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Thu, Jul 17, 2008
The Straits Times
Is the increase in school bus fares anti-competitive?

By Yeo Ghim Lay

THE country's competition watchdog is looking into a recent decision by hundreds of school bus operators to raise fares.

The Competition Commission of Singapore (CCS) said yesterday that it has contacted the Singapore School Transport Association (SSTA) that proposed the hike.

The move comes amid concerns that the increase, which was announced last Saturday, might be anti-competitive.

SSTA, which represents more than 900 school bus operators, has proposed charging parents an extra $10 to $15 a month to ferry children to and from school. The increase is designed to cover surging diesel prices.

But Consumers Association of Singapore (Case) executive director Seah Seng Choon said yesterday that the move could breach competition laws, which forbid practices like price-fixing.

'We're concerned about this. The association should not have announced a quantum publicly. They should leave their members to decide how much they want to charge,' Mr Seah told The Straits Times, adding that he wants to see what the CCS will do.

The commission has the power to investigate anti-competitive practices and fine companies if they are found guilty.

Bus operators are the latest to feel the pinch from rising diesel prices, which have jumped by 60 per cent so far this year.

Last week, the country's biggest taxi company, ComfortDelGro, announced that it will start imposing a 30-cent fuel levy per taxi trip.

Meanwhile, parents - some of whom saw prices jump earlier this year - are bracing themselves for the bus fare increases.

'I understand that fuel prices are not within anyone's control but if prices come down, will fees come down as well?' asked Ms Joanna Ong, 38, whose eight-year-old son takes a school bus.

Parents usually pay between $35 and $200 a month, depending on the distance, to send a child to school on a privately owned bus.

SSTA chairman Wong Ann Lin said the $10 to $15 levy is a guideline and members can decide whether to raise prices or not.

However, he expects about 80 per cent of operators to embrace it.

A check with eight operators found that five plan to raise their prices soon, with increases ranging from $3 to $15.

While some bus operators have just a single coach, others are bigger companies with dozens of buses.

Mr Lionel Lim, the owner of Bedok Transport, said he will raise fees by $3 to $5 and might adjust prices again early next year.

'Usually we increase fees at the start of a new year. But the situation is so bad that we have to do it now,' said Mr Lim, who has a fleet of more than 70 buses.

Fellow school bus operator Ng Beng Tuan said he also intends to raise his fees by $5 to $10, up from the current $35 to $160.

'We raised it by $5 early this year but it wasn't enough to cover the diesel price hikes,' said Mr Ng, who runs a fleet of four buses.

Mr Wong said his group will meet Case soon, and expressed regret that it had not discussed the fare hike with the consumer watchdog.

'We should have spoken to them because they have helped us a lot in the past.

'But with diesel prices steadily rising, there is a lot of pressure for something to be done,' he said.

This article was first published in The Straits Times on July 15, 2008.


 
 
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