Land Transport – BT

PTC gives nod for net 1% hike in bus, train fares

THE Public Transport Council (PTC) has allowed an overall net fare adjustment of one per cent, and operators SBS Transit and SMRT can expect a combined increase in annual revenue of $15 million.

From Oct 8, 2011, adult card fares for buses and trains will go up by two cents a journey, while senior citizen concessionary card fares will increase by one cent a journey although senior citizens will now get concessionary travel all day throughout the week.

Child/student concessionary card fares remain unchanged. But cash fares for adult bus and train rides will be 10 cents higher per trip across-the-board. There will be no change to senior citizen and child/student cash fares.

The PTC said that overall, the average fare increase translates to about 15 cents a week or about $8 a year for the 85 per cent of commuters who would experience a fare increase.

In July, the two public transport operators applied for the maximum fare adjustment of 2.8 per cent allowed under the fare formula for 2011, citing rising fuel and manpower costs.

‘The approved fare adjustment of one per cent is significantly less than the quantum of adjustment that the operators have applied for,’ said PTC chairman Gerard Ee.

He said that the decision comes after careful deliberation, and the council balanced the need to keep fares affordable with the long-term viability of the public transport operators so that they can continue to make capital investments and provide the expected quality of service.

Mr Ee cited the example of SMRT, which has already bought 238 new buses for $100 million to renew and expand its fleet from next month until December 2012, and SBST, which has purchased 600 buses for $268 million for delivery this year and the next.

‘We have tried to keep the fare adjustment small for commuters but we know that any fare adjustment, no matter how small, would still be felt by commuters, especially those from needy families,’ he said, adding that those who need additional assistance will get help from the government’s Public Transport Fund. To help needy families cope with the fare adjustment, the government together with SMRT and SBS Transit have set aside $4 million to fund 200,000 public transport vouchers.

Mr Ee also said that the PTC focused on senior citizens because of the greying population and to support moves to encourage them to work beyond retirement age.

The PTC said that the fare adjustment took into consideration Singapore’s economic outlook and the affordability of public transport.

‘The economic outlook remains positive with the latest forecast for GDP to grow by 5-7 per cent in 2011, and the latest unemployment rate as at June 2011 remains low at 2.1 per cent,’ the council said. ‘The public transport affordability indicator has also been on a downtrend for the past seven years, falling from 5.3 per cent in 2003 to 3.7 per cent in 2010. This indicates that bus and train fares have remained affordable for the majority of commuters.’

Under the fare formula, the maximum fare adjustment allowable is calculated by subtracting 1.5 per cent from the Price Index, where 1.5 per cent is the productivity extraction set for the five years from 2008-2012. As for the Price Index, it is derived from adding half of the change in the Consumer Price Index over the preceding year, to half of the change in the average monthly earnings for all workers over the preceding year.

The PTC delayed 2011’s fare adjustment to coincide with the opening of the final two phases of the Circle Line on Oct 8. The exercise usually takes place in the middle of the year.

This year’s hike comes on the back of two straight years of cuts. Last year, the PTC granted an overall 2.5 per cent reduction in bus and train fares and that took effect on July 3, 2010 with the introduction of Distance Fares. Under Distance Fares, the transfer penalty was removed completely, so commuters travelling the same distance pay the same fare for the same type of service, whether they travel direct or make transfers. Then, the PTC said that the 63 per cent of commuters who enjoyed fare savings spent an average of 48 cents a week less, or $25 a year. As for the 34 per cent of commuters who saw an increase in their public transport expenditure, the average increase was 31 cents a week or $16 a year.

In 2009, SBST and SMRT announced that they would not apply for fare adjustments that year due to the global financial crisis. Both worked with the PTC to pass back savings from the 2009 Singapore Budget, so that from April 1, 2009, commuters benefited from an overall 4.6 per cent cut in bus and train fares.

Under the fare adjustment formula in 2009, the public transport operators could have applied for an increase of up to 5 per cent. But before 2009, fares were increased in the preceding three years – 0.7 per cent in 2008, 1.1 per cent in 2007, and 1.7 per cent in 2006.

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