How do you intend to raise public transport ridership?

We should conceive of our public transport system as a competitor to the car and not just to cater for those who cannot afford a car or do not have access to a car.

This is an important mindset change. We are saying: "I'm not forcing you into the public transport system, but I'd like to make the public transport system attractive enough for you so if you have a car...you ask yourself: Should I drive in or should I take public transport."

So that's why the tagline: "My other car is a bus or a train."

What do you think of the ownership model of public transport operators? Some have suggested having one company run the bus and rail systems, or have one run the bus system and the other run the rail system.

Our objective is we want an efficient and integrated public transport system that puts the commuter at the centre.

One proposal is why not now have a single multi-modal operator, that is, an operator running both bus and rail services.

Actually we have that in a particular geographical area. If you look at the North-East Line area, effectively you have a single multi-modal operator because you have the North-East Line and SBS Transit.

But the issue remains. People complain: Why do you have to rationalise bus services, why aren't there more feeder bus services?

So you always have to take an approach that not just looks at theory, but what happened in practice.

Those who advocate the single multi-modal operator say there is no direct competition under the current structure anyway...might as well just put them all into one.

But that is to misunderstand the nature of competition here.

We've got to go back and see why we did it in the first place. Look at the train system. You had one train operator, SMRT.

The problem then for the regulator is how do you ensure that the monopoly player does not abuse its market power by charging the commuters excessively.

The best solution for this often is to introduce direct competition. But in cases where there is a natural monopoly, because of the economies of scale argument, you can't have direct competition. It becomes wasteful.

A second best solution is to create what we call yardstick competition. If you say your cost has gone up 'X' and productivity is 'Y', I can check on the other player, and say why is it the other player is better than you.

The intent was never to introduce direct competition. To say because there is no direct competition, so band them together, is to misunderstand what was the rationale for doing what we did.

The proper argument would have been to say that the benefits of yardstick competition, when weighed against the benefits of economies of scale of having a single operator, are such that the economies of scale argument is more compelling.

So the upshot of all this is that we are doing a comprehensive review. We will take views, suggestions, proposals. We will weigh them carefully, look at the implications, but all the time be very clear in our minds what the objective is.

What is your response to calls to delist public transport operator ComfortDelGro and take it private, or turn it into a cooperative?

It is a mistake to assume that by taking away the profit motive, the cost of our public transport will fall and fares will be lower.

The weight of evidence from the experience of many countries that have gone down this road is that it is the opposite - costs are higher and eventually fares go higher.

If you take away the profit motive, you take away the incentive for the operator to be efficient, to keep costs low so as to maximise profits.

The form doesn't matter - whether it is a cooperative or whatever entity you want to form.

But presumably you want it to recover its operating cost and to have enough to replace its fleet. This is what you call a cost recovery model.

Experience has shown that in the cost recovery model, the players concerned have every incentive to inflate their cost, because when they inflate their cost, their revenues go up.

When London decided that in the London metropolitan area, they would allow profit-driven firms to compete, to tender, they found that the cost went down by 50 per cent.

In Jakarta, same regulatory framework, same regulated fare, different sort of players - profit-driven entities, state-owned players. What is the outcome? The profit-driven entities lower cost and they make profits. State-run entities, higher cost, and they make losses and the state has to help them.

I don't think this particular argument - that if we take away the profit motive you will have lower cost and fares will not be as high - is supported by the evidence and experience of other countries.



INSIGHT asked three people to quiz Mr Lim:

Comfort Taxi Operators' Association president Nah Tua Bah, 67

With the goods and services tax (GST) due to go up by 2 percentage points, this means increases in cost for cabbies, from fuel to taxi rental fees. Will the Government provide any help to them?

When I first came on board, the taxi operators raised fares. When I met up with the taxi associations, some felt that this would affect the earnings of the taxi drivers. Others said: Give it some time.

The Land Transport Authority collates the data, and every month I look at these numbers very carefully. From July to November last year, ridership went up about 6.2 per cent. Average net monthly earnings over that period went up about 23 per cent, to $1,900 a month.

GST impacts on everybody. The Government's approach is to help all Singaporeans with a significant offset package to address the additional expense caused by the GST. Taxi drivers will also benefit from this.

Bus and MRT commuter Vincent Tan, 25, a graduate student

Are there plans to shorten travel time so commuters can get from one place to another just as quickly, if not faster than if they drove a car?

We will try to narrow the gap between public and private transport in terms of travel time and reliability. We have extended the full day bus lane to more areas. We are trying to give more choice to commuters - the premium buses. They may call at fewer stops and you get a seat, so it's more comfortable.

When the Circle Line is up and running from 2012, connectivity between suburbs will improve significantly. Going from Bishan to Paya Lebar now takes about 30 minutes. With the Circle Line, it will be about 17 minutes. We are also expanding our rail network.

Motorist Doreen Ong, 37, an account manager

The Government makes motorists pay through certificate of entitlement (COE), raising Electronic Road Pricing (ERP) rates and more gantries, but roads are more crowded than ever. What is the Government doing about this?

There is no basis for this sweeping claim. If we didn't put in ERP congestion pricing, our expressways and Central Business District would have jammed up.

The average speed for a vehicle going to the CBD is 25kmh, one of the fastest in the world for moving to the city centre.

You need to monitor the arterial roads for their speed. So far they are still within 20 to 30kmh. If it gets worse, you need to decide whether to put in congestion pricing there too.

The other argument here is: Why not build more roads, more expressways?

We are doing that. But that is not a sustainable solution.

Every time you build new capacity, there is latent demand - additional users who come up.

Trying to solve congestion by building roads is like telling a person who is suffering obesity that the solution to his problem is to loosen his belt!

What you need is a holistic approach. You need to have a good road network, a good public transport system, travel demand management, proper land use and integrated transport plans.