Transportation System in Singapore

Today, the government announce that it will spend $20b to build 2 new subway lines.

Differentiation of government roles
From the existing method of running a country either by free-market or by centrally planned government, there is a "division of roles" within the government itself. The government can let the country run by itself via free-market and have centrally planned elements. For example, Singapore can be said to be a free market although restrictions definitely exist, it's transportation system is centrally planned.

This also means that the duopoly of existing transport companies - SMRT and Comfortdelgro cannot fully exploit passengers. Because the 2 companies' main goal is to maximise profit and account to their shareholders, while the government's goal is to improve the efficiency of the transportation system and of course the welfare of the people.

Currently, the government is planning to reduce their operating licenses from 30 years to 10-15 years.

Travelling Efficiency
In the short term, the government will get subway operators to run at a higher frequency. This would definitely reduce operator's profit margin in both the short and long run until new lines are completed.

But the main problem is that everyday, majority of the people are travelling towards the same destination which is the cbd area. Everyone who wants to interchange trains have to cramp at Raffles Place or City Hall. From the NEL, people also travel to Outram Park or Dhoby Ghaut and then to RP or CH, thus increasing the inflow.

However, all may be fine when the Circle Line finish. Although the circle line will divert passenger flows, the impact will also depend on fares the circle line will cost relative to the existing lines.

Futuristic View
In an optimistic view, future Singaporeans will depend on the public transportation system than the cars. This will inturn improve domestic growth as less money is spent on cars and fuel that can be considered as imports not relating to domestic consumption. This will inturn create more jobs.

There will be an increase in Off-Peak-Cars(OPC) through the years when new lines emerge. The trend has already been growing.

This however can be refuted as cars are not only means of transport but are status symbols that boost man's ego.

The government has to keep the fares down or else those in the low income group will not be able to survive because their wages are relatively stagnant and with rising inflation, all is not good.