Fines on transport operators are paid by shareholders!

The fines imposed on MRT and bus operators are ultimately paid by shareholders. The Board of Directors and senior management are not punished and so they will have no incentive to improve service standard. If the amount of fines gets higher, directors and management will propose higher fares to cover the fines paid.

What do you expect? The SMRT top mgt take cuts in salary and bonuses to cover fines?

In a society such as Singapore where mediocrity is key, such elites are well shielded from punishment. I wonder if this is the true meaning of mediocrity.... perhaps uniquely Singapore.


Long live PAP!!! PAP!!!! PAP!!!! PAP!!!!

(17-12-2011 04:31 AM)Blue_Bamboo Wrote:  The fines imposed on MRT and bus operators are ultimately paid by shareholders. The Board of Directors and senior management are not punished and so they will have no incentive to improve service standard. If the amount of fines gets higher, directors and management will propose higher fares to cover the fines paid.

pls lor... all the fines are paid by customers not shareholders as profitability of smrt are assured via fare increase / cutting of service etc. so in the end its customers who suffer... not shareholders.. in fact they are better off cos if the management get their act together and avoid these fines in future.. all the additional revenue became profit...

(17-12-2011 10:40 AM)sggold Wrote:  pls lor... all the fines are paid by customers not shareholders as profitability of smrt are assured via fare increase / cutting of service etc. so in the end its customers who suffer... not shareholders.. in fact they are better off cos if the management get their act together and avoid these fines in future.. all the additional revenue became profit...

I think you are right in nearly every part except the additional revenue became profit. If you take a look at the div given out by the public transport company, it had not increase even though profit increase. However the CEO package had been keep increasing.

(17-12-2011 12:40 PM)Lesser Mortal Wrote:  I think you are right in nearly every part except the additional revenue became profit. If you take a look at the div given out by the public transport company, it had not increase even though profit increase. However the CEO package had been keep increasing.

yup.. i shld hve put it that the gross profit is higher but net is lower as they are paid out as special bonus again and again... when they fail.. customers suffer.. when they do ok, they get big bonus! kind of like banking failure in USA?