Bus fares may go up to help improve drivers' pay

Minister hopes ongoing fare review would help operators raise salaries
By Royston Sim and Maria Almenoar, The Straits Times, 7 Dec 2012

TRANSPORT Minister Lui Tuck Yew indicated yesterday that bus fares might go up in future to help improve the wages of bus drivers.

He acknowledged that the drivers needed to be paid more and expressed the hope that the ongoing fare review would allow public transport operators to increase the drivers' pay.

Mr Lui made these points in his first public comment on last week's illegal strike by 171 SMRT bus drivers from China over pay and living conditions.

He said: "The fare adjustment that is due to take place next year will hopefully... allow the two operators to have more resources in time to come to make further salary adjustments to their drivers.

"We recognise that the drivers need to be paid more, the question is where is that money coming from?"

A 13-member team headed by senior district judge Richard Magnus has been tasked to review the fare formula for public transport and make recommendations.

The team is likely to release its findings early next year.

Mr Lui noted that at the moment, there was a "real significant mismatch" between the costs that operators face and how much they have been allowed to raise fares.

The fare adjustments have been about 0.3 per cent cumulatively over the past five to six years while operating costs have risen about 30 per cent, he said.

This is a point the fare review committee has also recognised, he added.

"When they submit the report to me early next year, we will have to look very, very carefully at what they say and what are some of the recommendations to address this as well," he said.

Mr Lui was speaking to reporters after visiting Tampines interchange to announce new bus routes.

The existing fare formula takes into account three factors: operators' productivity, consumer price index which is a measure of inflation, and wage index that takes into account changes in the national wage average.

When contacted, Mr Gerard Ee, chairman of the Public Transport Council, which regulates the transport industry, noted that in the existing fare formula, the wage index covers a whole range of wage structures.

Mr Magnus' committee could be thinking of how to more directly reflect the bus drivers' wages, which form the major cost of providing transport, he said.

But, he added: "It's all guesswork at this point. I wouldn't want to second-guess the work of the fare review committee."

Mr Cedric Foo, chairman of the Government Parliamentary Committee for Transport, told The Straits Times that the new fare formula has to give the operators a reasonable return that investors would expect.

He suggested making the provision of transport vouchers automatic for the low-income, similar to GST rebates.

Mr Lui also told reporters that SMRT's management had focused on improving train maintenance and reliability after last December's major disruptions. It had done a good job, he said.

Mr Lui also urged people to give the new chief executive Desmond Kuek time to turn SMRT around.

Six new bus services by March
Punggol-Bishan and Tampines-CBD services will start next weekend

By Royston Sim, The Straits Times, 7 Dec 2012

SIX new bus services will be rolled out from this month until the first quarter of 2013 as part of an ongoing drive to improve the network here.

Two new routes, services 50 and 513, will start this month, while the remaining four will be introduced next year and serve areas such as Yishun, Choa Chu Kang, Simei, Loyang and Changi Business Park.

Transport Minister Lui Tuck Yew announced the new services yesterday after visiting Tampines Bus Interchange. All but one of the new routes will be funded by the Government's $1.1 billion Bus Service Enhancement Programme meant to ramp up service levels. Bus operator SBS Transit will shoulder the costs for one service as part of the ongoing network improvement.

Three new bus routes have already been put on the roads since September. By the end of this year, new buses will be added to more than 50 existing services that are busy during peak hours.

Mr Lui said the new routes have been well received. He added: "The feedback has been good so far. People have generally felt the difference in terms of loading and frequency of arrivals."

From Dec 16, service 50 will link Punggol and Bishan. Run by SBS Transit, it will pass through Sengkang East, Fernvale and Yio Chu Kang Road before turning onto Ang Mo Kio Avenue 5. It will serve the new ITE College Central campus, swing by Ang Mo Kio MRT station and end at Bishan interchange. Buses will arrive every 10 to 19 minutes.

Tampines West commuters travelling to the Central Business District will have an alternative transport option when service 513 launches on Dec 17. This express bus service will ply 10 stops in Tampines before taking the East Coast Parkway to the city. Its route is reversed in the evening.

Service 513 will make two trips during the weekday peak morning hours at 7.30am and 7.45am. It will depart from Anson Road and head back to Tampines at 6.15pm and 6.30pm. Journey time is expected to be about an hour, comparable to taking a feeder service and transferring to the East-West MRT line into the city.

The Land Transport Authority (LTA) is still working out details of the three new routes that will be introduced from January.

Two routes will offer commuters from Yishun and Choa Chu Kang respectively with a direct ride into the city. The third will be a loop service from Tampines to the Changi and Loyang areas.

SBS Transit is also firming up details of the new trunk service it will launch in the first quarter of next year. This route will improve the connectivity in Tampines, Simei and Changi Business Park.

Under the $1.1 billion plan, 800 new buses and about 40 new routes will be added to the network. The Government will fund 550 new buses while the operators will add another 250 to their fleets.

By the end of this year, 89 new buses will be added to the bus network to improve capacity on existing routes and service the new ones.

Clementi feeder service 284 is among the existing services to be improved. It will run at every four to eight minutes during peak hours, instead of six to 14 minutes at present.

Said LTA deputy chief executive Chua Chong Kheng: "These improvements are geographically spread to benefit as many commuters as possible and aim to make meaningful enhancements to bus service levels."

Tampines GRC MP Masagos Zulkifli noted that the transport problem in Tampines largely involves several bus services that bunch up during peak hours. He said feeder buses also tend to suffer from bunching, where two buses on the same service arrive shortly after one another or at the same time.

Welcoming the new service 513, he said: "It will serve our residents well before the Downtown Line 3 comes up in 2017. It will be a good stopgap."

Seletar resident Ronald Shen, 22, said service 50 will provide him with a much faster way to Ang Mo Kio. The undergraduate said: "It will make travelling a lot faster in the north-east. There is a lack of buses in those areas."

Avoid a bus fare policy of half-measures

THE current formula of transport fare adjustments - last reviewed in 2005 - has not been changed despite spikes in the price of fuel in recent years.

This artificial holding down of fares has resulted in bus operations being unprofitable. Coupled with an increase in demand for the service, this means operators have little incentive to improve or expand bus services.

The Government has attempted to solve this with the $1.1 billion Bus Service Enhancement Programme. But the public have to pay for this, with their tax money, before getting to enjoy any improvement in service.

Economist Henry Hazlitt has said that if we seek to hold prices at a given historic level, we must have a completely regimented economy.

If the Transport Ministry truly believes in the efficiency gains by private companies, as opposed to a nationalised system, then it should not cap the profits which motivate such efficiency.

Similarly, the public should not insist on "affordable" fares but accept market prices in return for a better bus system.
Tan Si An
ST Forum, 7 Dec 2012

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