Who Really Pays for MRT Fines?

Today’s Straits Times reports about LTA reviewing the penalty framework for MRT breaches. Everyone’s very mad about all the recent MRT breakdowns, particularly the two major incidents in December 2011. We’re all thinking that the MRT operator should be fined heavily. But do you wonder, at the end of the day, who really pays for the fines?

If the operators’ bottom lines are affected by these penalties, or side-effects of such penalties (e.g. increased maintenance costs), they’ll ultimately petition the Public Transport Council for fare increases. So what do you know, eventually commuters will find themselves having to pay more.

Do you think the MRT operators will sacrifice profits, payouts to directors, dividends to shareholders, etc, and absorb costs associated with these breaches?

The LTA needs to find a way for the MRT operators to be truly penalized. This isn’t going to be easy. But it needs to be done, otherwise, it doesn’t make a whole lot of sense to penalize them. The costs gets transferred to commuters, and commuters have no real alternatives. Yeah, if you don’t take the train, you’ll take the bus. Even assuming the busses are reasonably good alternatives, guess who operates the busses?

Singapore’s eagerness to “privatise” various infrastructure service providers don’t quite seem to be such a bright idea now. A national rail company may not be so efficient, but perhaps they will be more focused on their real purpose rather than being driven entirely by profits and side-businesses that generate more revenue.