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Friday, 22 July 2011

To nationalise or privatise?

The recent call to review and perhaps nationalise the public transport of Singapore caught my attention.

There are pros and cons of course, but let's take 2 examples:

1) HDB - nationalised.

2) Taxis - liberalised and deregulated.


HDB

I thought there were lots of noise recently that HDB is not "transparent" with it's costing and pricing? Making too much profit? High prices and all?

So how would our public transport be better off being nationalised if the new entity adopts the same HDB pricing principles?

OK, let's assume the transport ministry won't follow the HDB "surplus" model. Then it's the deficit and "subsidised" model - and none can beat the Greek model: Can Greece's rail system scare up an investor?

If we want greater transparency, would a nationalised entity or a publicly listed transport company be more transparent with their costs, profit margin, return on investment, etc?


Taxis

Once upon a time, I only see blue Comfort taxis and black & yellow-top private taxis in Singapore. Now when I return to Singapore during home leave, I am amazed at the number of different taxi companies in Singapore - so many different colours now!

For free market competition fans, this liberalisation and deregulation should also apply to public housing to make HDB prices more competitive. Even more so for those who shout loud loud that Government should stay out of the private sector and not compete with local SMEs.

I don't know. Did free market competition result in lower taxi fares?


Who would win?

So we have 2 camps: the nationalise and free market privatise camp.

Clash of ideas and healthy debate of opposing views are good. It's how democracy should work. But if the same person today say privatise for apples, and tomorrow say nationalise for oranges, then its simply playing "politics". No? See people talk people; see ghost speak ghost.


Thinking out loud

I don't think the focus should be on the ownership structure. It's the quality of people running the show that should matter. Like the old NS joke of my time: Army is always good; its people that spoil the show.

By the way, I am a bit puzzled. If I am in opposition, I would never say nationalise (not when I'm not in power anyway). It's a bit like saying to the Government of the day that I trust you will do a better job than private enterprise?

A compliment to the ruling party and alienating private business owners and citizen shareholders? 

7 comments:

  1. I think basically, the public is fed up that the CEO, COO, CFOs of the transport companies are raking in big $$$ by running essential services that the masses has simply no other choice. TO continue to pay these utas management high salaries also cannot be justified if service is deem not satisfactory, with even lapses in security. So perhaps a simple solution is to be transparent about their pay packages with perhaps a pay cut, after all transport minister also expecting a pay cut. Then maybe the public can tolerate a 1-2 c fare increase as they would have felt vindicated. My 5 cents worth (inflation from 2cents)

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  2. I do not believe the problems currently faced by the transport companies has anything to do with the services being owned by public or private sectors. In fact, a nationalized public service is more inclined to hide its flaws and has less accountability than a privately owned, public listed company.

    I think they are doing a BAD job now. However, I have yet to hear anything that convinces me nationalizing it will actually be better. Politicizing the whole affair makes it that much worse.

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  3. Definitely Nationalize.

    In industrialized countries, almost everyone who can help it, would want to drive. It is the ultimate convenience and individual freedom.

    Obviously, in cities, particularly like Singapore it is not possible unless we drop our population back by 20% and triple our road network (triple deck - tunnel, and upper deck). Extremely expensive but government does not want to spend even though most citizens are ok - overcomes physical limitations, can be done through more creative financing and transferring this cost burden to the market (like variable return bond and list on the stock exchange through private road providers who collect tolls via our ERP system).

    When people buy cars, they don't care if it sits in the garage or when it is used - they already have an expectation of the value from it (which in a Singapore setting - it is uneconomic).

    The current transport companies operate as listed for-profit enterprises - therefore they will never do any "uneconomic" activity. Which is why our transport services are not the same as having your own car.

    By Nationalizing, you:
    1. set the standards for transportation sky-high; connectivity equal to your own car, schedules as convenient as having your own car, sheltered and comfort level at peak hours equal to having your own car
    2. with no concern to return excess returns to shareholders, you need only concentrate on meeting regulator proscribed quality standards
    3. you can run as a non-profit but does not mean you run at a loss.
    4. it is also ridiculous that you have to concentrate on revenue generation through property (commercial space at stations and stops so you can raise funds to provide services)
    5. truly persuade people to give up their cars
    6. finally make ministers and MPs must take public transport to work regularly - else they can never get people to believe them - one issue not to vote for them; pay themselves well enough that cars not a problem but did not act to properly compensate the loss of the right to buy a car through a properly maanaged transport system

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  4. Thanks for your comments!

    I guess I need to share where I stand for context and perspective:

    1) I believe in small government.

    2) I believe in personal responsibility.

    3) I believe in private enterprise.

    4) I believe in meritocracy and fair competition.

    And if anyone tells me to trust him as he will take care of me, I will instinctively reach for my wallet to make sure its still there!

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  5. 'And if anyone tells me to trust him as he will take care of me, I will instinctively reach for my wallet to make sure its still there!'

    indeed, the road to hell is paved with good intentions!

    found your blog via a comment on angrydoc's blog. :)

    ReplyDelete
  6. Hi Jun - princess of peach blossom island!

    Thanks for visiting :) You have a very interesting blog!

    Love your soliloquy, and found the translation of Li Bai's poem cool. Lucky I seldom use "kindly" - now I know it's talking down. Didn't know that!

    You make me feel more "normal" - it's OK to have many "interests" - I still have room to expand my rojak blog!

    So don't be surprised if you find "lao wan tong" lurking in your blog for inspirations :)

    ReplyDelete
  7. thank you SMOL! we can all learn from one another.

    btw, rojak blogs definitely make for great reading! :)

    ReplyDelete

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