According to the latest financial report by the Land Transport Authority (LTA), Singapore’s millionaire Transport Minister Khaw Boon Wan incurred a S$1 billion loss – in a single year – in public bus operations contracts given to state-owned companies SBS Transit and SMRT.
LTA also posted the biggest government debt ever at a S$3.67 billion debt, with a borrowing of S$8.97 billion in FY2019.
LTA blamed “cheap fares” for its massive losses and gross under-estimation of its contracts:
“The Land Transport Authority (LTA), which awards these contracts, posted a deficit of $1.013 billion for the 2018/19 financial year. Bus fare revenue came up to $834 million. Along with other income of $78 million, the LTA collected $912 million in operating income.”
Under SBS Transit and SMRT, the two companies overspent estimation by 50% compared to five years ago:
“Expenditure came up to $1.925 billion, resulting in a shortfall of some $1 billion – about 50 per cent higher than five years ago. In the private sector, this shortfall would translate to losses.”
While LTA made a billion dollar loss, SBS Transit posted a huge 70% profit surge of S$80.1 million for the year ended 2018.
When contacted by the media, the Ministry of Transport denied responsibilities for the S$1 billion losses and cost overrun by comparing itself to bus operations in London, Toronto and New York:
“Despite the widening deficit, Singapore ranked second lowest in terms of cost in a 2018 comparative study done by the Nanyang Technological University. In the study, Singapore buses cost four cents per place-km. This was higher than Hong Kong’s 2.3 cents, but lower than western cities like London, Toronto and New York.”