PTC to review public transport fare adjustment formula and mechanism

The Public Transport Council (PTC) announced that it has commenced the review of the public transport fare adjustment formula and mechanism.

The Council stated that it targets to complete it by the first quarter of 2018, and apply it starting from the 2018 annual Fare Review Exercise.

PTC noted that the terms of reference for the review are as follows:

• The PTC shall review the effectiveness of the current fare adjustment formula and mechanism, and propose improvements in consideration of the changes to the public transport industry.
• The review shall focus on maintaining a good balance in keeping public transport fares affordable while ensuring the financial viability of the public transport system.
• The PTC shall, in its review, ensure that the views of key stakeholders are adequately sought and represented.

PTC said that it will consult widely on the review and it will engage commuters, public transport operators and transport experts.

Chairman of PTC Richard Magnus wrote on the company’s website that since the current fare formula is valid for five years, from 2013 to 2017, it is now timely for the Public Transport Council to review and recommend to the Government a new fare formula and mechanism.

He stated that it will ensure that fares will remain affordable for commuters.

“We will also consider the longer-term financial viability of our public transport system. The views gathered from stakeholders will help to achieve an equitable and fine balance,” he said.

According to the Chairman, since the current fare formula was introduced in 2013, the public transport system has seen many significant changes and developments:

• The Bus Service Enhancement Programme (BSEP) has increased the bus fleet significantly, with 850 new buses and 70 new or enhanced routes;
• 42 new trains have been added to our Circle and North East MRT lines to ease crowding;
• 57 trains will be added to our North-South and East-West Lines up till 2019; and
• The rail system network will increase from 200km now to 360km in 2030

Mr Richard stated that these changes have resulted in service improvements. Ridership has also grown and bus services have become less crowded. The number of crowded services had fallen by 85% since the inception of the BSEP.

“The trains have also become more reliable,” he said.

The Chairman also said that Mean Kilometre Between Failure (MKBF) – a key measurement of how far trains across our network travel before encountering a delay of more than 5 minutes – has improved two-fold from 58,000 train-km in 2011 to 174,000 train-km in 2016.

“Our feedback shows that these changes and service improvements have benefitted commuters,” he added.

Mr Richard then added that the Government is bearing the cost of improvements to the public transport system through the Bus Contracting Model (BCM) and the New Rail Financing Framework (NRFF).

He said that the Government expects to spend close to $ 4 billion over the next 5 years to subsidise public bus services and another $4 billion over the next 5 years on replacing rail assets on top of about $20 billion that the Government is already spending to build new public transport infrastructure.

The Chairman stated that service improvements come at a cost. Therefore, there will need to be equitable cost sharing among commuters, taxpayers and public transport operators.

Just last year, it was reported that the PTC implemented a simplified fare structure and the reduction of bus and rail fares. Based on the previous distance-based fare structure, adult card fares was lowered by 1 to 27 cents. Senior citizens’ concessionary card fares was reduced by 1 to 7 cents, while student concessionary card fares was reduced by 1 cent.