whatsapp for around $29.6 billion, it wasn’t because they wanted to buy Whatsapp’s customers and business. In fact, Whatsapp only generated over $13.4 million in sales just after Facebook bought them. Does that mean it was a bad idea?

Facebook probably isn’t crying. Consider that, if Whatsapp had expanded further, it could have one day become a social media site that would rival Facebook. The cost to Facebook then would have been even higher.

Also, a large corporate player sometimes spots an obscure company with great talent and a marketable product, that is not fulfilling its potential. This may prompt them to buy the company quickly, and absorb its potential.

How will the acquisition affect customers?

Acquisitions happen all the time, and usually customers don’t notice. With regard to SMRT, there may even be a positive effect – because Temasek takes them off the stock exchange, SMRT will no longer have to worry about shareholders’ demands and their dividends.

It doesn’t need to worry about making short term profits to please shareholders, and can focus on running its services better.

Acquisition by Temasek is something of a compromise: it’s not quite nationalisation, but it brings SMRT closer to being a nationalised entity. The end result on customers though, is likely to be unnoticeable.

 

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by Kathleen Bei

TEMASEK Holdings buyout of SMRT may be stopped in its tracks by some of its own shareholders.

The obstruction? The price per share offered is too low, the shareholders say, even as an independent financial adviser (IFA) said the $1.68 per share offer was “fair”.

In July, Temasek made clear its intention to privatise the public transport company when it offered to buy the 46 per cent of SMRT that it does not already own. The offer of $1.18 billion was made by Temasek’s unit Belford Investments.

Yesterday (Sept 6), IFA Rothschild found share offer “fair and reasonable from a financial standpoint” and recommended that shareholders either vote in favour or sell their shares in the open market.

According to the Business Times, Rothschild also noted the scheme price “was a premium of about 8.7 per cent to the closing price of S$1.55 on the last trading day before the announcement of the scheme (yesterday)”.

In an announcement on Singapore Exchange’s website on Tuesday (Sept 6), the scheme of arrangement at $1.68 per share will be put to a vote on September 29 after the conclusion of the new rail financing framework (NRFF) EGM. You can read the document here.

But for the privatisation and delisting of SMRT to occur – over 50 per cent of shareholders present must vote to approve the scheme, and they must hold at least 75 percent of the value of SMRT shares among those present at the meeting.

Though SMRT’s independent directors (ID) agreed with the findings of the IFA and “unanimously” recommend shareholders to vote in favour of the buyout, some minority shareholders are set to vote against the scheme citing the lowball offer and issues with the NRFF. 

One SMRT shareholder who would only like to be known as Ms Tan told TODAY: “I’m going so that I can vote no. I hope the other shareholders vote no too. I believe we should be getting more than $1.68 per share, and, we should not be getting any less than what we deserve.”

Another shareholder, Mr Mano Sabnani, who plans to vote against the scheme feels that the NRFF is not fairly worked out. Mr Mano also told TODAY: “Temasek conveniently stepped in with an offer to buy out minority shareholders immediately after management secured a poor deal from LTA.”

The SMRT IDs said that if the scheme does not become effective, “there is no assurance that the trading volumes and market prices of the scheme shares will be maintained at the current levels prevailing”.

But if the scheme does become effective, it will be “binding on all scheme shareholders”, whether present or not at the scheme meeting. Though as of now, there is “no certainty that the scheme will become effective and binding”.

As of this morning (Sept 7) at 9.18am, SMRT shares were at $1.66 a piece.

 

Featured image C151A by Wikimedia Commons User Willis Chong (CC 3.0 Unported).

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Photo of clock face with hands pointed to half past eight.

GOOD morning. Here are today’s headlines:

The G has lowered its expectations on how the economy will fare this year, estimating a 1 to 2 per cent growth compared to 1 to 3 per cent in its previous forecast.

The figures are based on rising uncertainties related to Brexit and the general lacklustre global economic outlook, said the Ministry of Trade and Industry. Investors seemed not to be too surprised; the Straits Times Index fell by just 0.2 per cent.

Things are looking up, however, for SBS Transit and SMRT Buses after securing a multi-billion deal with the G to run 11 bus route packages under a new contracting model where the G owns all operating assets and collects fare revenue.

The 11 packages worth $7.2 billion are of varying tenures, and follows the successful tenders of two new bus operators, Australia’s Tower Transit ($556 million for five years), and Britain’s Go-Ahead ($500 million, also for five years) in the past year.

Transport experts interviewed by The Straits Times (ST) said commuters can expect better service under the new model, including higher service frequency and better timings.

Speaking of better timings, congratulations to Joseph Schooling for coming in first in the heats early this morning to qualify for the 100m men’s butterfly semi-finals.

