The Public Transport Council (PTC) has announced that public transport operators may increase their fares by up to 4.3 percent based on the new fare formula, which will be decided in the annual 2018 Fare Review Exercise (FRE).
It said that over the past five years, more than 1000 new buses were introduced through the Bus Service Enhancement Programme and Bus Contracting Model, and more than 200 new trains were injected to augment the public transport capacity, noting “the costs of which were borne by the Government”.
PTC added that the Government has also committed to spending $5 billion to subsidise public bus services, $4 billion to renew rail operating assets and an additional $20 billion on new public transport civil infrastructure over the next five years.
According to the council, it has reduced fares by a total of 8.3 percent for the previous three consecutive years, largely due to the continued double-digit dip in energy prices. Energy prices in 2017, which will be factored in the fare formula this year, rebounded by 26.2 percent over the previous year.
It then stated that the other macroeconomic price indices in the fare formula have also increased over the past year.
The Wage Index, a proxy for the wage growth of public transport workers like bus captains and rail staff went up by 3 percent, while the core Consumer Price Index rose by 1.5 percent, the highest increase in three years, it noted.
It then said that the Network Capacity Factor (NCF) of 3 percent balances commuter demand and public transport capacity enhancements and reflects the effort to provide commuters with more convenient and less crowded rides over the last year. More than two-thirds of the NCF was contributed by bus capacity improvements.
Based on the new fare formula which is applicable from 2018 to 2022, taking into the carry-over quantum of -3.2 percent from the 2017 FRE, PTC states that the maximum allowable
fare adjustment quantum to be considered for 2018 FRE is 4.3%. It added that the public transport operators may submit their fare applications to the PTC by 1 October 2018 for consideration.
It stressed that PTC will deliberate on these matters and announce its decision on the fare adjustment quantum in the last quarter of 2018.
“Ultimately, the PTC will continue to keep public transport fares affordable to commuters, while ensuring that the public transport system remains financially sustainable,” it added.