INCREASING pay and decreasing working hours for bus drivers is a zero sum game for SMRT and SBS Transit ("Signal to local transport operators to buck up" by Mr Gan Kok Tiong; last Monday).
Issues of pay and working conditions very much depend on whether commuters are prepared to pay higher fares to cover the shortfall.
Commuters tend not to be pleased when any fare increase is announced.
But the money to pay drivers has to come from somewhere.
Bus operators are trying to reduce capital expenditure by bidding for the contracts under the new public bus industry framework.
Under this framework, the assets and infrastructure are owned by the Government, while the bus operators focus on maintenance, operations and human resource.
The bids are based on a "reverse auction". The one who offers the best value for the lowest sum stands the chance of winning.
Being the lowest bidder does not guarantee success, as seen by how Tower Transit won even though its bid was around $100 million higher than the lowest bidder ("London-based Tower Transit wins govt bus contract"; May 9).
This is the correct way forward in awarding bus contracts. It shows it is necessary to take into consideration extra costs such as the welfare and pay increments of drivers and staff.
Balancing the cost burden with better working conditions is a difficult task. SMRT and SBS Transit should consider delisting from the Singapore Exchange. When they do not need to answer to shareholders, they can focus on their core rail and bus businesses.
Francis Cheng
