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Profitability should not be main concern for rail operators
The Straits Times
July 18, 2019
When it comes to public transport systems, profitability should always take a back seat to the more pressing concerns of quality and affordability (Rail operators cannot sustain large losses for long, July 13). Given the “public” nature of public transport, a rail system should be measured by its ability to serve the people, and not its ability to generate additional wealth for the operators of state-owned assets. It is the fiduciary duty of public transport operators to plan for adequate preventive maintenance and remedial work, failing which costs are covered by the public purse, as with recent projects and rolling stock procurements. The profitability of a metro system does not always have direct bearing on service quality compared with the competency and efficiency of the system’s management team. However, the farebox recovery ratio would show whether the transport operator can manage the system well to achieve a balance in operating costs against fares collected. When fares can cover operating costs, the farebox ratio is 100 per cent. Most metro systems in the world operate between 30 per cent and 60 per cent.... Continue Reading