TR EMERITUS

Why do EZ-Link cardholders have to pay 20 cents every time they top up their card at all DBS, OCBC ATMs and AXS stations? The easy answer is "... if we can collect more money, why not..." This new gotcha came into effect at the start of July. Top up is still free if effected at places like Transit Link sales offices, Add Value Machines and General Ticketing Machines (GTM) located at MRT stations and selected bus interchanges - they are not telling us where - as well as EZ-Link Top-up Machines at People's Association (PA) Community Centres. An EZ-Link card user said: "I didn't even know that this new surcharge update was there. So I think it would have been much better if they put up some kind of notice to inform the general public." In response, EZ-Link said the top up fee of 20 cents had already been waived for 5 years to allow sufficient time for consumers to try out the service. Apparently now is the time to collect. EZ-Link claims they have been bearing the cost, without explaining how and where the cost is incurred since DBS, OCBC ATMs and AXS stations are the interfaces affected. Maybe some $2 company is acting as middle men between these unmanned terminals and the faceless EZ-Link. The Consumer Association of Singapore, not exactly one famed for championing the cause of consumers in Singapore - you actually have to pay them a fee to look into a complaint - said EZ-Link should "enhance transparency by communicating better to consumers by putting posters at permanent locations such as at the walls near ATMs." What, and ruin the golden opportunity to rip off customers who don't read the fine print? Posters are fine to boost poor attendance at PA hosted events like live broadcast of football matches, but broadcasting avenues for cutting costs and saving precious money is never top priority.   Tattler * The writer blogs at http://singaporedesk.blogspot.com    Read More →

Transport Minister Lui Tuck Yew During the Parliament debate yesterday (7 Jul), Transport Minister Lui Tuck Yew told Parliament that having regular fare increases is one way to ensure the financial sustainability of the new bus contracting model. Under the new bus contracting model, the government will own all bus operating assets and pay bus companies a fee to deliver bus services. The government will be responsible to plan all the bus routes and the bus companies will compete to bid for these routes. However, when asked how much the new model will cost the government, Mr Lui refused to say. "I think it is probably not in the Government's interest to reveal any budget that we may have set aside and how much we are prepared to subsidise before the tenders are issued and the returns are seen as this may well skew the bids against us," he said. He also said that it is not clear at this point which packages of bus routes would need subsidies and how much that would cost. He said the government is currently studying the matter. When asked how he intends to keep the new model financially sustainable in the long term, he replied that it would be done in few ways: By assessing whether new bus routes have enough ridership to cover operating costs; By weighing the cost of providing better service standards against increasing operating costs; By having regular fare increases "From the middle of the last decade, I think we had actually allowed operating costs to well exceed the fare increases that were taking place each year. So for example, from 2005 until 2012, when we had the fare review committee's work and we suspended any fare increases thereon - 2005 to 2012, the annual fare increase was on average, 0.3 per cent,” said Mr Lui. “We know, of course, that wage increases were much higher than this 0.3 per cent. Likewise, fuel cost. So there will be a need for us to make sure that we have regular fare increases of the right quantum.” According to SBS Transit 2013 annual report, despite the wage increases and fuel cost, which Minister Lui mentioned, SBS Transit was, nonetheless, earning a healthy operating profit of $15.5 million last year. Still, Mr Lui did say that the government will be guided over the next few years by the formula that has been established by the fare review committee, as well as decisions made by the Public Transport Council with regard to future fare increase. Minister Lui used to ridicule WP’s call to nationalise public transport Right after the 2011 general election, WP reiterated its call for a nationalised public transport system. WP’s call then drew an immediate response from Transport Minister Lui Tuck Yew [Link]. Minister Lui said while a nationalised public transport system might seem attractive, it has serious implications. At the time, SBS Transit and SMRT had sought permission from the Public Transport Council to increase fares. The operators argued that they faced increasing costs despite efforts to manage costs and increase productivity. Commenting on WP’s call for nationalisation then, Mr Lui pointed out that this idea would result in commuters paying more for not necessarily better service over time. He said in this case that operators would depend on government funding as well as operate on a cost recovery basis. This, he claimed, would not spur them to lower transport costs. “Not only would people have to pay more, nationalising the operators could result in a stagnation of service quality or efficiency over time,” he added. Quite clearly, in Mr Lui’s mind then, nationalisation meant nationalizing the operators. When asked if SMRT and SBS Transit were making substantial profits, Mr Lui said it was not unreasonable for them to expect a fair return on their investments. The 2 bus operators had to sustain their operations and invest in future public transport needs. A few days later, NCMP Gerald Giam – speaking on behalf of WP – gave a very good rebuttal to Mr Lui’s comments [Link]. Mr Giam said: Mr Lui mentions the ‘serious’ downsides of a nationalised public transport system, while ignoring workable examples – even locally – where the government heavily subsidises public services or even provides services directly to the public. Schools, for example, are mostly government run. Public hospitals and clinics are heavily subsidised. Even public housing is subsidised by public money. Yet when it comes to public transport – an essential service for the majority of Singaporeans – the government advocates its provision by listed corporations, whose first priorities are to their shareholders. Mr Giam explained that public transport is a public good that serves a national purpose, in the same vein as healthcare, education and public housing. “Thus running it on a cost-recovery basis will create positive externalities if it benefits the overall economy, for example, by getting people to work on time and in comfort,” Mr Giam said. “In the face of the pressing need to provide this public good, it is clear that the present public transport model needs to be overhauled.” Mr Giam cited the “crush loads” experienced by commuters every day and the public outcry each time fares are increased as evidence of the failure of privatized public transport. “It would do Singaporeans no good if the government sticks dogmatically to its narrow philosophy of the virtues of privatisation and the profit motive, without considering the true economic reality of the public transport industry in Singapore.” Almost 3 years later and after losing Punggol East to WP in a 4-way by-election, the PAP government is finally “nationalising” the public bus industry due to “changes in the social and operating environment”. However, the PAP government would rather call the change a new “government contracting model” than “nationalisation”, for fear of giving WP the credit it deserves.    Read More →