Clocking in at 51.41 seconds, Schooling beat Olympic favourite Michael Phelps, who came in fourth at 51.60 seconds. Fellow swimmer Quah Zheng Wen also made it to the semi-finals, clocking a timing of 52.08 seconds.

The semis will be held this morning in about two hours, around 10.30am.

If you’re looking for some drama now, turn to ST’s Forum pages, where the doctor reported as charging a consultation fee twice for two ailments has responded in a letter to the newspaper.

Referring to the ST report, which has also been rebutted by the Health Ministry (See our report here), Dr Wee Chee Chau said consultation fees are usually higher for more ailments because the consultations take longer.

In other words, it is still “a single charge, in one billing, for a long consultation that involved two entirely different conditions”.

He added: “It seems that miscommunication between the patient and the clinic assistant, and/or the reporter has give rise to the impression of a separate billing for two ailments, which was definitely not the case.”

The newspaper’s editor replied to Dr Wee’s letter, saying when the reporter asked him if he charged multiple consultation fees if a patient had more than one problem, he had said yes.

 

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by Daniel Yap

SO THERE may be a buyout of SMRT within the week. Or is it a bailout? Whatever it is, it will pretty much amount to nationalisation. Temasek Holdings, one of the G’s investment arms, is close to making an offer to buy out Singapore’s largest rail operator less than a week after the Land Transport Authority (LTA) announced that it will be buying over rail assets to the tune of S$1 billion.

SMRT is valued at S$2.4 billion and is already 54 per cent owned by Temasek. Trading of SMRT shares was halted at noon on Friday, just before the announcement of the LTA rail asset buyout. That announcement saw SBS Transit shares gain three per cent.

Rails, check. Trains, check. The whole company, check. Only SBS Transit will remain as a significant private player in Singapore rail-estate if the deal goes through. But this is what many have been calling for since breakdowns and crowding became a pain in 2011. Questions have been asked in Parliament on whether Public Transport Councils (PTC) would or could be nationalised.

Of course, the announcement came as a surprise, but not as a shock. The G has been more and more proactive (or interfering more, depending on your philosophy) when it comes to managing public transport on the island. The plan for the rail asset transfer to the state was passed in 2010. Since then, it has paid billions to own not just rail assets, but also buses. The model was clear then – the G owns the stuff, and someone else operates it.

But what happens when the G buys the operator? Doesn’t this amount to de-facto state ownership? There is no doubt. Being wholly owned by Temasek is essentially being owned by the G, since the sole shareholder of Temasek is the Minister of Finance. Temasek itself has had a rough year on the books. A S$24 billion gyration, if you will.

But no problem, still plenty of money to buy a company like SMRT. But will it help make the trains run like clockwork?

 

Featured Image SMRT by Flickr user Denis De Mesmaeker (CC BY-NC-ND 2.0)

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HAVE you seen the green machines? Tower Transit’s bright green buses hit the road yesterday, serving nine bus routes out of Bukit Batok interchange with 17 more to come next month. Plus, it wants to participate in an upcoming tender to run even more bus routes. The launch of services 77, 106, 173, 177, 189, 941, 945, 947, and 990 mark the operational start of the G’s new contracting model for bus operators.

Tower Transit has been praised for its ability to attract local drivers with attractive pay packages, forcing incumbents SBS Transit and SMRT to raise their bus driver salaries to keep up. Last month, Tower Transit again announced a pay increment for its drivers even before it had begun operations. The company has been making training its drivers a priority. How was the driving experience for commuters? Generally good, according to press interviews, but it will be the telematics systems (to measure smoothness and comfort of the ride) installed on Tower Transit buses that will be giving the most feedback.

From bright green to light blue – Workers’ Party secretary-general Low Thia Khiang fended off a challenge by Mr Chen Show Mao at the party’s Central Executive Committee (CEC) elections, held every two years. This is the first time Mr Low has had to defend the post he filled in 2001, and he won 61 votes to Mr Chen’s 45.

What’s notable is a consolidation of Mr Low’s influence after the vote, which saw Mr L. Somasundaram and Mr John Yam failing to retain their seats in the CEC. The duo had backed Mr Chen’s bid for the position of secretary-general. Mr Chen, however, performed well to retain his CEC seat, garnering the second-most votes among candidates after Mr Pritam Singh. There were 28 new cadres voting this year, bringing the total number of cadres to 130.

The two are colleagues in Aljunied GRC and were all smiles after the elections, and emphasised mutual respect and that the election was part of the democratic process of letting the party cadres decide how the party should move and who should lead it. Both denied that there was any rift between them. If both candidates can keep their relationship friendly in spite of the election challenge, then it will be a good sign that WP is effectively representing the will of its members, and not falling into groupthink or undemocratic control.

 

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Reliability (WOTD)
Illustration by Sean Chong

by Tan Chu Chze

TRAIN breakdowns break our trust in the system. The Ministry of Transport knows this, and is on the move. Yesterday’s (April 12) parliamentary debates saw progress in addressing the problem of trains breaking down too much… or in G-speak, ‘rail reliability’.

