This story was printed from TODAYonline
Of rail and
retail
SMRT more than just about moving people, says CEO Saw Phaik
Hwa
Weekend January 8, 2005
Tor Ching Li
[email protected]
EYEBROWS were raised two years ago when the new president and CEO
of train operator SMRT Corporation was named an industry outsider
was going to head the 6,000-strong company, and a woman to
boot.
Straight-talking Saw Phaik Hwa was not fazed; she charged into the
job, bringing to it what has proved to be her very useful
experience with airport retail chain DFS Venture Singapore.
Last year, SMRT Corp, which is listed on the Singapore Exchange,
reported a near trebling of its interim earnings, with profits of
$81.3 million, for the six months ending Sept 30.
And she did it without raising fares.
Said Ms Saw: "Although fares are reviewed annually, we have not
applied for an increase in fares over the last three years because
of the weak economy. Our fares have actually come down as we have
been absorbing the rise in GST.
"We have been going all out to make SMRT the customer's choice. We
want to drive ridership to improve our profitability. At the end of
the day, it's a bottom line thing."
Citing SMRT's ongoing Ride-For-Free Countdown as an "aggressive"
and "out of the box" promotion tactic where till April this year
commuters of SMRT buses and trains stand to win prizes such as a
Nissan March or a year's free travel Ms Saw quipped: "Would you
think of a train system having a lucky draw?
"In the old days, SMRT's mission was to be a reliable and safe
train system. But if that's your mission in life, it's very
uninspiring!
"So we want to be more than just reliable and safe because we do
want customers to choose to use our system. Our mission is to be
the customers' choice. Of course, a lot of people say 'no choice,
must take train'. But if you take that as a fait accompli, then
it's a non-starter we're not going to get anywhere.
"We take it that we owe it to our customer whether they have a
choice or not, we shall be their choice."
SINGAPORE ICON
This guiding principal is now an integral part of SMRT's Vision,
Mission and Core Values set out earlier this year, as part of SMRT
Corp's brand building initiatives.
In May this year, the group launched a $2.5-million initiative to
rename Tibs Taxis and Trans-Island Bus Services under the SMRT
brand name and motto of "Moving People, Enhancing Lives".
Said Ms Saw: "We're not just about moving people, but enhancing
lives as well."
The efficient MRT system, said Ms Saw, should be as much of a
Singapore icon as Changi Airport.
"We want Singaporeans to know that SMRT can always be trusted to do
the right thing, regardless of the situation," she added.
This means implementing a pay freeze during Sars, outsourcing and
streamlining staff size for the new economy, offering its 2,400
SMRT taxi drivers a "comprehensive" $1-million relief package to
cope with the rising price of diesel, reaching out to the community
through charity work and spending $150 million upgrading its first
batch of trains which are now 17 years old.
"We've got to be all things to all people at one go," said Ms Saw.
"For shareholders, our added value comes from other non-fare
related revenue."
The first "can do, must do" revamp that Ms Saw kick-started was the
overhaul of the "horrible looking" retail outlets that used to
occupy MRT stations.
"I come from not only a retail background but airport retail where
every square metre costs thousands of dollars, and every square
inch is so powerful and important!" she exclaimed.
FOREIGN TRAVEL
Ms Saw, 49, is also keen to develop SMRT's foreign business
potential. There is "tacit agreement" that SMRT will be a partner
in the operation and maintenance of Jakarta's ambitious $1-billion
monorail system, which is due to be up and running by end
2007.
Said Ms Saw: "In the past, SMRT has not taken a very aggressive
stance overseas, even though many countries know us and have come
looking for us to partner them in projects. We are now positioned
to do so."
According to Ms Saw, SMRT is also "keeping a close eye" on how
things develop in China's and India's rail systems, which they are
already "very involved in". More specifically, it will be bidding
for Shanghai's urban rail project, where SMRT is already acting as
a consultant.
Ms Saw also plans to grow her share of the local taxi market of
20,000 from just 10 per cent.
"In a free market, it is not realistic for the second largest
player to remain at that level with just 2,000 licences. It's
foreseeable to grow to 20 to 30 per cent eventually.
"We have to continue to seek opportunities to improve. There's
always a better way to do something, technology-wise or
organisational. We must grow the business successfully and I would
like to continue to give my staff good bonuses and competitive
salaries."
ALL ABOARD
SMRT is currently taking a "proactive" approach to encourage people
to go out and take the trains, such as working closely with
shopping centres and retailers along the MRT and LRT lines to
publicise the happenings in various malls.
"I'm not forcing you to go out, the choice is yours, but I'm giving
you a reason to travel and enjoy your leisure, you see," said Ms
Saw, who stays along Coronation Road West where there is ironically
"no bus or train" service to take to work.
And the plan must be working according to statistics from the
Land Transport Authority (LTA), the number of trips taken on the
MRT and LRT every day has risen by 67.4 per cent, from 760,000 in
1995 to 1.27 million for the 12 months up to March this year.
Ms Saw herself takes the train "whenever possible" to get around
town after driving to work in either her BMW 745i or Nissan 350Z
sports car.
But even as Ms Saw encourages people to shop along her train lines,
she is not indulging in shopping for train lines herself.
"The answer is no, I have not
been made an offer I can't resist (to buy over the SBS Transit's
North East Line)", said Ms Saw with a laugh. Since operations
started late last year, the NEL has chalked up losses of $20
million even with negligible maintenance and repair costs.
Said Ms Saw: "I'm very willing to run the NEL even if it doesn't
make a lot of money, if it's for the 'greater good'. But a loss of
$20 million a year will not be tenable for our
shareholders."
Inevitably, talk of a rail deal has resurfaced following the recent
media merger. But Ms Saw said: "Integration is tougher in our
industry. I can't stop running the trains, increase the fares or
cut the service. Costs savings and efficiency opportunities are
limited. Revenue will not change unless the population in the area
increases."
COME TOGETHER
"I always feel that for Singapore, it makes sense to integrate the
whole transport system buses, taxis and trains should be
integrated for the greater good of Singapore. That's one area I
feel Singapore can do better as a country. Otherwise, there will be
duplication and waste."
"Unlike other countries where a monopoly may be viewed negatively,
in Singapore there's the LTA and the PTC (Public Transport Council)
to ensure efficiency and efficacy."
On the flipside, this inter-agency web currently contributes to a
"lack of connectivity" between the MRT stations and nearby
buildings.
Lamented Ms Saw: "Compared to Japan or Hong Kong, where train
operators are given the land to develop, in Singapore there are
more opportunities to improve in terms of connectivity and
integrated shopping."
Overzealous enforcement of strict fire safety code has also
resulted in Singapore having "the least exciting train stations
compared to any other new areas in the world", according to Ms
Saw.
For example, SMRT was only allowed to paste four A4 pieces of
fire-resistant posters at each station to publicise their
Ride-For-Free Countdown promotion.
"I'm fully sympathetic with the need to enforce safety, but it's
just the incongruity of people walking in and out of stations
wearing far more flammable material than our posters. Hopefully in
time, we will become more open in how we do things."
Mention the spate of MRT suicide cases last year, and Ms Saw shrugs
in incomprehension: "To me, there is more to live than to die
for."
In other words, there's always light at the end of the
tunnel.
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