Public transport fare hike: Adults to pay 10 to 11 cents more per journey from Dec 23
The Public Transport Council, which regulates bus and train fares, has granted an overall increase of 7 per cent as part of the 2023 fare review exercise.
SINGAPORE: The latest bus and train fare increases will more than double from last year's hike, which means adult commuters will pay 10 to 11 cents more per journey, the Public Transport Council (PTC) said on Monday (Sep 18).
The PTC, which is the Singapore regulator for public transport fares, announced an overall fare increase of 7 per cent following the annual fare review exercise. The fare hikes will take effect on Dec 23.
The trend of sharper increases could potentially continue with the PTC again deferring a bulk of the fare adjustment quantum to future fare review exercises.
This year's fare review exercise is the first under the new formula announced in April, which the PTC had said was aimed at keeping fares affordable and less volatile. As part of the review - conducted every five years - the fare formula was adjusted to include two fixed components to reduce swings in fare changes.
Adult card fares will increase by 10 cents for up to 4.2km and 11 cents for distances above that, while adult cash fares - used for bus rides - will increase by 20 cents. Adult monthly travel passes will remain at S$128.
The 11-cent increase is the highest, according to the PTC, which pointed out that 2019 also saw a 7 per cent increase in fares, but from a lower base.
A lower increase will be implemented for concession card fares for students, seniors, low-wage workers and people with disabilities. Fares in this category will go up by 4 to 5 cents per journey, depending on the distance travelled. Concessionary cash fares for bus rides will increase by 10 cents.
In all, commuters with concessions account for about two million, or half of Singaporeans.
Heavy public transport users who belong to concessionary groups, such as students, seniors, and full-time National Servicemen, will see prices of hybrid monthly concession passes reduced by up to 10 per cent.
The price of monthly concession passes for people with disabilities will be reduced from S$64 to S$58, similar to that of seniors.
Lower-wage workers will be able to use a new workfare transport hybrid monthly concession pass priced at S$96.
Changes to monthly concession passes will benefit about 60,000 existing and expected new monthly pass holders. Existing hybrid monthly pass holders will save up to S$9.50 per month.
According to the PTC, after accounting for this year's fare and wage increases, the burden of public transport expenditure on monthly household income for certain groups is expected to remain similar to last year.
In 2022, the second decile income group households - those in the 11th to 20th percentile, or the lower-income households - spent 2.4 per cent of their monthly household income on public transport on average. The second quintile income group households - those in the 21st to 40th percentile - spent 1.7 per cent.
Why are bus and train fares going up? Listen to Daily Cuts:
The latest bus and train fare increases will more than double from last year's hike, which means adult commuters will pay 10 to 11 cents more per journey, the Public Transport Council (PTC) said on Monday (Sep 18).
The overall fare adjustment of 7 per cent will translate to an increase in fare revenue of around S$137.4 million a year. Public transport operators SBS Transit and SMRT Trains will see an increase in annual revenue of S$20.9 million and S$42.4 million respectively, with the government continuing to provide more than S$2 billion in operating subsidies annually across bus and rail.
In tandem with the higher fare increase, the PTC will require SBS Transit and SMRT Trains to make a larger contribution towards the Public Transport Fund. For this year, SBS Transit and SMRT Trains should contribute 15 per cent and 30 per cent of their expected increase in revenue respectively to the fund. This will come up to a total of S$15.85 million.
The PTC has recommended that the government draw on the fund to provide further assistance to the lower-income resident households in the form of public transport vouchers.
S$50 public transport vouchers for lower-income households
The public transport vouchers are to help lower-income households cope with the fare increase, the Ministry of Transport and People's Association said in a joint release on Monday.
Each voucher will be worth S$50 and can be used to top up fare cards or buy monthly passes.
This year's public transport voucher exercise will continue to cover resident households with a monthly household income per person of not more than S$1,600.
The exercise will be conducted in two stages, similar to 2022's exercise.
In the first stage, households that received a voucher during the 2022 exercise and continue to meet the income eligibility criteria will automatically receive a notification letter for the public transport voucher. These households need not submit a new application for this year's exercise. Notification letter will be sent to eligible households by the end of December.
In the second stage, which starts from early 2024, households that meet the eligibility criteria, but did not receive a voucher in the first stage can apply for the vouchers at community centres or online. Details will come later.
Notification letters will contain instructions on how to redeem the vouchers. Vouchers for this year's exercise will be valid until Mar 31, 2025.
BULK OF FARE ADJUSTMENT DEFERRED TO FUTURE EXERCISES
The fare increase for the fare review exercise 2022 was 2.9 per cent, with adult card fares increasing by 4 to 5 cents per journey.
This year's increase of 7 per cent is only a portion of the maximum allowable fare adjustment quantum of 22.6 per cent, comprising of last year's deferred increase of 10.6 per cent and this year's 12 per cent.
Both SBS Transit and SMRT Trains had applied for the maximum fare adjustment of 22.6 per cent citing cost pressures and the slow recovery of ridership, among other challenges.
PTC chair Janet Ang said that the council had decided not to grant the full allowable fare adjustment of 22.6 per cent to keep public transport fares affordable in the higher cost environment, fuelled by core inflation, strong wage growth, and a hike in energy prices.
The increase of 7 per cent means that the remaining 15.6 per cent will be deferred to future fare review exercises.
"If we had done the full maximum allowable fare increase of 22.6 per cent, it will translate to about 30 cents per journey for all commuters," PTC chief executive Tan Kim Hong told reporters at a press conference on Monday.
Asked if the rolled-over numbers indicated more fare hikes in the next few years, Mr Tan said: "Yes."
He added: "What is important is over the next few years - how does the council then decide what is the number that we should put up where by it still balances both the commuters and the taxpayers?"
The council was also asked what the maximum allowable increase would have been if the old fare formula from 2018 to 2022 had been applied.
Mr Tan replied that the old formula should not be used due to the current operating environment, which has changed.
"The formula itself has been updated this year to reflect the latest operating environment.
"You should not look back into the past formula, because the past formula itself was designed based on the operating environment, which has changed drastically."
For example, Mr Tan said ridership has yet to recover to pre-pandemic levels, which would have affected the capacity component - known as the network capacity factor - of the old formula. The network capacity factor tracks operating costs due to network capacity changes relative to ridership.
It has been replaced by a capacity adjustment factor in the new formula, and has been fixed at 1.1 per cent for the next five years to reduce variability resulting from capacity and ridership changes.
Reiterating Mr Tan's point, Ms Ang said: "If you really go and calculate based on the old formula, the number will be out of the chart. Therefore, it validates again that the new fare formula law is intended to reduce the volatility of fare increases for commuters."
To cover the deferred fare adjustment quantum, the PTC requested that the government provide an additional subsidy of about S$300 million for this year's fare review exercise - higher than the S$200 million provided after last year's fare review exercise. The government has agreed to this subsidy, said PTC.
In response to CNA, SBS Transit spokesperson Grace Wu said the operator had applied for a fare adjustment to help mitigate cost pressures faced in rail operations.
"We remain committed to keeping costs under tight control through higher productivity while ensuring the safety and reliability of our systems and networks are not compromised," Mrs Wu said.
Adding that it was aware of the potential effect on low-income families, SBS Transit said it would be contributing SS$3.14 million to the Public Transport Fund.
SMRT Trains president Lam Sheau Kai said the fare adjustments would help to alleviate the financial pressures from lower ridership, rising energy and wage costs and global inflation.
"As stewards of Singapore's MRT system, we continue to drive productivity, exercise prudence and leverage technology to provide safe, reliable, commuter-centred, and affordable journeys," said Mr Lam.