Why increase transport fares by the highest ever in history?
I refer to the article “Bus and train fares to rise by 6 cents per trip from Dec 29: PTC” (Straits Times, Oct 30).
Straits Times reported that new component to the fare adjustment formula - the Network Capacity Factor (NCF) - which took into account the additional buses pumped into the network last year and the first stage of the Downtown MRT line, contributed 3 percentage points to a 7.5 per cent increase the formula allowed.
It noted, however, that because "there was a carry-over reduction of 3.2 per cent from 2017, the latest adjustment comes up to 4.3 per cent, or six cents per trip.”
But given that it is a flat fee increase of six cents across all trips, and that the lowest basic bus fare is 77 cents – does it mean that the increase is up to 7.8% (6 divided by 77 cents) for commuters who travel short distances on a daily basis?
So, by deferring the 3.2% reduction which would have happened last year – it may in a sense, mask the actual increase of 11% after the change of NCF (7.8% + 3.2%).
I believe this is the highest increase in percentage terms in the history of public transport in Singapore.
It also allowed transport operators to make more money last year by deferring the reduction – deferring when the old formula resulted in a big reduction- kind of like changing the rules, when the score doesn’t suit you.
It is also noted that as a result of the fare hike, the public transport operators will see an increase of $78.2 million in fare revenues for 2019, where train revenue will rise by $35 million – with SBS Transit seeing a $10.9 million increase and SMRT, which is wholly owned by Temasek, seeing a $24.1 million hike. The remaining $43.2 million goes to the Land Transport Authority, which administers bus contracts.
Now the question begs, why is the LTA taking money from literally everyone – students, senior citizens, lower-wage workers and people with disabilities, whose increase will be capped at 1 cent?
As highlighted by ST, the increase of fare is due to the amount spent on buying new buses, building new stations and trains. But why is the government seeking to recover monies that it has spent on improving the infrastructure for public transport from the public and benefiting the public transport operators who do not have to bear the cost of infrastructure under the new public transport framework?
Why do this when the government’s transport revenues are about $10 billion ($2.9 billion motor vehicle taxes, $1.2 billion excise duties (transport related), $5.9 billion transport and communication (fees and charges) and $41 million traffic fines) – estimated receipts for FY2016. Moreover, we had a budget surplus of $9.6 billion.