Wednesday, September 23, 2015

Fine who?

It is reported that the SMRT will be fined S$5.4M as penalty for the massive train breakdown on 7 July 2015. The breakdown, simultaneously, of both the East-West and North-South lines affected more than 400,000 commuters on their way home after a long day at the office. According to investigations, the breakdown could have been prevented but because of the lapse in maintenance by SMRT. In fact, according to the Land Transport Authority (LTA), the problem that eventually caused the breakdown was known two months beforehand, but SMRT did not think it was serious enough to give it its utmost attention. I suppose the LTA thought this was gross negligence of the highest order and thus imposed the huge fine.

Frankly, many commuters, myself included, wonder if they ultimately have to foot the S$5.4M bill when SMRT raises fare citing "rising costs", etc, etc. I don't think anyone is applauding this news. Fines have been imposed in the past but these did not lead to significant improvements in maintenance nor reduce instances of major breakdowns. The LTA thinks that it must now impose a penalty that will cause the maximum pain. But pain for who? The way I see it, the person in-charge of the SMRT, the CEO no less, should step up and resign. I have written previously that Mr Lui Tuck Yew shouldn't have resigned, but he did. He is an honorable man worthy of everyone's respect. The head honcho of SMRT today is still sitting behind the CEO's desk. For him, and his senior management team, it will merely be an exercise in factoring in the $5.4M into the budget for next year, and reporting a slightly less profitable year, but still probably a profitable year.

Will the S$5.4M lesson be learnt? I doubt so unless there is a change at the top. Mr Kuek famously said that he still had work to do to right the wrong, but it has been almost 3 years to the date when he assumed the position of CEO. What has he been doing all these three years that he still needs more time? How long? Another three years, or until all the trains breakdown simultaneously? Like Mr Lui (though unnecessarily), he should step up to step down. Nobody is demanding that he perform hara-kiri, though that's really up to him.

If there is no change, only time will prove that this latest exercise in moving numbers on the balance sheet will have little bearing on the integrity, or lack of it, of the operations of the SMRT system. Frankly, truly, really, I have greater trust in the bus system today. And we should thank Mr Lui for this.

1 Comment:

Anonymous said...

What are the options available for SMRT to recoup the fines it has incurred?

Would it reduce its cost (in operation, maintenance, salary in general) to maintain the same profit level as expected from its shareholders? Would it lobby to increase its fare, citing higher cost, in order to maintain the same profit level? Would it not recoup it and let its profits slide or even go into the red? If this happens, what actions would its shareholders and board going to do with its senior management? Who are the top shareholders of SMRT? Who make up its board?

Who is representing the interests of its customers, people who takes the trains daily?