Smaller hikes this year, if any - ST, 17 May 06
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Smaller hikes this year, if any
Cap is 1.7%, lower than 2.4% last year, and any rise will take effect in October
By Christopher Tan
SENIOR CORRESPONDENT
IF BUS and train fares go up this year, any increase will be capped at 1.7 per cent, lower than the 2.4 per cent hike last year.
Last year's 2.4 per cent cap resulted in bus and train fares rising in July by one to three cents per ride for ez-link card users, and 10 cents for commuters who use cash or buy single-trip tickets on trains.
Therefore, this year's increase is likely to result in smaller rises all round.
The Public Transport Council said this year's ceiling is based on a mathematical formula introduced last year that is more reflective of economic conditions.
From last year, fare adjustments are supposed to be annual affairs, as the authorities argued that small but regular changes were preferred to bigger jumps every few years.
When contacted, an SBS Transit spokesman said the company will probably apply for a rise when the time comes, while SMRT said it will decide only when the deadline draws nearer.
This year's application deadline was pushed to August, from this month, because the council needed more time to implement broad changes to the Public Transport Council Act.
These include a new licensing regime for bus operators, an audit system for bus operator service standards and a penalty system for fare evaders.
As such, any fare increase will take effect in October, instead of July.
With oil prices crossing US$70 (S$110) this year, it looks certain that the two transport operators will ask for a fare hike.
In justifying its application last year, SBS Transit cited a 40 per cent rise in oil prices to US$50 a barrel in the first quarter of 2005.
The company said then, even if it was granted the maximum fare increase allowed, the additional revenue of $14 million would not cover the estimated $17 million increase in fuel and energy costs for 2004, and a further $15 million to $18 million for 2005.
Council chairman Gerard Ee said the council will still have to look at the operators' books and 'ask them for justification' for any increase. It will also examine their profitability.
ComfortDelGro, SBS Transit's parent group, posted net earnings of about $200 million last year, while SMRT made about $100 million.
If the application is justifiable, 'we will then decide with them how the actual increases are to be applied', Mr Ee said, noting that last year's rise was not across the board.
In calculating the new fares, the council will also factor in data on average changes in the Consumer Price Index and wages.
Unlike the old formula which pegged fares only to the Consumer Price Index, the new formula allows fares to fall during an economic downturn.
With all factors considered, Mr Ee said the council and the Land Transport Authority will then run the numbers through a computer program to see if the overall increase is within the prescribed cap.
Asked what he thought about the recent call by the Workers' Party for the council to be abolished and transport companies to be nationalised, Mr Ee said nationalised entities need not be more efficient than private corporations.
In any case, 'who's going to set the fares?' he asked.
When it was pointed out that low-income families have seen commuting costs rise more than overall household expenditure, Mr Ee said it is more effective to target the poor with measures such as the $4 million transport fund set up last year to help 80,000 families.
'If we structure fares that are affordable to the poorest group, we will subsidise the other commuters,' he said. 'And that may not be fair to the transport operators, whose shareholders are not necessarily wealthy.'
Social workers reckon a fare rise will again hit low-income families hard.
'We regularly come across people who find it hard to pay bus fares. So they prefer not to work too far from their home,' said Ms Koh Wah Khoon, director of the Singapore Children's Society Family Service Centre in Yishun.
'There are some who walk to our centre, just to save on bus fare.'
Mr Ee, who is president of the National Council of Social Service, said if commuters want lower fares, they may have to manage their expectations - meaning they will have to make do with lower standards of service.
'We have a fairly reasonable system compared with many other countries,' he added.
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Fare formula
THE year-old fare adjustment formula is expressed mathematically as 0.5 CPI + 0.5 WI - 0.3%, where CPI is the change in the Consumer Price Index (or inflation), WI is the change in average wages and the third element is the productivity gain of transport companies, fixed at 0.3 per cent until the next review in 2008.
This year's 1.7 per cent cap is derived thus: 0.5 (0.5% CPI increase from 2004 to 2005) + 0.5 (3.5% wage increase) - 0.3%. Last year's 2.4 per cent rise was based on: 0.5 (1.7%) + 0.5 (3.6%) - 0.3%. -
what? so its a small rise? smaller than the recent previous one?
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yeah. thanks to those people who voted for +++.
they already promised, that if they win big, means more hikes
dosent help much that Transport Minister is my neighbour
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I would rather look at service quality
Buses that has reached 17 years should be scrapped, it must be strictly enforced -
it is still an increase, however small.
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At least better than last time, 5c at 1 goOriginally posted by dragg:it is still an increase, however small. -
why so many diff threads
http://www.sgforums.com/?action=thread_display&thread_id=191167 -
tis one is for the bus siao to discuss....
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The point is that the level of service doesnt justify for the hike!
Esp for SMRT!!!! -
When they can improve all their bus svs on par with every svs, complains will get lesser