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Rise in public transport operating costs not matched by revenue growth: Iswaran

Operating costs went up by an average of 7% a year from 2012 to 2021, said the Transport Minister.

Rise in public transport operating costs not matched by revenue growth: Iswaran
File photo of an MRT train in Singapore. (Photo: AFP/Roslan Rahman)

SINGAPORE: Between 2012 and 2021, operating costs for public transport in Singapore went up annually by an average of 7 per cent, an increase that was not matched by revenue growth, said Transport Minister S Iswaran in Parliament on Tuesday (Sep 13).

As a result, government subsidies have been increasing, he added.

The Government currently subsidises public transport services by more than S$2 billion annually, or S$1 for every journey, said Mr Iswaran. It has also committed more than S$60 billion to expand and renew the rail network over the next decade.

Mr Iswaran was responding to MP Liang Eng Hua (PAP-Bukit Panjang) who had asked how the Government determines the current annual amount of public transport subsidies, and whether it will consider reviewing this amount in light of rising costs.

Bus and train fares in Singapore went up by up to 4 cents at the end of December last year, as operating costs increased and ridership fell, the Public Transport Council said when it announced the fare hikes, the first in two years.

Mr Iswaran pointed out that pre-COVID, Singaporeans took about 8 million trips daily on public transport.

"A reliable, convenient and affordable public transport system is essential to ensuring connectivity in our densely populated city. It also boosts economic activity, reduces road congestion and emissions, contributing to sustainability and the liveability of our city," he added.

"Over the last decade, we also steadily enhanced the public transport system, with attendant increases in cost. Commuters benefitted from a 40 per cent expansion of the rail network, 80 new bus services, reduced peak hour waiting times for basic bus services from 30 to 15 minutes, as well as significant improvements in rail reliability from 67,000 to over 1 million mean kilometres between failures."

As with other subsidised services, the Government has to consider the best way to share costs between users and taxpayers - present and future - said Mr Iswaran.

He outlined three aspects to this.

Firstly, the Government will continue to fully fund the expansion of public transport infrastructure, he said, describing this as “large, lumpy expenditures”.

Secondly, it must find ways to economise and get "value for money".

“This requires a comprehensive approach – from efficient procurement by LTA (Land Transport Authority), and productivity-focused operations by public transport operators, to optimising the provision of bus and rail services even as we grow the overall network to serve new residential areas," said Mr Iswaran. "Ultimately, we have to deploy our finite resources in a manner that best serves all Singaporeans."

And finally, the Government has a fare formula to ensure that commuters pay a "fair share" of the costs, by accounting for key cost drivers for public transport – wages, energy, and inflation, said Mr Iswaran.

Last month, it was announced that a review of the formula and mechanism for adjusting public transport fares is under way, with the process likely to be completed by the first half of next year.

"We will continue to work with public transport operators to ensure judicious cost management. The fare formula is being reviewed to ensure robustness and relevance, in light of changes in the industry and commuting patterns," said Mr Iswaran.

"As we continue to expand the public transport network, and operating costs rise with inflation and other cost drivers, we will continue to seek an optimal balance between fiscal sustainability of Government spending on public transport and ensuring affordability of public transport fares, especially for the vulnerable segments of our society."

Source: CNA/mt(ac)

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