‘Financially ailing’ bus sector to benefit more from fare hikes

SINGAPORE — More revenue from the transport fare hike will be channelled towards public bus operations than those of MRT trains — a move in line with the Fare Review Mechanism Committee’s recommendation to allow more fare revenue to benefit the “financially ailing” bus sector, said the Public Transport Council (PTC) yesterday.

Bus operations will receive a S$48 million boost from the hike, while S$5.5 million will be allocated to MRT operations, under a new weightage in revenue allocation applied by the PTC.

With the 3.2 per cent fare rise, SBS Transit and SMRT will see an annual increase in revenue of S$36 million and S$17.5 million respectively.

The revenue gains exclude the money to be set aside by operators for the Public Transport Fund, aimed at helping needy commuters cope with fare hikes. After considering operators’ financial situation, the PTC decided that SMRT and SBS Transit should contribute 25 per cent (S$4.3 million) and 20 per cent (S$7.2 million) of the increased fare revenue respectively.

Both operators had applied for the full fare hike of 6.6 per cent allowed under the fare-adjustment formula, citing losses in their bus business for the past few years.

SMRT informed the PTC of a 29 per cent rise in its operating costs in the areas of manpower, energy and repairs and maintenance. SMRT’s profit in the train business was also weighed down by rising costs, maintaining the ageing MRT network and expenditure on mid-life refurbishment.

SBS Transit cited declining financial performance in the rail sector due to rising costs for the North-East Line and start-up costs for the Downtown Line. In response to the PTC’s announcements yesterday, SBS Transit CEO Gan Juay Kiat said operating costs have risen significantly in the last three years and the latest fare increase would help alleviate some of these cost pressures.

“While we have tried to mitigate this increase with productivity improvements, costs such as (those relating to) manpower, repairs and maintenance have continued to rise,” said Mr Gan.

SMRT, meanwhile, said the council has attempted to strike a balance between maintaining public affordability and helping to manage increased operational costs. Xue Jianyue