Friday, July 15, 2016

Nationalisation of SMRT assets - To Prevent Another Minister of Transport and SMRT CEO being Sacked

The Singapore Land Transport Authority (LTA) today (July 15) announced that it will pay S$1.06 billion to nationalise the assets of SMRT. Temasek Holdings, who own 55% of SMRT, will be the greatest beneficiary of this sale – which is seen as an alleviation to the embarrassing S$24 billion losses reported last week.

To avoid even more embarrassment when more breakdowns come along forcing the CEO of SMRT and even the Minister of Transport himself to ask for a job change, again (remember Lui Tuck Yew?), the PAP Head have decided enough is enough. Let the whole government share the blame.

The S$1 billion deal is considered finalised even though it is to be pending approval from shareholders of SMRT on the 1st of Oct, because the country’s sovereign wealth fund company is the single major shareholder. The CEO of Temasek Holdings is the wife of Prime Minister Lee Hsien Loong.

Physical assets like trains and signalling system will be nationalised but SMRT will however continue to operate the assets on a 15-year license-basis. SMRT will also be forced to increase its maintenance staff strength by 20% to about 700 employees over the next three years, as the company has been under-cutting maintenance budget resulting in a series of train breakdowns. Although the LTA said that the 15-year license will be open for bidding, there is no open tender this time and SMRT will be the default train operator awarded.

In 2000, SMRT was privatised and now 16 years later, it is nationalised due to greed-driven business principles and a lax transport authority. Many Singaporeans believe the dilapidated state of public transport will remain the same as before because the Transport Ministry and SMRT are still equally forgiving of train breakdowns and mistakes.

What do you expect from a Minister of Transport who was also a Minister of National Development (housing), and prior to that, Minister of Health? Yes, you guessed it. He will probably get his doctor friend to diagnose a train breakdown, and a housing contractor friend to handle the repairing.

The Singapore ruling party government decided the S$1 billion SMRT purchase without consulting Parliament. This is not surprising given that nearly 90% of the seats in Parliament belongs to the ruling party. Like the old saying, absolute power, corrupt absolutely. Voters take note, though you will forget when the PAP starts giving out NDP goodies soon.

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