The Reform Party Comments on Ms. Saw’s Resignation in relation to the COI
Published: 7th January 2012- Jumped or pushed?
The Reform Party calls on SMRT to clarify recent contradictory statements made about Ms. Saw’s resignation as CEO of SMRT.
In statements about her resignation The Chairman of SMRT says that she told him of her desire to step down at a board meeting on December 7th before the service breakdowns. However, in the aftermath of the disruptions, on 18th December 2011 she “told Channel News Asia that she has no plans to step down over the disruptions” and went on to say that “she is staying put to make everything right” We note that in the space of three weeks Ms Saw has had a complete change of mind. It would appear that it is a case of being asked to resign rather than going of her own free will.
It is imperative that Ms Saw should not be made into a scapegoat or sacrificial lamb in advance of the COI as this may district from proper scrutiny into the role that the Transport Minister and Temasek have played in the SMRT fiasco.
- Golden parachute
It is right and proper that full disclosure be made of Ms Saw’s leaving package and stock options. In a true resignation she should not receive any remuneration except for what had accrued up to the day of leaving. Will she be retuning her free easy link card?
- Interim replacement
We ask the SMRT to explain the rationale behind the interim appointee. Mr Tan is another Malaysian National, like the outgoing CEO and also like her lacks transport Industry experience or experience of running a consumer facing organization. As a Nation are we lacking a Singapore citizen with the right credentials and expertise to act as a replacement?
- COI Terms of Reference
We repeat our call for the COI to be given much wider terms of reference. In addition to examining and correcting the failure of regulation, it needs to examine why it is not possible to achieve a break-up of the current duopoly and the introduction of a much greater degree of competition and greater participation by actual consumers and their representatives.
- Ms Saw’s initial appointment
SMRT is government-controlled through Temasek and operates in a monopolistic market where its only competitor is also government-linked, and benefits from subsidized costs of inputs (tracks, trains and stations). Thus it is difficult to understand why her remuneration should have been so high particularly given her lack of experience in the mass transit industry. Indeed the Committee of Inquiry needs to investigate the reasons for her appointment in the first place as well as the rationale behind her remuneration whether she is still in her post or retired.
- Safety must be SMRT’s primary concern
Her concentration on retail and advertising revenues, where her experience lay, meant that she took her eyes off the ball of ensuring the safe and efficient operation of the transport network which is and must always be SMRT’s primary and overriding responsibility. The other members of the management team responsible for maintenance and risk management should also share some degree of culpability.
- Culpability of Temasek
However as we said in our previous press release of 18th December responsibility for the fiasco does not end with Ms. Saw but also extends to the management of Temasek which as the majority shareholder will be consulted on all major decisions affecting SMRT. This includes the appointment of the senior management and board of directors and capital expenditure.
- The Transport Minister’s responsibility
Ultimately it is the Transport Minister who is responsible for the debacle given SMRT’s dependence on the Land Transport Authority (LTA) which he heads. The LTA leases the track and infrastructure to SMRT and in turn SMRT is responsible for the maintenance of the track. LTA has also leased the brand new Circle Line rolling stock and other infrastructure to SMRT at very low rates for ten years. Clearly LTA must be held to account if it has failed to ensure that SMRT is carrying out its duties responsibly.
The Transport Minister’s responsibility does not end there. Given that SMRT operates at present in a highly monopolistic environment, it is his responsibility to ensure that it does not use the lack of competition to inflate returns to shareholders or the salaries of senior management. As fare increases are controlled by the Public Transport Council (admittedly a body which contains far too many people with governmental or industry links rather than consumers), cutting back on maintenance and adequate staff training would be one way of doing so.
- Failure of regulation
The Minister has apparently failed to prevent this happening. There has been a complete failure of regulation given the government’s choice of a highly monopolistic industry environment in which all the trains, buses and the majority of the taxis come under the control of two companies, one of which is directly owned by the state and the other has close ties to the government.
Kenneth Jeyaretnam
Secretary-General