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Post-circuit breaker, public transport firms could cut capacity, operating hours to ease financial stress: Experts

SINGAPORE — With restrictions on economic and social activities to be eased over three phases, financially strained public transport operators and the authorities could adopt different measures during each phase to alleviate the firms' predicament, transport analysts said.

Post-circuit breaker, public transport firms could cut capacity, operating hours to ease financial stress: Experts

Bishan MRT Station on May 19, 2020. Experts proposed that train operators could cut operating hours by pushing last train timings forward, in order to cut costs.

SINGAPORE — With restrictions on economic and social activities to be eased over three phases, financially strained public transport operators and the authorities could adopt different measures during each phase to alleviate the firms' predicament, transport analysts said.

This could mean a reduction in capacity and operating hours as telecommuting and staggered work and school hours become the norm, and some people switch to taxis or private-hire cars to avoid taking buses or trains. There could possibly even be fare hikes when the economy has improved.

Transport Minister Khaw Boon Wan said earlier this month that fare revenues had dropped by about 80 per cent due to reduced demand for public transport, which put a significant financial strain on transport operators.

Analysts said that in the first phase, when safe distancing is paramount, the operators will have no choice but to stomach the losses and keep trains and buses running.

In the second phase, operating hours for buses and trains could be cut, as the staggering of work and school hours are likely to result in reduced peak-hour congestion.

In the longer term, or in the third phase, more austere measures such as the levying of special taxes on businesses near public transport nodes or raising of fares could take place, they said.

PHASE ONE: ‘NO OTHER WAY’ BUT TO LOSE REVENUE

For now, the analysts said that there is “no magic solution” other than to spend money on running transport at higher frequencies.

The authorities had in mid-April tried to reduce train frequencies as a response to the drop in demand. This resulted in overcrowded trains, forcing them to revert to original frequencies on April 17.

Keeping it this way will result in substantial losses and this is expected to last through Phase One.

Dr Walter Theseira, a transport economist at the Singapore University of Social Sciences (SUSS), noted that offering incentives such as giving commuters discounts to travel off-peak or getting companies to adopt flexi-work hours had only made a “marginal improvement, shifting a few percentage points here and there”.

Dr Terence Fan from the Singapore Management University said that even if certain bus routes had their frequencies reduced, such as those that serve only an industrial estate housing non-essential service providers, for instance, the impact on cost will be minute. 

However, the spending has to go on. Dr Park Byung Joon, who does urban transport research at SUSS, said: “We don’t want to go back to having 30 (community) cases… It’s very damaging, and will be even more expensive (than financing transport).” 

PHASE TWO: SHORTER OPERATING HOURS

The experts were not short on recommendations on what could be done in the medium term — or Phase Two — which may last several months and will give the authorities the “bandwidth” for innovation.

One way to reduce overheads would be for buses and trains to reduce operating hours by pushing last train timings forward. This is bearing in mind that most late-night entertainment venues such as cinemas, bars and karaoke lounges will likely remain closed in the foreseeable future.

Besides, alternative modes of transport, such as taxis or private-hire vehicles, might become more popular options for commuters looking to avoid the crowds.

Transport engineering consultant Gopinath Menon noted that when Covid-19 was emerging in February here, “many parents drove their children to school, even shunning group transport such as school buses”.

The experts believe that the staggering of work and school hours, which is set to be implemented by the authorities over the course of Phase One and into the conceivable future, will reduce peak-hour congestion.

Beyond staggering arrival and dismissal times for primary and secondary schools, the authorities could consider reintroducing the largely defunct arrangement of morning and afternoon sessions for primary schools, Dr Fan said.

Agreeing, Dr Park said that for workplaces, the Government could also introduce a law or guideline to ensure employers allocate strict check-in and check-out timings to employees.

However, to achieve this will require the “coordination between the national policies”, for example, between staggered work hours and public transport operations, Dr Theseira said.

“Without coordination, we run the risk of over-providing services at great cost, or worse, under-providing and forcing passengers to be dangerously close or wait a long time for a less crowded train or bus,” he added.

PHASE THREE: CHANGES IN THE LONG TERM

During Phase Three, the experts said that transport fares could be raised when the economy is on the mend and the pinch will not be as great for commuters.

Dr Theseira, who is also a Nominated Member of Parliament, suggested having a combination of fare adjustments and capacity cuts.

“The fare adjustments would likely reflect the excess capacity — which, in a way, means that passengers are paying for better quality rides — and capacity cuts would save money overall.”

However, the authorities cannot do this by sticking to the fare formula, as it does not account for safe distancing, the analysts said.

Another possible solution lies in taxing those that benefit the most from public transport, by levying a special tax on employers who are located near public transport stations.

“The idea there, is that employers are the ones who benefit from having public transport connectivity, so they should pay,” Dr Theseira said.

However, these measures could come into effect only when the economy begins to recover, which could be as early as next year.

Mr Menon said: “We are still in crisis mode, and (fares) are likely to be kept constant due to (the state of) the economy.”

When fares do increase, the Government will have to “relay the message” that the costs will be shared between themselves, the transport operators and the commuters, he added.

The authorities will also have to make the announcement themselves, rather than delegate the task to the transport operators.

If they do not, it will “inevitably create the impression that the company is doing so merely to raise profits”, Dr Theseira said.

Larger changes to the financing model for transport may have to be considered if deficits persist.

While bus services are fully contracted by the Government, rail operators share risks and profits.

“It doesn’t make sense for (rail operators) to assume responsibility for bearing and managing society-wide risks like Covid-19”, Dr Theseira said.

“We may have to go to contracting for both trains and buses if it looks like operating deficits could become a permanent feature.”

Related topics

Covid-19 coronavirus circuit breaker public transport safe distancing loss

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