Public Transport Council starts 2016 fare review exercise

Public Transport Council starts 2016 fare review exercise

Train operators may submit fare adjustment applications to the The Public Transport Council by Oct 7.

MRT gantry commuter
Commuters at the fare gantry of an MRT station. (File photo: TODAY)

SINGAPORE: Train operators may submit fare adjustment applications to the Public Transport Council (PTC) until Oct 7, after the council on Tuesday (Sep 13) announced the commencement of the 2016 Fare Review Exercise.

With the transition of the public bus industry to the bus contracting model, however, bus operators will not be required to apply to the PTC for approval of fares.

For this year's fare exercise, the PTC will be guided by the existing fare adjustment formula, which takes into account the consumer price index, energy costs and wages, and is valid until the end of 2017.

Based on this, the maximum allowable fare adjustment quantum is -5.7 per cent.

An analyst Channel NewsAsia spoke to said this means commuters can expect a fare reduction, given that two of the three components have shown a decline this year.

Said Dr Park Byung Joon, a senior lecturer at SIM University's School of Business: "(It is) very likely that fares will go down. But what remains to be seen is whether they're going to allow the full 5.7 per cent reduction (to) happen this time, or whether they are going to reserve a little bit and carry it over for next round, just in case, as a buffer for the future.

"But you have a reduction in the CPI and a reduction in the energy index, (so) it's very likely that there'll be a fare reduction after this fare exercise."

Transport Minister Khaw Boon Wan is also expecting a reduction in fares. In a written reply to a Parliamentary question on Tuesday, Mr Khaw said he expects the PTC to consider "a maximum fare reduction of 5.7 per cent".

He said this fare reduction quantum is "due to the sharp fall in energy prices over the last year". But he emphasised that energy prices can be volatile and may rebound sharply in the following years.

Mr Khaw was replying to a question posed by Member of Parliament Gan Thiam Poh, on whether the council will consider a reduction in fares in the annual review.

The PTC said it will announce its decision on the fare adjustment quantum in the last quarter of 2016.

In considering the applications, the council said it will ensure that fares strike a balance between ensuring that the public transport system is financially-sustainable and keeping fares affordable for commuters.

Source: CNA/am/ms