[sustran] personal view on Singapore public transport governance (long)

[Paul Barter]

Just to follow up on the previous message about Kuala Lumpur's public
transport, I thought I would share an opinion piece which I drafted some
time ago - not published - about Singapore's public transport governance
choices.
Paul

Dr Paul A. Barter
LKY School of Public Policy, 
National University of Singapore
5 Arts Link, Singapore 117570 
Tel: +65-6874 3324;  Fax: +65-6778 1020
Email:  paulbarter at nus.edu.sg

Applications are now open (until 15 Jan. 2005) for the Masters in Public
Policy 2005/2006. 
See http://www.spp.nus.edu.sg/degree_prog_1.htm for details and
application form. 
---------------------------

24 September 2004
Dr Paul A. Barter

TITLE:    Don't forget integration in the public transport competition
debate

Competition is a hot topic as a result of the Competition Bill and the
recent media merger. Public transport is excluded from the Competition
Bill but is also in the spotlight with recent reports of comments by
ComfortDelGro Chairman, Mr Lim Jit Poh. Some have worried that more
competition would threaten the integration or 'seamlessness' of the
system. Are competition and integration incompatible or could we
increase both at the same time?


Why is integration important?

Before we talk about competition let us be clear why seamlessness is so
important. One way to look at it is to note that single public transport
route in isolation is obviously not very useful. A network of routes is
needed to reach a wider range of destinations. The problem is that
transfers are inevitably inconvenient. Integration basically means
trying very hard to make transfers as easy as possible. If successful,
we get a network that is much more valuable than the sum of its parts. 

So what, you may ask? Perhaps you take our relatively seamless system
for granted. But older folk will remember a much less attractive
experience here until the mid 1970s and users of public transport in
most other Southeast Asian countries will realise how difficult to use a
poorly integrated system can be. 

Excellent integration encompasses transfer facilities, routes,
timetables, payments, information and marketing. Good interchanges
minimise walking and clever timetabling minimises waiting. Passengers
should need just one guidebook, hotline or website, not several.
Integration ideally minimises costs for transfers and makes payment
hassle-free. The most highly integrated public transport systems are
planned and marketed as one system, so that the experience of using it
is as 'seamless' as possible, even where there are several operators
behind the scenes. 

Singapore's public transport scores perhaps a B or B+ on integration but
we probably need to aim even higher. This is because competition from
private vehicles seems set to heat up. There is a gradual move away from
controlling ownership, with high vehicle purchase costs, towards relying
mainly on usage costs, such as ERP, to keep congestion under control.
More people will own cars but using them will be expensive. Public
transport will face potential customers who also have other choices and
may have to start paying more attention to creatively marketing itself
to car owning households. 


Some competition options threaten integration

What do people mean when they call for more competition in Singapore's
public transport and what does it have to do with integration? There are
several options with different approaches to competition and different
implications for the seamlessness of the system.

Public transport everywhere is increasingly provided by private
operators. State-run monopolies often remain but are now widely seen as
an inefficient option. One advantage of public monopolies however is
that they do often allow integration to be achieved relatively simply.

Experience tells us to be wary of the other extreme, of total
deregulation with 'free-for-all' competition between buses on the road,
as has been tried in Britain outside of London. The resulting problems,
such as poor safety, congestion in lucrative routes, and lack of
comprehensive service, seem to outweigh the efficiency benefits.
Singapore experienced such conditions in the 1960s.This kind of
competition also eliminates any hope of a well-integrated system.
Individual operators may thrive but the system as a whole suffers. 

If we dismiss both state operation and competition on the road, this
leaves us with private monopolies, operating over groups of routes or
parts of the city. How can we prevent them from abusing their monopoly
power? One way is through regulation (of service standards and fares).
Singapore's Public Transport Council (PTC) does this quite well over the
two operators here, who have monopolies in their respective zones.
Having two operators gives a further incentive to perform, in that they
can be 'benchmarked' against each other. 

In this option, integration is also ensured through regulation and
through LTA's provision of infrastructure such as interchanges. However,
are there signs perhaps that even the status quo with its mild,
benchmarking form of competition may be hampering integration in
Singapore? What explains the relative inconvenience of transfers between
SBSTransit's NEL and the SMRT lines? Are the operators doing enough to
provide integrated travel information? Since 2002, additional private
operators have been permitted to apply to enter the market for feeder
routes. Has this resulted in any erosion of the seamlessness of the
system?

Another option is Mr Lim's suggestion to allow competition between mass
transit (MRT and LRT) and buses, as occurs in Hong Kong. Private
monopoly operators of bus and rail would be disciplined to a degree by
direct competition from the other mode in certain corridors served by
both. This would allow a lighter regulatory hand probably and might mean
that MRT fares could be deregulated. Unfortunately, it might also
seriously threaten the tight integration of the bus and MRT systems.
Enlightened self-interest is unlikely to prompt bus operators to
continue to feed customers into the clutches of their chief competitor. 


Could tendering allow more competition and better integration at the
same time?

Another option is 'competition for the market' with operators
periodically given concessions to operate parts of the system under
competitive tendering. Variations on this are increasingly common. This
could potentially obliterate integration too but fortunately good
integration is a feature of some models for competitively tendered
public transport. 

A number of European cities (such as Copenhagen and Stockholm) and
Australian cities (such as Adelaide and Perth) have been held up as
successes. Each has apparently retained or improved integration while
simultaneously introducing competitive tenders for private operation of
services. There are risks and pitfalls here too but it will be
interesting to watch these experiences. 

Unfortunately, using such an approach to increase both competition and
integration in Singapore would require a significant overhaul of the
regulatory framework. The authorities seem unlikely to contemplate
drastic reforms to a system that is not considered broken. Meanwhile
some of the other options appear to threaten integration more. Continual
improvements to public transport, including enhanced integration, will
be crucial if it is to be a viable alternative to its real competitor,
privately owned vehicles.

This suggests that a cautious approach to competition in public
transport would be wise. Improving the level of seamless integration
should be an important criterion for judging any reforms in this area.

Paul Barter researches urban transport policy at the Lee Kuan Yew School
of Public Policy, National University of Singapore. The views expressed
here are his own, not those of his employer.