SINGAPORE: While the Network Capacity Factor (NCF) component in the new public transport fare formula can theoretically lead to overall fares going either up or down by year-end, transport experts Channel NewsAsia spoke to said a rise is more likely.
The new formula, which was announced by the Public Transport Council (PTC) on Thursday (Mar 22), will take into account how much demand from commuters grows or declines in relation to transport network growth.
The calculated amount from the new formula, though, will take into account the 3.2 per cent fare decrease that was brought forward from last year’s adjustment.
“If you look at the NCF component itself, it is very likely that the component will lead to an increase, although the other components will lead to a moderation of the fares,” said Singapore University of Social Sciences (SUSS) transport researcher Dr Walter Theseira.
“When you compare the expansion in the network versus the increase in ridership, I would say ridership is a flat figure while the network is expanding,” he observed. “Basically the network has expanded significantly, and - from what I understand - the year where the NCF will be computed on will be based on last year’s ridership.”
Added Dr Theseira: “I think what Singaporeans want is more convenience and less crowdedness. What that means is more capacity.
“And that’s why I believe the NCF component will be positive in the next couple of years. If this number is negative, what it means is that passengers are getting more crowded rides or there is less convenient service,” he said.
FARES BASED ON NETWORK EXPANSION
One scenario where the NCF would lead to lower fares is if there is no rail expansion, according to Singapore Management University (SMU) transport researcher Prof Terence Fan.
“If we’re seeing capacity being the same with no new lines being opened, and just the ridership has increased, then in that case, we’re going to see a decline in the fares,” he said.
“Basically the NCF accounts for how much the capacity has changed versus how much the ridership has changed. If you were to look at the past few years and you see an improvement in the capacity of the buses and the rail service, you will then see an increase based on the formula,” he explained.
The PTC, however, will still need to collate ridership figures provided by transport operators ahead of any change in fares, which is due to be announced in the third quarter of 2018.
Changes in fares will then be applied at the end of the year.
PTC chairman Richard Magnus said on Thursday that he is unsure how exactly the NCF factor will affect fares, but added that he “still has the 3.2 per cent reduction … to moderate what might happen”.
In a Facebook post, Transport Minister Khaw Boon Wan said that the Network Capacity Factor is "sensible".
"As the network expands or intensifies in response to changing commuter demand, it impacts the financial sustainability of the transport system," said Minister Khaw. "When changes are significant, some adjustments to fares, whether upwards or downwards, will ensure fairness between taxpayers and commuters."
SUSS lecturer Dr Theseira said that it is the people who would have to foot the bill in some way, for the upcoming public transport infrastructure upgrades. “You’re paying for the convenience basically,” he said.
“Someone has to pay for the convenience, and if it’s not the commuter then the taxpayer would have to pay for it.”