Tan Kin Lian - Perspectives Contracting model for public transport
1. This is my understanding of the contracting model for our public transport (i.e. bus and MRT).

2. The government collects the fares (as recommended by the Public Transport Council) and pays the operators (of the bus and train services) based on the tender to provide the services. The operators collect the fees for their services and do not have any interest in the revenue. 

3. The annual report of LTA for the year 2021/22 showed a total revenue of $1,862 m and total expenditure of $4,759 m giving a deficit of $2,897 m. The deficit for the previous year was $2,896 m. 

4. The government is bearing a heavy subsidy. If the want to remove the deficit, they have to increased fares by 150%. 

5. I believe that LTA can cut down its expenses by perhaps 20%, if they operate more efficiently. I have seen many buses operate at low capacity. Also, we have too many bus services.  Even if LTA can cut down the operating expenses by 20%, they will still need to double the fares to break even. 

6. The bus and train operators (i.e. SMRT, SBS, Tower Transit, etc) are quite happy, because they receive their tender sums and after paying their actual expenses (i.e. salaries, petrol, etc), they are able to show a good profit. 

7.  I have seen several people make comments and "judgment" based on a lack of understanding of the actual situation. This is not helpful. Before making a comment, check the facts and understand the situation. 

Tan Kin Lian

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