Monday, 19 December 2011

SMRT - A Public Transporter that Went Terribly Wrong with its Business Model

My recent involvement in the commissioning of the new air-conditioned Clementi Bus Interchange brought me out of the construction industry and closer to the Singapore transportation industry.

The first day Transport Minister Lui Tuck Yew took over his portfolio after the May General Election, I witnessed him personally standing at the Jurong East MRT Station platform to appreciate the morning crowded condition at Jurong East MRT Station "first-hand". I was greatly impressed by him. That was before the new platform was opened.

It must have been a sigh of relief for him after the opening ! ... Hmmm ... what is left to be done is probably to add more new trains, and perhaps things will be back to "normal" till the next GE in 2015. Meanwhile, SMRT would probably continue with its incremental annual fare hikes despite public protest about SMRT's profits.

I would have thought so personally too. Personally, I have been involved in the new Clementi Bus Interchange commissioning recently. The old Clementi Bus Interchange used to be my "transit" point between SBS Bus 173 and the feeder service No 96 to NUS during my undergraduate days. I recall most weekends before the Final Exam in 1987, we would study on campus and visit the Clementi Hawker Centre for some nice food to "spur" us on. It was great for me to help see to the  upgrading of this nostalgic suburban HDB hub, some 20-over years later.

Routes can remain unchanged for over 20 years, but facilities must be maintained, if not upgraded.

Upgraded Clementi Town Centre

Meanwhile, I also heard about the switch to the temporary Jurong East Bus Interchange as the Jurong East Interchange will also be upgraded to an "air-con" one just like the Clementi Bus Interchange, etc.

Then, suddenly all the bad news seem to hit the "headlines" for the public transport industry again for public scrutiny.

First, several serious and fatal accidents; with drivers even escaping from the scene. Next was a China SBS driver of Service No 52, though with the "right initiative" to escape from a traffic jam; drove his passengers on a 2-hour "joy-ride" when he got lost whilst seeking "guidance" from the control centre as reported by Channel 8 news reporter Wu Liang Xiang who happened to be in that SBS bus. Our public transporter adopts sophisticated GPS technology so that they can charge us "distance-based" fares but the same technology could neither tell the control centre where the bus was nor guide the driver to its proper destination, as could be seen in the video. Do they expect the public to pay to add to their "efficiency" ? LOL. Profits yes!, customer service...hmmm...maybe not ?

The previous weekend, I read in the Straits Times about shops in MRT Xchanges making losses and SMRT taking legal actions to wind them up for not paying rentals. To me this was wrong strategy for the SMRT. It had deviated from its responsibility and "core competence" as a public transporter by "improving the shopping experience" in its premises ... something I had posted in this blog here when the vandalism case hit. I doubt such improved "shopping experience", a brain-child of the current CEO who used to managed Singapore's Duty Free chain; could be sustained as they compete with the surrounding shopping malls. The basic lesson any MBA student would have learned about "competitive strategy" is to concentrate on your "core competence", not straying into something which will tie-down your limited resources, where others who know best are not your direct competitors. It must be a joke now that they are ranked by a US consultancy for topping in corporate governance ranking; above top firms like SIA & OCBC.

One Graffiti painter broke into its "restricted" Changi Depot premises, you could dismiss your responsibility and blame "others" including the public for the shortcomings. SMRT could start to do "nonsense" like what as I wrote here for "face-saving" but when another Graffiti hit at another depot, what did that demonstrated? No chance to push the blame, but what are the remedial actions? Just add more cameras at the perimeter fences hoping to re-coup back from future fare increases?

Is it something wrong with the corporate culture and "The Million Dollar Salary Syndrome" I wrote sometime ago when a Thai girl fell into the track and lost her 2 legs at the Ang Mo Kio Station? You  could turn it into a legal case ... but then ...???

Or did the Workers Party really hit the nail at the right spot when it called for a nationalised transport system during GE 2011? The ex-PMO Minister and Second Transport Minister Lim Hwee Hua had said that 'commuters would be worse off with nationalised transport system'. Is this really so, putting her loss at the last GE aside?

The 2 recent SMRT outages certainly illustrate that the "profit and market mechanism" isn't working, definitely not when the "corporate culture and business model" is all wrong. How long could it last to hide under the "skirt" of the PTC to deliver a never-ending stream of incremental profits annually? Certainly, the Workers' Party should raise questions over train disruptions , as it is the only opposition party capable to highlight the needs of a "nationalised transport system", which is not purely motivated by pure profits alone.

SMRT should think about "service delivery" first as a public transporter and forget about becoming another corporate giant motivated solely by profits and at the expense of the general fare-paying public and its shareholders. We certianly do not need any enhancement of "shopping experience" at the expense of a safe ride.

Hmmm...I wrote about the upgrading of the Clementi Bus Interchange and the surrounding HDB hub. As I recently sat for lunch at Swensen at Clementi Mall which overlooks the Clementi MRT Station, I recall it was opened in 1987, the year I graduated from NUS. Clementi Town / Interchange went through the upgrading I wrote above, what about our MRT 1 which is more than 20 years old? Care to read here (my letter published in TODAY, 2 July 2003)  about the "Dare and Imagination" of LTA when the NEL was opened "driverless" ? I dare not imagine the worst scenario. Are they waiting for the fares to rise first? It is increased incrementally every year after all.

Breakdown in communication - that is only good as the introductory part of an excuse. Where is the "maintenance" to deliver that undisrupted service and safe ride which justifies the incremental annual fare increase? It was no wonder the initial reaction of the outage was to inform SMRT taxi drivers about "income opportunity" - more profits? Something must be wrong with the corporate social responsibility, corporate culture and business model of SMRT. Or do you need a nasty accident as part of the feedback mechanism to justify spending on maintenance?

Communication Problem ? - Interesting Sign at old Temporary Clementi Bus Interchange - No jaywalking ? SBS drivers must run in Bus Park ? SBS Driver take buses within Bus Park free ?


  1. You mark my words here: the two immediate changes you can see will be these:-
    (i) MRT will remove all fire extinguishers from the trains
    (ii) MRT will post written warnings on its windows ''VANDALISM IS PUNISHED WITH MINIMUM 3 MTHS JAIL AND 3 STROKES OF THE CANE'' . The LOR this Gaman is BEST at handing out is ''You hoot my popperty, I hoot your kar cherng''.

    You heard it from SmellyCheesepie first.

  2. The problem is that they do focus on their core competence. They are good at sales. They forget their core responsibility of transportation.

    Someone thought an idiot can lead a good orchestra. But the idiot replaces more and more musicians with more idiots.