Smrt Profit 150 Millions


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Yappy

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May 30, 2004
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#1
Last week, ZB reported that SMRT made 150 millions and ironically on the same page SMRT was asking for price increase in the fare!
 

sORe-EyEz

Senior Member
Jun 28, 2005
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#2
i din read the ZB report but did it mention the profit alone (that'll be more accurate).

its a world class transport system wad, profit no. 1! idid remember it being vote as 1 of the best regionally (got a pic of near-empty carriage)? :dunno:
 

pisduck

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Apr 1, 2008
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#4
I don't see anything wrong in making a profit. err... does it mean if it make a loss than you guys happy? So does it mean that it charges $10 per trip but make loss of $100 million it is ok?

Lets say there is 1 million MRT users. That is around $150 a year or $13 a month. Seriously, common if you don't let SMRT make profit, how to encourage SMRT to be efficient??? You want our public transport to be those kind that cannot make profit one izzit? Like that you know what will happen? basically the fare will go up even higher as nobody cares about efficiency. Why should they as there is nothing in it for them.
 

night86mare

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#5
solutions proposed by robert frank to overcome inefficiencies of monopolies, very common first year microeconomics textbook, summarised - one of the better sections

1) perfect price discrimination, i.e. every consumer pays the maximum amount he is willing to pay for the good - closest real life example: second hand car market
*imagines the smrt uncles standing by the gates bargaining with you how much you willing to pay to get on the train*
OUT

2) regulation, i.e. government legally requires a price = marginal cost, giving same scenario as perfect competition (hypothetical situation where you have unlimited number of firms which produce according to consumer demand), and reproduces the same sort of conditions

cons: firm has incentive to argue about operating costs and no incentive to keep it down - your choice

3) free entry, i.e. let more firms enter the market - only possible for non-natural monopolies. looking at smrt, OUT.

:think: :think: :think:

come come, anyone wants to add on more creative solutions?

p.s. btw, don't come and kb me for quoting textbook, cos people like to say i like to argue. now i just quote other people lor ;p
 

Yappy

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May 30, 2004
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#6
I agreed with night89mare....

Create competition and let the best win the race.

The authority had seen this as a possible solution to make them more efficient.

Open up the market and let them run the show and hopefully that it does not end up like the patrol with everybody making the same adjustment... either up and down almost at the same time.
 

Yappy

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May 30, 2004
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#7
I don't see anything wrong in making a profit. err... does it mean if it make a loss than you guys happy? So does it mean that it charges $10 per trip but make loss of $100 million it is ok?

Lets say there is 1 million MRT users. That is around $150 a year or $13 a month. Seriously, common if you don't let SMRT make profit, how to encourage SMRT to be efficient??? You want our public transport to be those kind that cannot make profit one izzit? Like that you know what will happen? basically the fare will go up even higher as nobody cares about efficiency. Why should they as there is nothing in it for them.
I agreed with you. It is in the interest of the public that public transport must be efficient and serve the people.

Can we make them better?
 

night86mare

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#8
I agreed with night89mare....

Create competition and let the best win the race.

The authority had seen this as a possible solution to make them more efficient.

Open up the market and let them run the show and hopefully that it does not end up like the patrol with everybody making the same adjustment... either up and down almost at the same time.
actually, no, you misunderstood my post.

perfect competition in the transportation market would not work in singapore. sure, the infrastructure is already there - for the most part, in terms of lines being laid, and a network already in place.

dividing up the pie, however, is not very viable - you are likely to end up with fragmented companies with increased overheads compared to what you could achieve with economies of scale with current situation. i would call this a natural monopoly - i.e. it isn't exactly enforced, but no one can break in because of the way things are.

nor would it have worked from the start either - sooner or later any fragmented company would merge in this situation.

to get companies which are viable in a perfect competition situation - you need a very unique sort of structure - bubble tea shops and dim sum chains are one example of this.

the only viable solution that MIGHT work is to actually regulate transportation fares - i.e. set price controls equivalent to their operating costs. this , unfortunately, will more often than not, as seen in the past in other countries (albeit on different situations) cause another sort of problem - like inefficiency, or a blatant waste of resources because there is no incentive whatsoever to keep costs down.

singapore is far too small.
 

Yappy

Senior Member
May 30, 2004
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#9
Thank you for the clarification.

I think price control should be the last resort.

Let the market determine the fare. I know that such measure had failed and had lead to unhealthy competition. But why don't we give the public transport sector a try?
 

#10
Thank you for the clarification.

I think price control should be the last resort.

Let the market determine the fare. I know that such measure had failed and had lead to unhealthy competition. But why don't we give the public transport sector a try?
Sure, would you be willing to take the risk and have price increased even more than what it is increasing now?

There is no perfect way about it. The transport companies exist to make profit, else it will not exist. Who can decide what is fair increase? It depends on an agreement between the groups on both side of the fence. As it is, the price is regulated to ensure that the cost is affordable.
 

