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No changes to bus, train fares due to COVID-19 downturn: Public Transport Council

No changes to bus, train fares due to COVID-19 downturn: Public Transport Council

Commuters on the train during rush hour on Jun 2, 2020, the first day of Phase 1 post-circuit breaker. (Photo: Gaya Chandramohan)

SINGAPORE: There will be no changes to public transport fares in light of COVID-19 and its impact on the economy, the Public Transport Council (PTC) said on Friday (Sep 4) after its annual fare review exercise.    

The two transport operators here, SMRT and SBS Transit, had applied for the maximum increase of 4.4 per cent, said the PTC, adding that it decided against granting any fare adjustments.

"With this decision, the full fare adjustment quantum will be rolled over to the next FRE (fare review exercise) in 2021," it said in a media release.

The PTC added that it will continue to “monitor the macroeconomic indices and prevailing economic conditions closely”.

“In making its decision for 2021 FRE, the council will also continue to balance fare affordability and financial sustainability,” it said in a media release.  

Last year’s fare review saw bus and train fares go up by 7 per cent. 

Members of the Public Transport Council speaking at a virtual press conference on Sep 4 2020. (Photo: Public Transport Council)

“We recognise the exceptional economic circumstances faced by Singaporeans and have decided to keep bus and train fares unchanged to help ease the financial burden on commuters during this challenging period,” said PTC chairman Richard Magnus. 

He added that beyond the freeze in fare increases, the council will closely monitor developments in the COVID-19 situation and the impact on Singaporeans. 

"Our priority will be to safeguard commuters’ interests, while ensuring a financially sustainable public transport system that continues to meet the needs of Singaporeans in the years to come,” he said. 

Mr Magnus noted that should the COVID-19 crisis continue into next year, this would likely affect the macro-economic indices influencing fares, such as declining wages and oil prices.

“I doubt very much that we’ll see a fare increase (should current conditions continue),” he said. 

READ: Travelling or telecommuting – how COVID-19 could affect public transport costs in Singapore

IMPACT ON PUBLIC TRANSPORT OPERATORS

The decision not to adjust fares was made despite the impact of COVID-19 on public transport operators here, the council said, citing reduced ridership and the need to step up cleaning routines.

SBS Transit, which operates the North East and Downtown lines, cited losses in its rail operations, as well as “significant cost pressures” in areas such as manpower and repairs and maintenance.

“In its latest financial year, SBS Transit’s train segment reported a loss in tens of millions of dollars,” the council said. 

Meanwhile SMRT, which runs the North-South, East-West, Circle and Thomson-East Coast lines, pointed to “escalating costs to operate an expanding train network with increasing operations and maintenance demands”, as well as additional costs to ensure a safe transit environment in light of the pandemic. 

“For its latest financial year ended March 2020, SMRT Trains recorded a net loss of around S$20 million after tax,” said the council. 

READ: Additional costs incurred by public transport operators due to COVID-19 not 'adequately covered' by fares: Khaw Boon Wan 

“Despite the drastic fall in whole-day ridership by around 75 per cent during the circuit breaker from April to June 2020, public transport operators had continued to run trains and buses largely at pre-COVID frequencies, to help commuters reach their destinations safely and smoothly,” said the PTC.  

Maintaining the frequency of buses and trains, as well as enhancing cleaning routines to deal with the coronavirus outbreak, came at a “significant cost” to operators amid the drop in fare revenue, it noted. 

Former Transport Minister Khaw Boon Wan had said in May that fare revenues plunged 80 per cent during the circuit breaker period. 

This "widening gap" between operating costs and fare revenues was among the reasons why the PTC decided against reducing fares, which it had considered, said Mr Magnus. 

On Friday, the council noted that before the outbreak, the Government was expected to spend almost S$1 billion to renew and upgrade rail operating assets, and another S$1 billion to subsidise public bus services annually over the next five years. This translates to more than S$1 in subsidies for each trip taken, it added.

“With the impact of COVID-19, revenues have fallen further, and we expect Government subsidies to be even higher this year,” it said. 

READ: S$60 billion to go to expansion, renewal of rail network over next decade: Khaw Boon Wan  

MID-TERM REVIEW OF FARE FORMULA

The current fare adjustment formula, which will be in place until 2022, takes into account factors such as energy prices and inflation, as well as the Network Capacity Factor (NCF) - which compares ridership against the network capacity added. 

The council said, however, that the NCF was not designed for “exceptional circumstances” like the sustained drop in ridership due to COVID-19.

“PTC will therefore conduct a mid-term review on how NCF ought to be applied, or whether it should be partially or totally excluded, when considering its effect on next year’s fare adjustment,” it said, adding that the review would be completed before next year’s exercise. 

Pointing to developments such as the expansion of the rail network and the “significant operational subsidies” provided by the authorities, the PTC said the review is timely to ensure the fare adjustment formula remains “relevant and responsive”.

READ: Public transport fare formula to factor in growth in transport network 

In response to the PTC's decision to keep fares unchanged, SBS Transit's corporate communications vice president Tammy Tan said: "We are guided by the decision of the Public Transport Council as we weather the storm brought about by the COVID-19 pandemic together with all Singaporeans and residents.

"We have, and will continue to, look at ways to keep costs under tight control amidst these difficult times but this will not be at the expense of the safety and reliability of our systems and networks."

SMRT's chief corporate communications officer Margaret Teo said: “We stand together with Singaporeans in these challenging times as we do our utmost to provide commuters with safe, reliable and comfortable journeys.”  

CONCESSIONS REMAIN UNCHANGED

The Ministry of Transport (MOT) said separately that it has accepted the PTC’s recommendation and would also not adjust fares for low-wage workers and people with disabilities. 

Low-wage workers will continue to get up to 25 per cent off on adult fares.

Those with disabilities will continue to have their fares pegged to senior citizens, at 55 per cent of adult fares, and have the price of their monthly concession passes unchanged at S$64. 

MOT also said that the deadline to apply for public transport vouchers will be extended from Oct 31 to Jan 31 next year, allowing eligible households more time to apply for them at community centres and community clubs. 

Each voucher is worth S$50, and can be used to top up fare cards or buy monthly concession passes. Households are eligible to apply for a voucher if their monthly household income from all sources per person does not exceed S$1,200. 

About 30,000 low-income households under the ComCare Short-to-Medium-Term Assistance and Long-Term Assistance schemes will not need to apply, as they will automatically qualify for the vouchers.

These households will receive redemption letters for the vouchers in the mail. 

The first group of households - made up of beneficiaries of both schemes as of Aug 31 - will receive their letters from early December. 

The second group - recipients of both schemes as of Jan 31 who did not receive their vouchers in the previous tranche - will receive their letters from mid-March 2021. 

Source: CNA/az(gs)

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