10 reasons why I do not trust GIC to manage my CPF savings The CPF Minimum Sum (MS) has been increased to $198,500 with effect from 1 July 2014. (MS must also include Medisave Account) The PAP government claims it is for a our “secure retirement”. However, the manner in which it channels billions of our CPF into the GIC for ‘investments’ is certainly a cause for concern. 1.  Minister Lim Swee Say has already confirmed “many investments had been lost during the global financial crisis”. The government should be upfront with CPF members on the exact amount lost. I am sure Minister Lim has the figures and was unlikely to be speculating. Is it $10 billion, $20 billion or $50 billion? If GIC is still performing well, it should have investments which more than made up for these huge losses. Please list them. 2.  Placing our CPF in the GIC is WRONG. Why? According to the GIC, its “aim is to achieve good long-term returns for the Government”. CPF monies do not belong to the Government, they belong to CPF members. Since when are CPF members obligated to help achieve long term returns for the Government? 3.  CPF monies belong to individual members but the Government issues SSGS to the CPF Board and then transfers the money into GIC. The government does so to hide the ownership status and by the ‘legislated conversion’ in government reserves, the monies effectively belong to the government. In MOF’s answer to “Who manages our reserves?”, MOF stated “The Government’s assets are mainly managed by GIC Private Limited”. Since when did CPF members allow our savings to be converted to “Government’s assets”? 4. It is also wrong for the Government to guarantee CPF members’ returns for the obvious reason that GIC is a professional fund manager. The Government cannot use tax dollars, and penalise taxpayers, to guarantee CPF members in the event of the failure of a private fund manager. 5.  GIC’s sister company, Temasek Holdings, has been more transparent and has even listed its major investments, as well as other relevant data, on its website. Why does GIC not even list a single investment? 6.  Even all the stocks of Warren Buffet, legendary investor, are known to the public through the Securities and Exchange Commission filings. The possible reasons for GIC not to disclose its holdings are: - it is covering up huge unrealised losses, - its good investments are not able to make up for those which have incurred huge losses, - it tries to prevent the revelation of many lost investment during the financial crisis. (as confirmed by Minister Lim) 7.  There is evidence that GIC is probably the biggest punter and a yield seeker. After committing about $25 billion of CPF monies in UBS and Citigroup, Tony Tan, then deputy chairman of GIC, in a way acknowledged the bad investments and said that CPF funds may be stuck with peanuts returns for “many years”. In other words, investing is like ‘tikam-tikam’. Bad investments can be simply put in the ‘cold storage’ without any accountability. Why do we need to pay millions for such fun(d) managers? 8.  Bloomberg reported that then chairman of UBS had called then GIC CIO, Ng Kok Song, on “Dec 6 2007 and by the evening of Dec. 9, GIC had committed to make its biggest single purchase at the time”. Imagine placing a $14 billion bet in 3 days! Can anyone really trust an organisation which does not bother about due diligence when investing such an astronomical amount? According to the MOF, “GIC is a fairly conservative investor”. ??? 9.  GIC’s “Newsroom” is basically a joke like no others. Since 2009, GIC has announced only 14 transactions. It appears to be selective in its announcements where transactions such as selling more than $300 million worth of shares in Bunge Ltd is not considered newsworthy. However, “Winners of the GIC essay prize” is considered news. YEAR BUY SELL OTHERS 2014 8 0 2 2013 4 0 7 2012 0 0 3 2011 0 0 11 2010 0 1 7 2009 0 1 10 TOTAL 12 2 40 With so few transactions, how does GIC generate returns to pay CPF members? If GIC really has nothing to hide, why does it continue to be opaque? 10. I will never trust the PAP government until transparency is improved. If the PAP government is still uncertain on how to go about it, I would suggest it follows the Norwegian model. I am sure all CPF members would agree on this. Take a look at a complete list of Norway’s equities, fixed income and real estate. The ‘reason’ for GIC’s opacity is an insult to any guy with average intelligence. CPF members must know they have the right to transparency. Phillip Ang *  The author blogs at  likedatosocanmeh.  Read More →