Brace yourself for increase in bus and MRT fares.May 17, 2006
Smaller hikes this year, if any
Cap is 1.7%, lower than 2.4% last year, and any rise will take effect in October
By Christopher Tan
IF BUS and train fares go up this year, any increase will be capped at 1.7 per cent, lower than the 2.4 per cent hike last year.
Last year's 2.4 per cent cap resulted in bus and train fares rising in July by one to three cents per ride for ez-link card users, and 10 cents for commuters who use cash or buy single-trip tickets on trains.
Therefore, this year's increase is likely to result in smaller rises all round.
The Public Transport Council said this year's ceiling is based on a mathematical formula introduced last year that is more reflective of economic conditions.
From last year, fare adjustments are supposed to be annual affairs, as the authorities argued that small but regular changes were preferred to bigger jumps every few years.
When contacted, an SBS Transit spokesman said the company will probably apply for a rise when the time comes, while SMRT said it will decide only when the deadline draws nearer.
This year's application deadline was pushed to August, from this month, because the council needed more time to implement broad changes to the Public Transport Council Act.
These include a new licensing regime for bus operators, an audit system for bus operator service standards and a penalty system for fare evaders.
As such, any fare increase will take effect in October, instead of July.
With oil prices crossing US$70 (S$110) this year, it looks certain that the two transport operators will ask for a fare hike.
In justifying its application last year, SBS Transit cited a 40 per cent rise in oil prices to US$50 a barrel in the first quarter of 2005.
The company said then, even if it was granted the maximum fare increase allowed, the additional revenue of $14 million would not cover the estimated $17 million increase in fuel and energy costs for 2004, and a further $15 million to $18 million for 2005.
Council chairman Gerard Ee said the council will still have to look at the operators' books and 'ask them for justification' for any increase. It will also examine their profitability.
ComfortDelGro, SBS Transit's parent group, posted net earnings of about $200 million last year, while SMRT made about $100 million.
If the application is justifiable, 'we will then decide with them how the actual increases are to be applied', Mr Ee said, noting that last year's rise was not across the board.
In calculating the new fares, the council will also factor in data on average changes in the Consumer Price Index and wages.
Unlike the old formula which pegged fares only to the Consumer Price Index, the new formula allows fares to fall during an economic downturn.
With all factors considered, Mr Ee said the council and the Land Transport Authority will then run the numbers through a computer program to see if the overall increase is within the prescribed cap.
Asked what he thought about the recent call by the Workers' Party for the council to be abolished and transport companies to be nationalised, Mr Ee said nationalised entities need not be more efficient than private corporations.
In any case, 'who's going to set the fares?' he asked.
When it was pointed out that low-income families have seen commuting costs rise more than overall household expenditure, Mr Ee said it is more effective to target the poor with measures such as the $4 million transport fund set up last year to help 80,000 families.
'If we structure fares that are affordable to the poorest group, we will subsidise the other commuters,' he said. 'And that may not be fair to the transport operators, whose shareholders are not necessarily wealthy.'
Social workers reckon a fare rise will again hit low-income families hard.
'We regularly come across people who find it hard to pay bus fares. So they prefer not to work too far from their home,' said Ms Koh Wah Khoon, director of the Singapore Children's Society Family Service Centre in Yishun.
'There are some who walk to our centre, just to save on bus fare.'
Mr Ee, who is president of the National Council of Social Service, said if commuters want lower fares, they may have to manage their expectations - meaning they will have to make do with lower standards of service.
'We have a fairly reasonable system compared with many other countries,' he added.
Ha, right after the election fares for public transport is going to increase again.
But you should have expected it when the fare review is pushed back from May to October.
Mr Ee said that 4 million dollars transport fund was set up to help the poor.
But come on, what is $4 million compared to $100 million dollar profits?
Seriously, I do not think the fare increase is justified when these companies are making considerable profits.
They cannot expect us to pay more just to protect their profit margins every time the oil price increase.
Especially when they are still making good profits.