SMRT Trains and rail operators SBS Transit have officially submitted their applications to the Public Transport Council (PTC) for an increase in train fares in Singapore.
PTC, a fare watchdog hired by the Transport Ministry, released a statement on Monday (23 September) stating that it had received the applications from both the public transport operators.
This move comes after PTC announced early this month that public transport fares could go up to 7% in this year’s Fare Review Exercise (FRE).
The Council came up with the figure of 7% based on the new formula introduced last year that included a measure of Network Capacity Factor (NCF) which measures capacity provision relative to passenger demand for the entire public transport system.
In 2018, the fare went up by 4.3% after three years of fare reductions.
PTC went on further to explain that one of the main reasons for potential increase in fares was due to the recent hike in energy prices. It added that rail operating costs have also rose because of service enhancements.
However, bus fares are not affected for now as the Land Transport Authority (LTA) owns the fixed and operating assets for buses. In fact, bus operators are given a fixed amount to ply services under the bus contracting model.
The PTC noted that LTA will “submit information on the bus industry financials..to help in the fare review process”.
The Straits Times (ST) reported that PTC will only announce its decision on the latest annual fare revision in the last quarter of 2019.
As for both the operators, they did not reveal if they had applied for the maximum 7% increase, which is permitted in this year’s review exercise, ST noted.
An increase of 7% would mean the fare price could go up to 9 to 10 cents per ride.
As for SBS Transit, it confirmed on Monday that it had submitted application for a fare increase but did not reveal the details.
“The cost of rail operations has been increasing due mainly to higher repairs and maintenance costs. As a result, SBS Transit has continued to incur rail losses despite the growth in ridership,” it stated.
As such, it hoped that the hike in fares will “help mitigate some of these cost increases”.
As for SMRT Trains, its CEO Lee Ling Wing said that the company “support a 7% fare increase for high performance and sustainability of the rail service”.
“In financial year 2019, SMRT Trains’ maintenance-related expenditure accounted for 71% of rail fare revenue, up from 62% in financial year 2018. Because of intensified and comprehensive maintenance efforts, total operating cost has exceeded fare revenue and is not sustainable,” he pointed out.
He continued, “While PTC deliberates on the fare review, SMRT will press on with cost management efforts including out Kaizen initiatives to drive productivity and cut wastage, as well as greater use of technology.”