Thursday, July 2, 2009

MRT trains to come under single operator?

At present, SMRT operates the NS line, EW line and the Circle line. Comfort Delgro operate the NE line.

It is advantages for SMRT to operate all the lines. This will allow the services to be better integrated, remove wasteful competition, reduce operating cost, and (hopefully) reduce train fares.

The snag is, "how much should SMRT compensate Comfort Delgro to take over the NE line? "

This question is difficult for both parties to solve. I suggest that this matter should be decided by an Arbitrator, and that the Government should appoint this Arbirtrator to resolve this issue. It cannot be left to the two companies to sort out.


  1. huh? like that good meh ?
    monopoly is worse than duopoly.

  2. Do tell me in what way is competition between the two companies wasteful. In fact it is likely that the competitive benefits of having two operators outweigh the efficiency gains. And why would any arbitrator help in assessing the value? In my opinion, the two companies should not merge, and even if they do, the fair price can be worked out among themselves, since they know the value of their services and assets the best. Any external party can only interfere negatively.

  3. There is no real competition between the two operators. They serve different clusters of commuters.

    The only way to have competition is to choose between trains or buses or other forms of transport, and not between different MRT lines.

    In any case, the MRT fares are supposed to be controlled by the Public Transport Council. I said "supposed".

    There are inefficiency in having two sets of overheads and people to manage the two lines. If the entire system is placed under one operators, the overheads can be reduced.

    There is also wasteful competition. SMRT runs buses from Dhoby Ghaut to Chinatown to offer an alternative to the NE Line. They have to publicise this line. I do not know if Comfort Delgro retaliate in some way.

    Competition should be to improve efficiency, and not to introduce wasteful capacity.

  4. It would be even better for the govt to take over the MRT and run it on cost recovery basis rather than with profit maximising motive.


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