PTC begins review of public transport fare formula

The Public Transport Council (PTC) has begun a review of the formula it uses to adjust bus and train fares.

The review will assess "the effectiveness of the current fare adjustment formula and mechanism and propose improvements in consideration of the changes to the public transport industry", the council said in a statement yesterday.

It will also "focus on maintaining a good balance in keeping public transport fares affordable while ensuring the financial viability of the public transport system".

PTC chairman Richard Magnus said in a blog post that the council will consult and engage commuters, public transport operators, experts and other stakeholders.

He highlighted that the Government has taken over ownership of bus and rail assets and is now "bearing the cost of improvements" to the public transport system.

"Service improvements come at a cost. There will need to be equitable cost-sharing among commuters, taxpayers and public transport operators," he said.

The PTC aims to complete the review by the first quarter of next year and apply the new formula starting from that year's fare review exercise.

The current formula, which has been used since 2013 and takes into account changes in the inflation rate, wages and an energy index that charts oil and electricity costs, will be used for this year's fare adjustment exercise.

Last month, Transport Minister Khaw Boon Wan told Parliament that it was not sustainable for taxpayers to increasingly subsidise the costs of running Singapore's public transport system.

He said the Government expects to subsidise public bus services by almost $4 billion over the next five years, and while fare revenue goes to the Government under the new Bus Contracting Model, it is not enough to cover operating costs.

A further $4 billion is needed to replace ageing rail assets in the same period, and another $20 billion for new public transport infrastructure, he said.

Transport economist Michael Li, who is associate professor at Nanyang Technological University, told The New Paper that any fare increase is unlikely to be significant, or it could lead to a public outcry.

Singapore Management University Assistant Professor Terence Fan, who specialises in transport, said: "The PTC needs to consider whether this would be a one-off adjustment, or whether there would be a review every time costs go up."

Prof Li said revenue from the fare increase should be channelled to operational needs and keeping public transport sustainable, and that public transport should adopt a revenue-neutral model.

He also suggested that public transport operators come up with tools to measure customer service satisfaction that can be linked back to operational details. Waiting times, for example, are related to scheduling efficiency, he said.

Prof Fan said that while measurement tools could help improve accountability, it is important they are airtight and efficient.

rloh@sph.com.sg

This article was first published on April 6, 2017.
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