PTC tweaks formula for adjusting public transport fares
By Imelda Saad, Channel NewsAsia | Posted: 10 July 2008 1609 hrs

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SINGAPORE: Another round of public transport fare hikes is likely this year, but commuters can expect the rise to be cushioned by a new fare structure formula.

One group of commuters who stands to benefit are those who make multiple transfer journeys.

Currently, a commuter incurs what is called a transfer penalty every time he boards a new bus. To offset this, the commuter is given a 25-cent rebate each time he switches from bus to bus, or bus to train.

But this rebate does not fully offset the jump in fares. To address this, a distance-based through fare system will be introduced by 2009.

But for now, Singapore's Public Transport Council (PTC) will look into increasing the transfer rebate to close the gap.

Singapore's Transport Ministry says about four in ten commuters currently make transfer journeys on a weekday.

With the new through fare structure, commuters can take as many buses and trains to their destination without being penalised with a higher fare.

Changes will also be made to the fare adjustment formula, which will see the public transport operators share their productivity gains with commuters.

This means the maximum annual fare adjustment will be capped at 3 per cent instead of the higher 4.2 per cent under the old formula.

The formula is pegged to macroeconomic factors - namely changes in the Consumer Price Index and average monthly earnings. The formula has been in place since 2005 and valid for three years.

The revised formula will be applicable for five years, instead of three, to give commuters and operators more certainty in fares.

The PTC was quick to point out, though, that the maximum annual fare cap of 3 per cent does not determine the actual fare adjustment.

Whether a commuter's bus fare will go up by more than 3 per cent or less, or whether a commuter actually stands to save money, will depend on the distance travelled and the number of transfers made in a journey.

Simply put, if a commuter takes long bus and train journeys with many transfers, he will see a net reduction. But he will probably end up paying more for short trips.

Public transport operators are expected to submit their applications for a fare review in August.

The PTC will decide on the actual adjustment in September and new fares will kick in in October. - CNA/ir