SINGAPORE: Bus and train fares will go up by 7 per cent from Dec 28, the Public Transport Council (PTC) announced on Tuesday (Oct 8), the maximum allowable increase under this year’s fare review exercise.
This will translate into an increase of 9 cents per journey for adult commuters who use travel cards. They make up about 65 per cent of all public transport trips here.
Those using cash on buses, or who purchase single-trip tickets for train rides, will see a steeper increase of 20 cents per trip.
The cost of monthly concession passes will go up by between S$1 and S$5.50, while the price of adult monthly travel passes will go up by S$8.
Concession groups - such as students, senior citizens and those with disabilities - will pay 4 cents more per journey. About two million commuters - or more than one in two Singaporeans - enjoy concessionary fares, said the PTC.
Full-time polytechnic and diploma students, however, will see a drop in their cost of commute.
They currently pay adult fares but will have student concessions extended to them, allowing them to save up to S$1.54 per trip.
In a Facebook post, Transport Minister Khaw Boon Wan said that in any fare adjustment, the Government tries to keep the increase "as low as possible" so it affects as few people as it can.
"Fortunately, more than half of Singaporeans receive substantial discounts from the normal fare of up to 70 per cent. This includes students, senior commuters and Workfare recipients," he said.
Mr Khaw also noted that the PTC's move to cap the fare increase to no more than 4 cents for concession groups protects the interest of "two million or so" commuters.
"With this, their fares on average are not higher than 2015 levels," he added.
The increases are based on the current fare adjustment formula, which came into effect last year and takes into account factors such as energy prices and inflation.
VOUCHERS FOR LOW-INCOME HOUSEHOLDS
To further help lower-income households, the PTC will have both SMRT Trains and SBS Transit contribute about S$3.89 million to the Public Transport Fund - more than double last year's amount.
Of this, S$1.88 million will come from SBS Transit, while S$2.01 million will come from SMRT. This represents 5 per cent and 10 per cent of their expected increase in fare revenues respectively, said PTC.
It will allow 450,000 public transport vouchers to be made available to help lower-income households cope with the fare increase.
All households with a per capita income of no more than S$1,200 per month - about one in every five households - will qualify for the vouchers.
Households can apply for the vouchers - which can be used to purchase or top up fare cards, as well as buy monthly concession passes - at community centres and clubs (CCs) from Nov 11 this year to Oct 31 next year.
Those who require more help can apply for additional vouchers through the CCs, which will assess these applications on a case-by-case basis.
BALANCE BETWEEN FINANCIAL SUSTAINABILITY AND AFFORDABILITY
Speaking to reporters, PTC chairman Richard Magnus said that the council sought an “equitable and delicate balance” between financial sustainability for operators and the affordability of fares for commuters.
He noted that the costs of running public transport have increased, largely due to a worldwide rise in energy prices as well as manpower wages.
READ: Review of transport fare formula needed to reflect rising cost of operating MRT system: Khaw Boon Wan
Both SMRT and SBS Transit had incurred losses on their rail operations.
SMRT Trains reported a net loss of S$155 million for the financial year ending in March, while SBS Transit had reported losses of S$125 million for the Downtown Line over the past three years, adding that its train division has lost "tens of millions of dollars" in the last financial year.
Both companies had applied for the 7 per cent increase, citing rising costs due to expenses such as maintenance and the introduction of new rail lines.
The Government subsidises about S$1 billion per year for the upgrading of rail assets, and another S$1 billion to subsidise bus operations.
“Running a reliable public transport system is costly, and we have to strive towards a more sustainable financing model,” said Mr Magnus, adding the adjustments would allow fare revenue to increase by about S$132.5 million.
Of this, SBS Transit Rail will see increased revenue of about S$18.8 million, while SMRT Trains' revenue will go up by about S$40.2 million.
Bus fare revenues will increase by about S$73.5 million, which will be used by the Government to offset bus operation subsidies.
Mr Khaw said in his Facebook post that it requires "sound judgment" to distribute the costs of public transport between commuters and tax payers.
This is relatively easy when fares are adjusted downwards, he noted, as was the case between 2015 and 2017.
"But when fares need to go up, as for example when oil price increased drastically last year, PTC’s job becomes more challenging," he added.
The Ministry of Transport will step in to help lower-income families, Mr Khaw said.
This year, the Government we will extend 50 per cent more Public Transport Vouchers and increase the value of each voucher to S$50, up from S$30.
"This extra assistance will cover one in five resident households, up from the previous one in 10 households," he said.