That said, ‘reliability’ is actually not a very straightforward idea. Worse still it is not something easily achieved. Sure, we are familiar with the word and use it often. But, it actually brings together a whole lot of different ideas.

In fact, that is the original concept of ‘reliability’. In its early use, the root ‘rely’ meant ‘to gather or assemble’. ‘Reliability’ is thus the product of assembling parts and things together. What things exactly? Let’s break it down.

The dictionary defines ‘reliability’ as being “consistently good in quality or performance; able to be trusted”. Here we can already see two ideas being fixed together: consistent performance, and trustworthiness. We think of these two notions as somewhat the same – if not flip sides of one idea – when really they are not.

Consistent performance is easily measurable. Following this we can derive a specific definition for ‘reliability’: that is, having stable and consistent results. Or in other words, a predictable outcome. If for the past 20 years your train to work arrives at your station at exactly 7am every morning, then your train system is reliable. It consistently produces the same result all the time.

The same applies for a train system that always fails. If you have never experienced your train arriving to your station on time, then your train system is (technically speaking) still reliable. It also consistently produces the same result – just that this result may not be the one you want.

This is where the other part of ‘reliability’s meaning comes to play. For a more complete sense of ‘reliability’, there must be some feeling of trust in relation to the predictable results.

This aspect, though, is not so easy to measure. How do you quantify a person’s confidence in a result or outcome? How do you capture an entire society’s faith in something like a train system’s performance? Or what happens when your train has an occasional but major breakdown?

Herein lies the difficulty with phrases like ‘rail reliability’: it is a term easily mistaken for measuring one aspect of ‘reliability’ when it was designed for the other. Take a close look at how it is defined by the Land Transport Authority (LTA):

‘Rail reliability’ is measured by “the average distance travelled by trains during the time between rail delays” – excluding delays less than five minutes long and delays caused by “external factors”.

Yeah it’s a bit dense right? Basically ‘rail reliability’ is a measure of how far trains travel before having a significant delay. According to the current statistics, we can expect about one delay every 133,000km travelled by all the trains in the system. Another way of looking at it is that you can commute on all the MRT lines end-to-end about 870 times before you will experience one longer-than-five-minutes-non-externally-caused delay.

The Straits Times was on the mark in noting that these measurements do not translate to a sense of trust among commuters. Despite the improvements in rail reliability numbers, there seems to be a regression in rail reliability feelings

And how do these sentiments fare vis-a-vis further improvements toward rail reliability? And only the measurable kind? Transport Minister Khaw Boon Wan just announced yesterday a new target average of 200,000km before a delay, plans for of new technologies to be implemented, and even a Rail Academy to train engineers. Clearly, the ministry is doing its part to improve rail reliability. And you can trust that these promises will be kept especially by a minister who has proven himself reliable.

The question is: will all this effort calm the beast of a disgruntled patronage? Will we be able to rely on these measures to put together the bits and pieces of ‘rail reliability’?

Perhaps the “good and consistent” results we are looking for will take more patience than we have right now. Besides, the Ministry’s current measures can only be proven later in the journey. The best we can do is trust that they point in the right direction.

 

Featured image by Sean Chong.

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NOT happy with your maid agency? By December next year, start checking the agencies for a new grading system called Trustmark by the Consumers Association of Singapore and the Manpower Ministry. Few details were given on how the agencies will be graded but may include how well they treat their maids, and how honest they are to prospective employers. Employers can rate the agencies they use by June this year.

Maids are important members of many Singapore households – especially with more married couples working. The latest General Household Survey, which checks the Republic’s household demographic data every five years, released yesterday showed 53.8 per cent of married couples both working, up from 47.1 per cent in 2010. Other key findings from this morning’s headlines:

From ST:
More leave cars at home to take trains, buses to work
English most common home language, bilingualism also up

From TODAY:
More in S’pore are better educated, own homes
Greater number of S’poreans not identifying with any religion
Use of public transport is up, but so is traveling time

From Lianhe Zaobao:
– Significant rise in proportion of young singles

If you’re going away for a vacation for the upcoming Good Friday weekend, you’ll be able to check-in at Changi Airport from 12 or 24 hours before the plane takes off. The airport has opened common early check-in counters at all three terminals, with a lounge at Terminal 1. The counters and lounge are open from 6am to midnight daily.

Speaking of early birds, Dr Tan Cheng Bock who lost the 2011 presidential election by a hair said yesterday that he would announce tomorrow if you will stand for the election again. He lost to current president Tony Tan by 7,382 votes in a four-way fight that included Mr Tan Kin Lian and Mr Tan Jee Say. No word yet on when the next presidential election will be held, but it has to be by August next year.

 

Featured image by The Middle Ground.

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