By Andrew Loh
The Public Transport Council (PTC) has given public transport operators until August 2007 to apply for any fare revisions they wish to make. (Straits Times, Mar 23, 2007).
Any fare hike will take effect from October, according to a PTC spokesman quoted by the Straits Times.
Undoubtedly, any increase in fares will have commuters up in arms, as was the case in previous years. Any rise in transport fares will come on the back of an increase in the Goods and Services Tax (GST), and the Consumer Price Index (CPI).
Consumer Price Index
The Department of Statistics, in its press release on the CPI for May 2007, said:
“Compared with the same month a year ago, the consumer price index in May 2007 was 1.0 per cent higher.”
For the CPI in June, the TODAY newspaper reported:
“The consumer price index (for June) rose 1.3 per cent from a year earlier… Transport and communication costs, the second-biggest component at 22% of the index, climbed 2.8% last month from a year earlier.”
The CPI is used in the formula by the PTC to determine how much any fare increase will be, as posted on its website:
Maximum Fare Adjustment = 0.5 CPI + 0.5 WI – 0.3%
CPI = Change in Consumer Price Index over the preceding year, WI = Change in Average Monthly Earnings (Annual National Average) over the preceding year, adjusted to account for any change in the employer’s CPF contribution rate , 0.3% = The productivity extraction based on a sharing of productivity gains achieved by PTOs
A chronology of fare hikes since 1990 (PTC website):
1990: BUS FARE REVISION
- 10 cents increase in non air-con fares generally.
- 5 to 10 cents increase in air-con fares with no change to the minimum (60 cents) and maximum fares ($1.20).
1994: BUS FARE REVISION
- Extension of the maximum bus fare by another fare stage (over 14.4 km), to $1.00 and $1.30 for non air-con and air-con services respectively (equivalent to a 10 cents increase)
1995 : BUS FARE REVISION
- Extension of the maximum bus fare by another fare stage (over 18.4 km) to $1.10 and $1.40 for non air-con and air-con services respectively (equivalent to a 10 cents increase).
- 5 cents increase in feeder fares and industrial fares to 30 cents and 45 cents respectively, with the corresponding introduction of a 5 cents transfer rebate for feeder buses.
- $2 increase in concession stamps prices for tertiary students, NS men and SBS shareholders.
1997 : BUS FARE REVISION
- 5 cents increase across the board for non air-con services on farecard fares. No change for air-con farecard fares.
- 10 cents increase across the board for air-con and non air-con services on cash fares.
- Conversion of flat fare to distance-related fares for industrial bus services.
- $3- $5 increase in non air-con bus concession stamp prices.
1999 : NEW FARES FOR BUKIT PANJANG LRT
Similar to fares on existing RTS lines, distance-related fares were adopted for Bukit Panjang LRT.
2000: BUS FARE REVISION
- 10 cents increase in adult feeder bus fares (cash and farecard) with a corresponding increase in the feeder transfer rebate by 10 cents (from 5 cents to 15 cents).
- 5 cents increase in child/student feeder bus fares (cash and farecard) with a 10 cents increase in the feeder transfer rebate (from 5 cents to 15 cents).
- Extension of the maximum fare by another fare band (over 23.5 km) to $1.30 and $1.60 for non air-con and air-con services respectively for cash fares, and $1.25 and $1.50 for non air-con and air-con services respectively for farecard fares.
- Addition of 2 fare bands to the fare structure of Jurong industrial bus services (maximum fare was increased by 20 cents).
2000: LIGHT RAPID TRANSIT (LRT) SINGLE TRIP FARE
10 cents increase in the LRT Single Trip Ticket adult fares (the new minimum became 80 cents while new maximum was $1.00). No change in adult farecard fares (minimum was 60 cents and maximum was 80 cents).
2001 : BUS FARE REVISION
- 10 cents increase in feeder bus fares with corresponding increase in transfer rebates by 10 cents (feeder bus transfer rebate became 25 cents, the same as the transfer rebate involving non-feeder bus services).
2002: BUS FARE REVISION
- 3 cents increase in adult EZ-link card fares.
- 5 cents increase in adult farecard fares.
- 10 cents increase in adult cash fares.
- 50 cents increase in concession stamp prices for primary/secondary students.
- $2 increase in concession stamp prices for tertiary students.
- $3 increase in concession stamp prices for NS men.
2003: NEW FARES FOR NORTH EAST LINE (NEL)
- Differentiated fares for the NEL at 5 cents to 25 cents higher than the existing RTS fares, or an average of 16.5 cents more.
- Fares for child/student/NS men concessions remained the same as that for the existing RTS lines.
2005 : BUS FARE REVISION
- 1-2 cents increase in adult EZ-link card fares.
- 10 cents increase in adult cash fares.
- 1 cent increase in senior citizen EZ-Link card fares and 10 cents increase in senior citizen cash fares.
2006 : BUS FARE REVISION
- 1-3 cents increase in adult EZ-link card fares.
- 1 cent increase in senior citizen EZ-Link card fares.
From 2000 to 2006, fare revisions were carried out every year except for 2004.
If the PTC approves a fare hike this year, it would make it the 7th hike in 8 years!
The main point of unhappiness – if any hike were approved – perhaps, will be the profits that the transport operators are making.
The SMRT has announced a profit after tax of $135.8m for financial year 2007, an increase of 31% from the previous year. (Link)
In the years 2003 to 2007, SMRT’s profit after tax are as follows:
2007 = $135.8m
2006 = $103.6m
2005 = $126.6m
2004 = $90.2m
2003 = $72.2m
For SBS Transit, its profit after tax for the years 2003 to 2006 are as follows (obtained from its website):
2006 = $56.1m
2005 = $51.5m
2004 = $49.2m
2003 = $19m
Questions raised again
Singaporeans will again be asking: Should public transport providers be seeking ever more profits? How much is enough?
It seems that there is a revision of fares every other year and the transport companies are making good profits. SMRT’s profits have almost doubled from 2003 to 2007 while SBS Transit has more than doubled its profits from 2003 to 2006.
Will the PTC approve any application in fare hike this year?
The following weeks will provide the answers to these questions.
Theonlinecitizen will be featuring a few articles on public transport in the coming days.
If you wish to have your say, or to share your experiences using public transport, please do write to us at [email protected]
*Update: SMRT Q1 profit rises 38.5% to $37.94m – SMRT website, media release, 27 July 2007. Visit the SMRT website “Announcement” page for more details on the 1Q FY2008 results.
*SMRT Buses has a fleet of 800 buses. SMRT also operates the main MRT line and the LRT in Bukit Panjang. (Link)
**SBS Transit owns 75% of the scheduled bus market share in Singapore with 217 bus services and has a total fleet of more than 2,700 buses. It also runs the NEL MRT line and the LRT in Sengkang and Punggol. (Link)
Read also Singapore Alternative’s “Crutch Mentality Of Public Transport ”:
“The demand of regular fare hike is a crutch mentality in the making. There are really many other ways that public transport companies in Singapore could make profits, not just from fare but from their strength in convenience and the masses they command. If we continue to allow other GLCs or SLF to develop prime areas in towns instead of the transport companies, how could there possibly be full utilization of resources and cross subsidies to public transportation companies?”