Yappy

Senior Member
May 30, 2004
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#11
Sure, would you be willing to take the risk and have price increased even more than what it is increasing now?

There is no perfect way about it. The transport companies exist to make profit, else it will not exist. Who can decide what is fair increase? It depends on an agreement between the groups on both side of the fence. As it is, the price is regulated to ensure that the cost is affordable.
I also agreed with you and I am confused now.

So any other constructive suggestion?

The base is they exist to make money else nobody would take on the job.

1. Let market force determine the fare..
2. Regulate the fare by the authority

It is just like having a basic salary for the workers or let the market decides individual's salary.
 

Exposure

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Apr 6, 2008
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#12
heard their staff got very good variable bonus.
 

psyk1

New Member
Jul 31, 2007
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#13
I don't see anything wrong in making a profit. err... does it mean if it make a loss than you guys happy? So does it mean that it charges $10 per trip but make loss of $100 million it is ok?
I don't think being unsatisfied with them making large profits and then increasing price at the same time means commuters actually prefer they make loses. It just irks people that these companies raise prices yet at the same time show strong profits every year.

p/s: you don't happen to be working for smrt do you? ;p
 

smalltake

New Member
Oct 10, 2006
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#14
Make money? This is public transport........ not a private limited coy. $150m still not enough?????? :confused:

Lucky I drive..... petrol? I am switching to CNG...... try to give petrol a miss. Hope u guys do the same..
 

paradigm

Senior Member
Aug 12, 2004
3,672
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#16
actually, no, you misunderstood my post.

perfect competition in the transportation market would not work in singapore. sure, the infrastructure is already there - for the most part, in terms of lines being laid, and a network already in place.

dividing up the pie, however, is not very viable - you are likely to end up with fragmented companies with increased overheads compared to what you could achieve with economies of scale with current situation. i would call this a natural monopoly - i.e. it isn't exactly enforced, but no one can break in because of the way things are.

nor would it have worked from the start either - sooner or later any fragmented company would merge in this situation.

to get companies which are viable in a perfect competition situation - you need a very unique sort of structure - bubble tea shops and dim sum chains are one example of this.

the only viable solution that MIGHT work is to actually regulate transportation fares - i.e. set price controls equivalent to their operating costs. this , unfortunately, will more often than not, as seen in the past in other countries (albeit on different situations) cause another sort of problem - like inefficiency, or a blatant waste of resources because there is no incentive whatsoever to keep costs down.

singapore is far too small.
maybe the best way is WE pay them to OPERATE the system.

ie, operating cost aside, company WILL GET $100m profit depending on operating standards met ... then company will hv incentive to provide the best level of training etc ... keeping operating / maintenance cost low can be one of the standards set to obtain the optimal amt of maintenance.

Fares are to be set by LTA and SMRT's profits to be paid out by LTA from fares. In that case, company will hv no incentive to increase fares but to maximise effectiveness and efficiency to keep the "$100m profit" ...

come again, was there not some announcement a month back regarding the public transport system being divided into "zones" like Brisbane etc ... multiple transfers within the zone cost the same, something like tt ...
 

ninelives

Senior Member
Jan 16, 2002
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#17
the increment of fare doesnt justify the service smrt provided. come on man, i need to wait 10 mins for a train in the morning( around 10 am/weekday), can you image the crowd?? also, on a certain website , based on survey, singapore got the worst transportation system (amongst urban countries).
 

zcf

Senior Member
Apr 10, 2005
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#18
actually, no, you misunderstood my post.

perfect competition in the transportation market would not work in singapore. sure, the infrastructure is already there - for the most part, in terms of lines being laid, and a network already in place.

dividing up the pie, however, is not very viable - you are likely to end up with fragmented companies with increased overheads compared to what you could achieve with economies of scale with current situation. i would call this a natural monopoly - i.e. it isn't exactly enforced, but no one can break in because of the way things are.

nor would it have worked from the start either - sooner or later any fragmented company would merge in this situation.

to get companies which are viable in a perfect competition situation - you need a very unique sort of structure - bubble tea shops and dim sum chains are one example of this.

the only viable solution that MIGHT work is to actually regulate transportation fares - i.e. set price controls equivalent to their operating costs. this , unfortunately, will more often than not, as seen in the past in other countries (albeit on different situations) cause another sort of problem - like inefficiency, or a blatant waste of resources because there is no incentive whatsoever to keep costs down.

singapore is far too small.
I wonder why Hong Kong Bus Transport seem to be always work better than Singapore, they have competition also :sweat:
 

night86mare

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Aug 25, 2006
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#20
I wonder why Hong Kong Bus Transport seem to be always work better than Singapore, they have competition also :sweat:
are you being objective here?

i cannot say with absolute certaintity that the bus services in hong kong are equivalent to singapore, in fact i felt they were inferior. very messy bus stands, extremely erratic timings for the services i took.. and of course it is not uniform.

on the other hand, the mtr is superb. ;) though going to central in the mornings is as bad as going to city hall in the mornings.. :(
 

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