Transport Minister Khaw Boon Wan said during Committee of Supply debate on the Transport Ministry’s budget on Wednesday (8 March) that commuters should be ‘understanding’ when fares were to be adjusted upwards.
He said that this is because taxpayers have been increasingly subsidising the higher operating costs of the public transport network, stressing that this is a situation that is not sustainable going forward.
He told the Parliament that Public Transport Council (PTC) will be reviewing the fare formula which will expire after this year’s fare exercise.
However, Mr Khaw noted that the PTC cannot always bring good news, saying, “Sometimes they have to adjust fares upwards. And when they do, I hope commuters will be understanding.”
The Minister then laid out the projected higher investment and expenditures for the public transportation network in the years ahead.
He stated that the Government expects to subsidise public bus services by some S$3.5 to S$4 billion over the next five years under the new Bus Contracting Model, where it is responsible for buying and replacing buses. said, is not sufficient to cover operating costs, which incurs a huge deficit.
“As fares have not kept up with rising costs, taxpayers have to subsidise more and more of the operation costs, especially as we have been raising service standards significantly,” he said.
The Minister then said that fare revenue is not sufficient to cover operating costs, which incurs a huge deficit. As fares have not kept up with rising costs, taxpayers have to subsidise more and more of the operation costs, especially as we have been raising service standards significantly,” he said.
He stated that as fares have not kept up with rising costs, taxpayers have to subsidise more and more of the operation costs, especially as the Government has been raising service standards significantly.
Mr Khaw then added that the Government is also expected to spend S$4 billion on replacing rail assets under the transition to the New Rail Financing Framework, on top of the S$20 billion it is spending on building new public transport infrastructure.
Taxpayers were funding the construction of transport infrastructure and commuters bore the operating costs through transport fares in the past. that is not sustainable given the rising costs.
However, he noted that it is not sustainable given the rising costs.
The Minister then added that although the Government will continue subsidising public transport heavily, in the long term, a balance must be found for the fiscal burden to be borne by commuters, taxpayers and operators.
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