$7.2B Bus Contracting Model : Why Wasn’t Parliament Approval Sought?


By: B Goode

The government has just announced a $7.2B deal for the two bus operators to…..run buses.

The agreement involves 11 bus packages with estimated total contract fees of S$5.322 billion for SBS Transit and S$1.865 billion for SMRT Buses.

First of all, let’s get the amount into perspective.

Yahoo, a company with a huge global brand recognition was sold for less than that amount. And the operating infrastructure for SMRT’s NSEW MRT lines was bought by the government for $1B.

So $7.2B is a freaking huge sum of money. And it was approved off-budget, meaning the expenditure was not tabled in Parliament as part of this year’s budget.

For that kind of money and for something as seemingly complicated and absurd as paying existing bus operators to operate buses, the government should have tabled a motion in Parliament for debate.

Of course we can argue that getting Parliamentary approval will be a meaningless exercise since the PAP government is in the majority but that is beside the point.

The point being; the government could then explain more in-depth and provide more clarity about the plan, rather than just issuing of a short statement which left people scratching their heads.

I for one would like to see the following questions being answered by the government:

  • How did the magic number $7.2B derived?
  • What is the money for? Since the government has already stated that there will not be any transfer of assets, what is the money for?
  • If the money is to ensure better performance by the bus operators, it is akin to saying that we should pay the Ministers more to get them to perform better. Oh wait!
  • If it is the cost of buying back existing contracts that were signed by the government many years ago with the two bus operators, could we then say that the $7.2B is the price that the government pay for its mistake?
  • Can the government assure us that this new bust contracting model will not be another mistake?
  • And finally, how will this money be disbursed?

Parliament is there for a purpose. It doesn’t matter if the elected members thought of themselves as mere estate managers. One of its purposes is to get the executive branch to explain things like this.

It is therefore incumbent for the government to show good faith in tabling a motion in parliament to get its approval for extra-budgetary spending.

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