SINGAPORE: Reviews of public transport fares from 2018 to 2022 will factor in a new variable which takes into account changes in public transport capacity, the Public Transport Council (PTC) announced on Thursday (Mar 22).
The Network Capacity Factor (NCF) will reflect the "year-on-year change in capacity provision in relation to passenger demand for the entire public transport system".
This means that new fare adjustments will take into account how much demand from commuters grows or declines in relation to transport network growth.
The PTC said public transport capacity increased by around 25 per cent from 2012 to 2017.
"In particular, more than 1,000 new buses have been introduced through the Bus Service Enhancement Programme and Bus Contracting Model since 2012. Over the same period around 200 new trains were injected into the network to augment the capacity of existing rail lines," the council said.
With the addition of new lines, the rail network has lengthened by 74km. While these were welcomed by commuters, they come at a cost, PTC said.
While annual operating costs increased by around S$900 million between 2012 and 2016, annual fare revenue increased by around S$230 million, covering about 25 per cent of the increase in costs.
Meanwhile, fares have fallen over the past three years mainly due to lower energy prices. The Government has stepped in to provide substantial subsidies, the council said.
The fare revision formula will still take into account inflation, wages, energy and productivity. However, the PTC will update the weights for the price indices and the Productivity Extraction Factor to reflect the existing industry cost structure.
As for how much transport fares will be affected by the new formula, this can only be fully revealed in the third quarter of 2018, according to the PTC.
"We still have a 3.2 per cent quantum reduction which we brought over from 2017's fare review. Also, only after we get the commuter numbers from the various public transport operators can we get a better picture of how much the NCF will affect transport fares," said PTC chairman Richard Magnus.
The possible change in the public transport fare formula was hinted at by Transport Minister Khaw Boon Wan in the Committee of Supply debates earlier this month. He said subsidised fares were “popular but unsustainable” due to planned infrastructural upgrades.
He added that the cost of maintaining infrastructure has risen over the years and that a relook into the formula would be needed.
"Over the next five years, we will provide subsidies of about S$5 billion for public bus services and S$4 billion to renew our rail operating assets," Mr Khaw had said. "Another S$20 billion will be invested in infrastructure to further expand the public transport network."
The council also announced that rail transfer rules will be relaxed, so that commuters do not have to pay a new boarding charge if they were to exit one MRT station and walk to another station on a different line to continue their trip within a certain time period.
In a Facebook post after the announcement, Mr Khaw said the new public transport fare formula to include 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," he wrote.
"When changes are significant, some adjustments to fares, whether upwards or downwards, will ensure fairness between taxpayers and commuters."