The Public Transport Council (PTC) on Wednesday (Nov 19) announced it has started the annual fare review exercise.
Public transport operators may submit their applications for fare review to the PTC for consideration by Dec 19. The decision will be announced in the first quarter of 2015, according to the press release.
Responding to media queries, SMRT’s Vice-President for Corporate Information and Communications Patrick Nathan said: “We seek a better alignment of fares and operating costs, and will be submitting our application for a fare review in the coming weeks.”
To evaluate applications robustly, the PTC will take guidance from the fare review mechanism and fare adjustment formula recommended by the Fare Review Mechanism Committee and accepted by the Government in Nov 2013.
The new fare adjustment formula is now based on core inflation (excluding property and car prices), average wage increase and an energy component.
“This will ensure a good balance between meeting the needs of the commuting public and keeping the public transport system financially sustainable. In discharging its responsibilities, the PTC will pay particular attention to fare affordability for the more vulnerable groups of commuters,” the PTC said.
Public transport fares were last adjusted in Apr 2014 as part of the 2013 fare review. There was a fare increase of 3.2 per cent – just half of the total fare cap of 6.6 per cent. It means the remaining 3.4 per cent will be brought forward to this year’s fare review exercise.
Mr Cedric Foo, chairman of the Government Parliamentary Committee for Transport, said: “If you look at the new formula, it has a new component called the Energy Index and that constitutes 20 per cent of the formula.
“As we have seen lately, fuel prices are coming down. Therefore, they hope that if you apply this formula, and core inflation is also not high, wage inflation is also not high, they hope that this may be zero or even negative. So I am hopeful that the full 3.4 per cent rollover from last year will not be implemented in full.”
INSULATING VULNERABLE GROUPS
In a Facebook post on Wednesday, Transport Minister Lui Tuck Yew commented on the fare review exercise, stating that public transport must continue to be affordable for all Singaporeans.
“I hope that the Public Transport Council will study if we can insulate vulnerable groups such as senior citizens from a fare increase, or at least mitigate the impact on them,” he wrote. “In the same regard, the Ministry of Transport will also study how we can similarly enhance the concession schemes Government introduced for lower-wage workers and persons with disabilities earlier this year.
Mr Lui added that this exercise builds on the improvements of last year’s fare review, and he has received “positive feedback” from Singaporeans who have benefited from new and enhanced travel concession schemes.
These include monthly concession passes for polytechnic students, and the introduction of the Adult Monthly Travel Pass, which frequent commuters can purchase to cap their transport expenditure.
“I hope the PTC can consider not raising the prices of these travel passes,” wrote Mr Lui. “I have also asked the Land Transport Authority to study whether we can strengthen our ongoing travel demand management efforts, and encourage more commuters to travel during the off-peak hours. Perhaps the Government can introduce off-peak monthly passes; which should also help reduce the travel expenditure for this group of commuters.”
Still, Mr Foo said that one still has to look at the overall trend of fare increases: “If you look at it over the last six years, actually the compound annual growth rate in fare is well below half a per cent.
“If we look at wages, wages have clearly increased by more than half a per cent at each point. So, in the context of long-term fare trend, fare increases cannot remain at zero for good. That’s unrealistic because it’s not sustainable. But let me stress at even if there is a modest increase in fares, we have to look after the vulnerable groups.”