Hong Kong has a smart way of financing their system. It’s called “Lee Ka-shing”. The MTR makes its money from property. The company strikes a bargain with shop owners: in exchange for transporting customers, the transit agency receives a cut of the mall’s profit, signs a co-ownership agreement, or accepts a percentage of property development fee.
The MTR even owns entire malls. Hong Kong is essentially a rail + property model and finances itself as such. Take for example 2012; even though the MTR spent some US$3b on running their transport network, they still managed to eke out US$2b for shareholders.
What about Japan?
The Tokyo Metro is a network of private companies. One of these is, the Tokyu Corporation. Established in 1922 as a regional development company, Tokyu today is a massive “rail-based conglomerate” of nearly 400 companies that employs 30,000 people, only a tenth of which work directly for the railway.
The rail companies pour these profits back into the system; providing backups, alternative rail routes and plenty of spare trains. Commuters have plenty of other options even when one route is taken down.
That’s the Tokyo Metro. Look at the number of lines: if one goes down, commuters can take another one.
Metros are not just expensive, it is also data intensive. Which means you need very smart people in the rail operations.
It is ridiculously crazy mathematics. It is not as simple as “how many people can fit on a train” and “how many people can fit on an escalator”. It has to do with rates of acceleration, trigonometry, weight and size of passengers etc etc.
A delay of 2 minutes can cause a chain reaction that amplifies congestion. This triggers faults. Which means, if any one of the one million passengers drops a mobile phone, gets stuck in the door, keeps the door longer than intended, presses the emergency button, it would trigger a chain of problems that slow down the entire system.
All these solutions, problem solving, thinking and maintaining will involve talented manpower. Talented manpower needs to be paid; CPF, medical care, welfare, annual increments and training.
Running a metro system demands a lot of money, land, people, time and requires tremendous effort.
That’s why Johor Bahru doesn’t have one. Even the ones in Bangkok and Kuala Lumpur are not able to even serve 10% of our capacity.
What are the learning lessons for Singapore then?
Can we go the Hong Kong Rail + Property model? If we do that our property prices are going to escalate further, it will have direct impact on the goods and services that you pay for.
Can we go the Japanese model? We can, if we can have the same cohesive attitude of the Japanese. And fund it the same way as they do. Don’t forget, this is a people that has to live with earthquakes and tsunamis for generations. For them, it is either work together or perish.
In the global scheme of things, the SMRT is still not that bad. It’s got quite a few unfortunate issues, it’s got a few human errors but by and large, the system still works very well. We’ve never had situations where the entire line is taken down for months. We’ve never had a worker’s strike. In places like New York and London, trains can get stuck underground for over an hour. Stations can shut for weeks.