SBS Transit reported on Wednesday that their profits in the second quarter of the year (the period ending 30 June) was 22.8% higher than it had been during the same period in the previous year.
Profits in Q2 came in at $6.09 million, due to an increase in revenue because of higher daily ridership and average fares. The operating profit for SBS’ buses had risen by 82.9% to $7.5 million, with the increased revenue and lower fuel costs offsetting an increase in staff costs as well as repairs and maintenance.
However, the operating profit of the rail business fell from $2.6 million to $1.2 million in the second quarter, as the company had to meet higher staff costs for the second stage of the Downtown Line.
The company expects their revenue will continue to grow with increasing daily ridership and fares, but noted higher financing costs and depreciation with the renewal and expansion of their bus fleet.
But SBS Transit has not had to foot the entire bill for the expansion of their bus fleet. In 2012 the government pledged to spend $1.1 billion over the next 10 years to buy new buses for SBS Transit and SMRT. Under the Bus Services Enhancement Programme (BSEP) first announced in 2012, the government has since paid for 550 buses rolled out at the end of 2014. A total of 1,000 government-funded buses are expected to be injected into the network by 2017.
A system of incentives and penalties was also implemented by the government to encourage public transport operators such as SBS Transit and SMRT to improve their service and reduce waiting times. Based on how the Excess Wait Time (EWT) is reduced or increased, transport operators can earn incentives or be fined penalties.
The Land Transport Authority, SBS Transit and SMRT said in a joint news release dated 9 April 2015 that SBS Transit had earned $710,285.71 for its improvements in 11 services, while SMRT earned $345,714.29 for its improvements in seven services during the first assessment period from June to November 2014.
“There were no penalties deducted from both operators for this assessment period as none of their services had deteriorated more than 0.1 minutes to fall into the penalty zone. The incentives will help to offset the costs incurred by the PTOs to hire the additional service controllers to support the [Bus Service Reliability Framework],” said the statement.
Transport fares are also set to drop, with Transport Minister Lui Tuck Yew telling the press earlier this month that there will be a reduction by about 1.9% by the end of the year.