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No increase in public transport fares this year given the effects of Covid-19: PTC

SINGAPORE — Despite an allowable increase this year, public transport fares will remain unchanged in a bid to help commuters mitigate the impact of the Covid-19 pandemic, said the Public Transport Council (PTC) on Friday (Sept 4).

The decision by the PTC means that commuters will see no change to their bus and train fares till the fare review exercise next year, with the allowable increase rolled over.

The decision by the PTC means that commuters will see no change to their bus and train fares till the fare review exercise next year, with the allowable increase rolled over.

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  • The allowable increase of 4.4 per cent will be rolled over to next year. 

  • There will be a mid-term review of the network capacity factor — a component in the fare formula — which has been significantly affected by fall in ridership

  • It is likely that there will also be no fare increase next year if Covid-19 persists 

 

SINGAPORE — Despite an allowable increase this year, public transport fares will remain unchanged in a bid to help commuters mitigate the impact of the Covid-19 pandemic, said the Public Transport Council (PTC) on Friday (Sept 4). 

And if the economic fallout from Covid-19 continues into next year, the PTC said it is unlikely that fares will increase in 2021 as well. 

At a virtual press conference to announce the outcome of the council’s annual review exercise, PTC chairman Richard Magnus said: “The council recognises the exceptional circumstance faced by Singaporeans, and has considered the impact on public transport commuters.

“The council has therefore decided not to adjust fares to ease the burden on commuters.” 

This means that commuters will see no change to their bus and train fares till the fare review exercise next year, with the allowable increase rolled over. 

Last year, transport fares increased by 7 per cent.

Based on the fare review formula, the maximum allowable adjustment to public transport fares this year is 4.4 per cent. 

The formula takes into account energy prices, inflation and manpower costs, and since 2018 has included a network capacity factor (NCF). 

The growth in the NCF — which compares how much the public transport network is utilised against the capacity of the network — has also been significantly affected by the “sharp and sustained drop” in ridership due to Covid-19, said the PTC. 

While the NCF was 1.6 per cent last year, it has risen to 3.9 per cent this year, which means less of the transport network was utilised. 

As such, the PTC will do a mid-term review on whether this factor will be partially or totally excluded in the fare formula next year.

“This mid-term review is therefore timely to ensure that fare adjustment formula remains relevant and responsive,” it said. 

Asked by TODAY if the fare increases will still be rolled over to 2021 should the economic damage wrought by the pandemic extend to the next fare review, Mr Magnus said that fare increases will be unlikely in such a scenario. 

He said that components in the fare formula, such as oil prices, the consumer price index and the wage index, will all see a drop if the economy continues to falter. 

“I would expect that with all these macro indices factors that will go down, the fare we consider at that point in time…  I doubt very much that we'll see a fare increase (next year) because (we will see a) position not unlike this current year's position,” he said. 

IMPACT ON PUBLIC TRANSPORT OPERATORS

The PTC said that the decision not to grant a fare increase this year was made even though the pandemic has significantly affected public transport operators, and it expects government subsidies to increase as a result. 

Prior to the pandemic, the Government was expected to spend close to S$1 billion to renew and upgrade rail operations and another S$1 billion to subsidise public bus services annually over the next five years. This had already translated to S$1 in subsidies for every journey taken. 

The rail network has also been expanding, with the Government providing significant operational subsidies to sustain the public transport network.

“With the impact of Covid-19, revenues have fallen further, and we expect government subsidies to be even higher this year,” the PTC said. 

When asked by the media whether a continued increase in subsidies is unsustainable, Mr Magnus said that the PTC will continue to review the fare formula,starting with the mid-term review of the NCF. 

PTC chief executive Tan Kim Hong, who was also at the press conference, said that less ridership does not necessarily imply an unsustainable system. 

He said that current trends show that people are “shifting away from the peak”. And if demand flattens from the peak, this means transport operators need not run their trains or buses at peak capacity. 

“There is an opportunity where the supply can adjust much better to the demand such that they run at lower frequencies (compared to) the peak,” said Mr Tan. “Overall, the NCF, in terms of cost efficiency, will be much better,” said Mr Tan. 

While an adjustment in frequencies could ease the pain of transport operators, the PTC pointed out that the operators continued to run buses and trains at around the same frequency as they did before the pandemic. 

This is despite a fall in whole-day ridership by around 75 per cent during the circuit breaker from April to June 2020, it said. 

Public transport operators had also stepped up their cleaning regimes and that all these measures come at a “significant cost”, it added. 

Commenting on the review, Transport Minister Ong Ye Kung said in a Facebook post that the council had taken a "bold but right step" by freezing bus and train fares due to this being an exceptional year. This is despite fare revenue falling "very short" of operating costs of public transport.

Responding to queries from TODAY, public transport operators SMRT Trains and SBS Transit said they would continue providing reliable services despite losses in revenue.

“We have, and will continue to, look at ways to keep costs under tight control amid these difficult times but this will not be at the expense of the safety and reliability of our systems and networks,” said senior vice president of corporate communications at SBS Transit Tammy Tan.

Chief communication officer of SMRT Corporation Margaret Teo said that it has noted the PTC’s decision and “stands together with Singaporeans in these challenging times as we do our utmost to provide commuters with safe, reliable and comfortable journeys”.

TODAY has also asked the Land Transport Authority, which collects bus fare revenues under its bus contracting model, about whether the decision by the PTC will result in further deficits to bus operations.

CONTINUED SUPPORT FOR LOWER-INCOME HOUSEHOLDS

While there will be no fare increase, the PTC said that support for lower-income households will continue. 

The Government will extend the application deadline for the 2019 Public Transport Voucher from Oct 31 to Jan 31 next year to give eligible households more time to apply for the vouchers. 

Last year, 450,000 of such vouchers worth S$50 each were made available.

To further mitigate the impact of the economic downturn this year, around 30,000 low-income households under the ComCare assistance schemes will also progressively receive the transport vouchers without having to apply for them.

Related topics

public transport fare Covid-19 coronavirus

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