MPs question Transport Minister on LTA's new regulatory approach

SINGAPORE: Following Minister for Transport Lui Tuck Yew's statement that the Land Transport Authority's (LTA) regulatory approach would change, several MPs asked how this would be carried out without LTA facing a conflict of interest.

Mr Lui had said earlier that while LTA's regulatory approach in the past was outcome-based, going forward, the regulatory framework would be enhanced to be more prescriptive and to exercise greater oversight on areas that affect reliability and commuter comfort.

The minister was delivering a statement in Parliament on Tuesday in response to the Committee of Inquiry's (COI) report on the massive MRT breakdowns last December that affected 200,000 commuters.

MP for Pioneer SMC Cedric Foo asked: "Can I ask the minister, what gives him the confidence that LTA will correct its shortcomings?"

Nominated MP Eugene Tan noted that it was significant that LTA was deemed to have fallen short, and asked: "What sort of penalties will there be for LTA? And we have a classic question of 'who regulates the regulator'?"

Responding to the questions, Mr Lui said that it was the ultimate responsibility of the Ministry of Transport to ensure that LTA performs up to expectations.

"I guess that it's really a question of whether we should have a separate entity all together, to look at the regulatory aspects separate from what LTA is doing," he said.

"Within the LTA today, I think we've made as clear a separation between the design, the development arm, and the regulatory arm, even though it's housed under the same organisation."

"Part of it is because we think there's a great deal of value in making sure that (some of the) people who've had some experience in design, development, building of the system are able to transit into the regulatory arm and thereafter spend enough time before they move back to developing a new line or new network all together," Mr Lui added.

Some MPs wanted to know what will be done to ensure that SMRT focuses more on engineering and not on making profits.

MP for Aljunied GRC, Low Thia Khiang, commented: "I wonder whether the profit nature of the operator, which is more (oriented at) looking after the bottom line, has resulted in the consequence of lack of focus in maintenence?"

MP for Pioneer SMC, Cedric Foo, said: "The quest for financial viability, oblique profits by the public transport operators is incompatible with running a reliable system. I would like the minister to comment on that."

In his response to the questions, Mr Lui said the transport operators had to find a balance between being a commercial entity and being an engineering company that provides an essential public service.

"The COI, and I agree with them, felt that SMRT needed to pay more attention on the engineering aspects. Has there been an over-emphasis on the commercial aspects and should we strip it out from the operator all together? That probably is the gist of the question," he said.

Mr Lui said that competition would drive operators to improve. He said the licence for North-South and East-West lines end in 2028 and will be up for renewal. So competition will be another drive for SMRT to improve.

"When we have a profit motive in the equation, it actually engenders certain behaviour in the operators that requires them to be more efficient and to be more productive," he said. "So I think there is that pressure on them to be efficient and that is a helpful ingredient we'd like to see in our public transport network."

Mr Lui added: "I would say that I'm less interested in heads rolling and more interested in heads being fixed on and focused on the problems and the issues."

Another question MPs wanted to know was if commuters would eventually be made to bear the costs of implementation of the COI's recommendations.

Nominated MP Teo Siong Seng had asked: "If all the schemes and surveys were to be implemented, does the Ministry consider whether it will add on to the cost of the whole system, and eventually whether there will be a fare increase?"

Responding to the question, Mr Lui assured that this would not be the case.

"The fare formula as we've had in the past really is dependent on macro factors, on inflation, on wages minus the productivity dividend," he said. "It is not dependent on how much extra they spend on maintenance and so on, so I don't expect that that additional cost they spend... is going to be passed on to the commuters."

MPs also raised concerns about whether the SMRT board had members with the relevant experience to run a public transport company.

MP for Nee Soon GRC, Dr Lee Bee Wah, asked: "Will there be more people with engineering experience and background being brought into the board and top management?"

Non-Constituency MP Yee Jenn Jong also noted that the board and top management of SMRT comprises members who are trained mainly in accounting, finance, economics and law, with none originally having a transport or engineering background.

In response, Mr Lui said: "Since 2010, they've (SMRT) actually got somebody from the engineering side attending the board meetings... so that the board itself pays the appropriate amount of attention to engineering matters.

"I believe also that beyond the composition of the board, they do refer to expertise outside of the board that may be able to advise them on specific issues related to engineering or other aspects altogether."