Additional costs incurred by public transport operators due to COVID-19 not 'adequately covered' by fares: Khaw Boon Wan
SINGAPORE: Additional costs incurred by public transport operators because of the COVID-19 outbreak are not "adequately covered" by current fares and will "eventually have to be borne by operators and taxpayers", said Minister for Transport Khaw Boon Wan on Tuesday (May 5).
In a written reply to a parliamentary question by Nominated MP Walter Theseira - who had asked about the impact of safe distancing on public transport services - Mr Khaw said that ridership and fare revenues have plunged while expenses have increased during the COVID-19 pandemic.
Public transport operators have stepped up cleaning of buses and trains, protected their workforce with masks and face shields, paid to house bus drivers affected by Malaysia's movement control order, as well as deployed transport ambassadors and enforcement officers to ensure safe distancing among commuters, said Mr Khaw.
At the same time, current ridership has dropped by 75 per cent for buses and 84 per cent for trains compared with pre-COVID levels, while fare revenues have plunged 80 per cent.
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The situation has placed transport operators under "significant financial stress" said Mr Khaw, pointing to how rail operations were making losses even before COVID-19.
"Operating costs could have come down if supply was adjusted to match falling demand, but operators have largely preserved service capacity and headways to ensure that commuters can maintain safe distancing," said Mr Khaw, who is also the Coordinating Minister for Infrastructure.
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Last year SMRT Trains - which operates four MRT lines - reported its net loss had widened to S$155 million for the financial year ended March 2019, while SBS Transit flagged in its most recent financial statement that it expected rising costs from operations and maintenance, particularly for its rail business.
"For now, the impact on public transport operators is partly cushioned from the broad-based Government relief measures such as the Job Support Scheme, property tax rebates and waiver of the foreign worker levy," said Mr Khaw, adding that the temporary suspension of electronic road pricing (ERP) has also helped reduce costs for bus operators.
Associate Professor Theseira had also asked about plans for public transport financing should COVID-19 continue to affect demand.
The authorities will have to see how public transport evolves after the pandemic, responded Mr Khaw.
"Will demand for public transport services simply return to the pre-pandemic level? Or will Singaporeans decide to adopt working from home, and flexitime as the new norm? Or will more Singaporeans take to cycling as their preferred mode of commuting?" he asked.
It is premature to assess the long-term impact of the coronavirus outbreak on public transport financials, noted Mr Khaw.
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"Suffice to say that the pandemic will reshape our economy, our way of life and how we move about," he said.
"If the impact is drastic, we may have to update the current financing model for public transport appropriately."
Fares for buses and trains were increased by 7 per cent at the end of last year, with the Public Transport Council noting at the time it had sought to balance financial sustainability for operators and fare affordability for commuters in determining the increase.