Monday, January 26, 2009

Up and down

What's this I hear? The public transport companies are lowering fares? Well, if this is true, it is indeed good news. But before we get ahead of ourselves, let us wait and see. Not that I doubt it will be done. In Singapore, whenever something is announced (i.e. makes the news without official denial), it will be done. That's the good thing about Singapore. The authorities act like authorities.

And its time they did so too, whether there is a recession or not. This lowering of fares is not about charity or corporate social responsibility. Its economics, stupid. First, the price of oil has tumbled to as low as $40 a barrel. Actually, for us old-timers, $30/barrel was hitting the ceiling many years ago, but I don't want to push this. The age, it shows, you know. Previously they raised fare annually, whatever the price of oil, with the blessings of the PTC. The assumption was that their operational cost will always increase, come what may (read: salary increases, including bonuses). Mercifully, Singapore is too small an island for transport executives to fly in their own jets to meetings. But they don't take public transport either...

Next, commuters are increasingly packed like sardines in the train on their way to work and on their way home, everyday, for all 5 days of the week. Mercifully, the reduction of the work week from 6 to 5 was a godsend. On the other hand, this human congestion does bring us closer as a nation, but I suspect that many citizens would rather that it were in spirit rather than in the flesh. But having said that, I must say that generally, Singaporeans, and even foreigners, don't have problem with body odour. They don't perfume themselves too heavily either, so the packed ride is spared the smell you would normally get in a crowded soccer match. This one thing I can say about Singaporeans, they are a sensible lot, at least on a train or bus. Nevertheless, the public transport companies owe it to the commuters to make the congestion more bearable either by enlarging the trains, or baring this, reducing the fare so our pockets don't keep hurting.

Third, with the money that the public transport companies, i.e. SMRT and SBS Transit, are going to receive from the government in its latest 'giveaway' budget, it will be unconscionable for them to keep it, and worst if they were to give themselves any bonus out of it, like what the insensitive, and might I say greedy Chief Executives in the US are doing even as their ships are sinking. The public transport companies in Singapore have always turned a profit. Their cashflow is quite stable and their de facto monopoly business is probably the best business to be in in recessionary Singapore. They get more business during bad times compared to good times.

The question now is, how much of a reduction will there be?