Monday, April 18, 2011

What's wrong with nationalising the MRT operations?

Recently, there were concerns that a nationalised public transport system can result in inefficiencies and a drop in service levels. I have to disagree with that way of thinking.

If you have read my previous post here, you will know that I am quite impressed with the Taipei Metro. I did a little digging and guess what? The Taipei City Government owns 73.75% of the Taipei Metro. Is the Taipei Metro inefficient? Far from it.

I believe that it should not be a given that all services provided by private companies will be efficient. My opinion is that companies will only be efficient when the circumstances require them to. If the company is in a monopoly or duopoly position, how efficient can they be? For example, one of our current MRT providers seems to be focused on renting out spaces in the MRT station then focus on improving the service levels.

Theoretically, if the MRT operations are run by the government, any feedback will go directly to them. Unless the ones in-charge are not receptive to the feedback, any changes required will not take more than 20 years due to contract obligations. Just this alone will make the operations more efficient. Furthermore, I'm sure the government will also be focused on running the MRT operations well, and not let the leasing of shops divert their attention away from the core business.

Is spending 6-12 mins waiting for the next train at all our MRT stations and interchanges efficient? If the Taipei City Government can run their operations such that the waiting time is only 3-6 mins, I believe our government can match, or do better.


Anonymous said...

totally agreed

Anonymous said...

Here's an idea: why does a central piece of the public trust have to turn a profit?

chantc said...

There's a difference between not-for-profit and for-profit organisations. You will definitely need profits for any business because there will be capital needs for your businesses (e.g. employee salary, fuel cost, research into newer technology, etc).

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