Wednesday, 22 January 2014

Fare hike and breakdowns are separate issues: PTC

By Royston Sim, The Straits Times, 21 Jan 2014

WHILE yesterday's train delay led some people to comment that fares should not go up when trains are still breaking down, the Public Transport Council (PTC) has said that the two issues should be kept separate.

Its chairman Gerard Ee said the raising of fares is to cover rising costs for operators SMRT and SBS Transit, even as he noted that service reliability has to improve. Staff and material costs have spiralled upwards even as operators have been trying to improve productivity in the past few months, he told The Straits Times.

And while the operators are still profitable, he said their finances would need to be healthy to maintain service reliability.

"They need to finance replacement and upgrading. The public may not appreciate that one bus costs about $400,000 and, for trains, the costs go into millions."

At a briefing on the signal fault that affected 19,000 North-South Line commuters yesterday, SMRT chief executive Desmond Kuek was also asked how the fare hike could be justified given train breakdowns.

He said his firm had applied for a fare increase "for the system to be sustainable".

Consumers Association of Singapore executive director Seah Seng Choon agreed that raising fares and boosting the reliability of service are separate issues.

The fare hike addresses rising operating costs, which also involve enhancing systems and making sure they run smoothly, he said.

But he also stressed that the operators have to drastically reduce breakdowns, and action should be taken against them if they fail to meet standards.

In Parliament yesterday, the Transport Ministry proposed a Bill to raise the maximum fine for rail incidents or regulatory breaches.

It has suggested a new cap of $1 million or 10 per cent of the operator's annual fare revenue, whichever is higher. The current maximum penalty is $1 million.

Commuters caught in yesterday's train delay said they had expected better, especially after the recently announced fare hike.

Banking relationship manager Joy Cheong, 25, said: "After the fare hike, commuters are expecting greater efficiency and an improved commuting system, not frequent breakdowns."

She boarded a train at Yio Chu Kang station at 8.10am, but it moved only at 8.30am, she said.

It stopped after a short distance. Only then was she told of the reason for the delay, she said.

The train began moving again only after 8.50am.

"SMRT could have told us there's a train fault at the outset so people can make alternative arrangements," she said.

Travel agent Shannon Tan, 45, who got to work an hour late, said SMRT should have given more timely information.

Separately, SBS Transit spokesman Tammy Tan said it is investigating a power fault that caused a blackout at the walkway between the North-East and East-West lines at Outram Park station.

She said train services were not disrupted, and staff with torches provided lighting along the path.

SBS Transit did not specify what time the power trip occurred or how long it lasted.

Sufficient safeguards to keep fares affordable

WE THANK Mr Paul Chan Poh Hoi ("Fare hike, breakdowns are inseparable") and Mr Lin Howard ("Is increase really necessary?") for sharing their views on Wednesday.

It is understandable that commuters would like to have a service quality component added to the fare formula. However, the Fare Review Mechanism Committee (FRMC) and the Public Transport Council (PTC) are concerned that this may lock us into a downward spiral.

If fares are not adjusted to take into account operating cost increases, the operators would have fewer resources to maintain and improve services. This is of especial concern because our rail system is ageing rapidly, and given that the finances of the two operators in the bus sector have been in the red in recent years, as fares have not kept up with cost increases.

The FRMC reviewed this and concluded that it would be preferable to continue to treat the two issues separately, with service quality issues to be addressed by the Bus Quality of Service Standards and Rail Operating Performance Standards, wherein the operators are punished for lapses and breakdowns in service, and supported by a more stringent penalty regime.

The committee also recommended that the financial penalties imposed on the operators should all go to the Public Transport Fund to benefit needy commuters. The PTC shares the committee's belief that this is a better approach to ensuring that the operators pay serious attention to service quality, and have the resources to do so.

In considering any fare adjustment, the PTC carefully balances the interests of commuters against the need to ensure the long-term financial viability of the public transport system.

In particular, we fully agree that public transport fares must remain affordable. The PTC had therefore taken the decision to approve an overall 3.2 per cent fare increase, a quantum significantly lower than what the fare formula actually allows (6.6 per cent), and also lower than the expected average national wage increase of about 4 to 5 per cent for last year.

To keep fares affordable, the PTC also decided to implement the full slew of concession enhancements for young children, students, full-time national servicemen, senior citizens and adults who are heavy users of public transport, as recommended by the FRMC.

With the enhancements, and including the two new fare concession schemes for Workfare recipients and persons with disabilities to be implemented by the Government, up to a million commuters will benefit.

In addition, targeted help will be given to needy families. The PTC had mandated the highest-ever contribution from the two operators to the Public Transport Fund, and the Government has set aside $7.5 million in public transport vouchers from the fund to help low-income households further manage the increase in their transport expenditure.

Overall, we believe there are sufficient safeguards and measures to keep fares affordable.

Alvin Chia
Public Transport Council
ST Forum, 24 Jan 2014

Fare hike, breakdowns are inseparable

I DISAGREE with Public Transport Council chairman Gerard Ee's assertion that public transport fare hikes and service reliability are separate issues ("Fair hike and breakdowns are separate issues: PTC"; yesterday).

In any transport business, fare increases would not go down well with customers if there are frequent breakdowns and unreliable service.

For example, if an airline were to announce a fare increase, yet experience frequent breakdowns causing flight delays, would its management say the two issues are separate?

In a competitive market, I am sure the airline would refrain from raising fares and instead focus on improving its service, even at a loss.

The Public Transport Council cannot treat listed public transport operators both as "public" organisations providing essential transport services and as private entities requiring regular fare increases to sustain their operations and ensure their profitability.

Public transport operators should admit that frequent breakdowns are not acceptable, and strive towards providing efficient and timely service.

Paul Chan Poh Hoi
ST Forum, 22 Jan 2014

Is increase really necessary?

WHAT was the rationale behind the Public Transport Council's approval of bus and train fare hikes ("Transport fare hike offset by slew of concessions"; last Friday)?

The two public transport operators will make an additional $53.5 million in revenue, and the Government will have to spend $50 million of taxpayers' money to cushion the effects of the increase on low-wage workers and disabled people. This is on top of the

$1.1 billion Bus Service Enhancement Programme launched earlier to improve bus services.

The two operators' contribution of a combined $11.58 million towards a fund meant to help the poorest households cope with the fare hike is a pittance compared with the millions in their reported operating profits.

In the first place, was the fare increase really necessary? Operating costs may have gone up, but so has ridership as the population increases.

Claims of the need to maintain the public transport system at a high cost do not hold water as service standards have not improved over the years. Train faults have become more frequent, and buses are crowded and slow to arrive.

Public transport is just that - transport for the masses, for which the Government has the responsibility to ensure affordability for the populace.

Therefore, it is necessary to keep prices low. Any fare hike has to be justified by better service standards offered by the operators.

Lin Howard
ST Forum, 22 Jan 2014


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