Wednesday, July 18, 2007

An efficient public service

COMMENT POSTED IN MY BLOG:

What do you mean - "owned by the people"? If the company is owned by the government, is it the same as being "owned by the people"? Even Income has shareholders. Who owns Income then?

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REPLY:

The key distinction should be the mode of operation and not on the type of ownership.

Some activities can be operated as a public service, on a cost-recovery basis, with the aim aim to keep the charges as low as possible. They do not aim to make large profit for shareholders.

Transport, utilities, health care and savings for retirement can be runned as a public service to meet the needs of the general public. They can be operated efficiently, at low cost, and high standard of customer service (without being privatised).

NTUC Income is operated as a cooperative, for the benefit of its policyholders. This is similar to a "public service".
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3 comments:

Anonymous said...

Yes, I agree that services which benefit the public largely can be run efficiently without being privatized. But I also hope that the extent of its effectiveness is not overstated.

Look at railway services in some countries:
* Japan: privatization works
* France: public ownership works
* British: both fails

July 18, 2007 1:01 PM
Thomas Phua's Blog said...

Co-operatives and public service cannot survive on fresh air and sunshine.

Many think co-operative must take all risk that other insurer do not take, like Incomeshield.

Co-operative has to also run a business not to tax on the rest of the pool thus prudent underwriting is necessary as in commercial insurer.

If commercial need to run a profitable business, public service need to run a surviving business.

July 18, 2007 1:23 PM
Anonymous said...

I would believe that Singapore's MRT should be run by a public operator as the infrastructure cost is huge and it is impossible to add new routes as and when required. Therefore, public administration to maintain the system on a cost-recovery basis to enable the mass to go from TOWN A to TOWN B efficiently.

The bus services should be a hybrid model with a public operator acting as the baseline for bus services in singapore while the private operators(2 or more) compete to provide value-added/niche routes. Since bus routes are highly configurable and companies looking to maximize profit will ply the profitable routes or discovered niche ones while the public transport is responsible for taking people from all points within the town to the nearest MRT.

July 19, 2007 6:43 AM

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