Friday 21 November 2014

Keep public transport affordable, urges Transport Minister Lui Tuck Yew ahead of 2015 fare review

Cushion vulnerable groups from impact of hikes, urges minister ahead of fare review
By Lester Hio, The Straits Times, 20 Nov 2014

PUBLIC transport must remain affordable to all Singaporeans, Transport Minister Lui Tuck Yew said last night at the start of this year's fare review exercise.

Mr Lui wrote in a Facebook post that he hopes the Public Transport Council (PTC) will study whether it is possible to insulate vulnerable groups such as senior citizens from a fare increase - or at least mitigate the impact on them.

He also said the Land Transport Authority has been tasked with studying ongoing travel demand management efforts and encouraging more commuters to travel during off-peak hours.

To achieve the latter, he suggested: "Perhaps the Government can introduce off-peak monthly passes which should also help reduce the travel expenditure for this group of commuters."

Public transport operators may submit fare review applications to the council for consideration by Dec 19.

Results will be announced in the first quarter of next year.

A PTC spokesman said that evaluations will be guided by the fare review mechanism and fare adjustment formula recommended by the Fare Review Mechanism Committee, and accepted by the Government, in November last year.

These include lower fares for lower-wage workers and the disabled, concessions for polytechnic students, free travel for children below seven years old, and the introduction of an adult monthly travel pass which offers unlimited travel for $120.

However, last year's changes also increased fares by 6.6 per cent in two phases - 3.2 per cent from April this year, and 3.4 per cent next year. The forthcoming review could further revise next year's prices.

Mr Lui said the Ministry of Transport will study how concession schemes for lower-wage workers and the disabled can be enhanced. He also hopes the PTC will consider not raising the prices of travel passes.

The PTC said it will ensure a "good balance" between meeting the needs of the commuting public and keeping the public transport system financially sustainable. Its spokesman added: "The PTC will pay particular attention to fare affordability for the more vulnerable groups of commuters."

Government Parliamentary Committee for Transport chairman Cedric Foo pointed out that part of the fare adjustment formula used in the review is a new energy index which passes on fuel cost savings to commuters.

Mr Foo, who is also a Member of Parliament for the Pioneer constituency, said he is hopeful that with lower fuel prices, transport operators can pass on the cost savings to commuters.

He added: "Given the slew of concessions this year, and the introduction of public transport vouchers for the vulnerable group who fall out of the net, there does seem to be a good balance between commuter and public transport operator needs."

* Maximum allowed public transport fare increase in 2015 is 2.8%: Lui Tuck Yew
By Saifulbahri Ismail, Channel NewsAsia, 17 Dec 2014

Any increase in public transport fares next year will be lower than the original roll-over figure of 3.4 per cent. In an exclusive interview with Channel NewsAsia, Transport Minister Lui Tuck Yew said "the maximum that is allowed for this particular fare increase will be 2.8 per cent".

This figure results from deducting the fare adjustment quantum of -0.6 per cent, which is due mainly to a drop in energy costs. 

The Public Transport Council (PTC) began its annual fare review exercise last month, and results are expected to be announced by the first quarter of 2015.

The last review in Jan this year announced a fare increase of 6.6 per cent, to be adjusted in two steps. A 3.2 per cent hike was implemented in Apr, and the remaining 3.4 per cent carried forward to the current review. The rollover system was a recommendation made by the Fare Review Mechanism Committee in Nov 2013.

The fare formula is based on four components:
- Core CPI inflation: This currently stands at 1.7 per cent, and excludes home and car prices.
- Average wage increase, at 4.3 per cent
- Energy index: This registered -12.6 per cent, due to a drop in energy costs in 2013. The energy index reflects the rising cost of power and fuel as a proportion of an operator's expenses.
- Productivity index at 0.5 per cent, where operators share productivity gains with commuters.
These components have been given weightage of between 20 and 40 per cent - 40 per cent for core consumer price index (CPI), 40 per cent for wage index, and 20 per cent for energy index.

The fare adjustment quantum formula is as follows: CPI + Wages + Energy - Productivity = Fare Adjustment Quantum. So this year's fare adjustment quantum is -0.6 per cent.

Said Mr Lui: "Here we are using 2013, for this fare formula. We know that energy costs have come down, as compared to 2012, which is why for the most recent year, the index was actually -0.6. You may recall that it was 6.6 per cent, of which the most recent fare increase gave an upward revision of 3.2 per cent. So there was a 3.4 per cent that was carried over, and now taken together with the -0.6 per cent, which was derived using all the numbers in 2013, the maximum that is allowed for this particular fare increase will be 2.8 per cent."

The PTC also told Channel NewsAsia it will consider this fare adjustment of 2.8 per cent for the current review exercise. Public Transport Operators SBS Transit and SMRT have until Friday (Dec 19) to submit their applications to the PTC for a fare increase, subject to approval by the Council.

The Transport Minister stressed that the fare review must ensure public transport remains affordable. At the last review, concessions were introduced for low-income workers and those with disabilities, to balance the fare increase.

Observers say this move should continue. Said Chairman, Government Parliamentary Committee for Transport Cedric Foo: "There is a group of needy people that we must always pay attention to, and do whatever we can to help them. Median income may rise, but those stuck at the bottom decile may still struggle with even small fare increases. So I would like to see the public transport voucher and low-wage concessions as permanent features. People who are dealt a poor deck of cards from birth - persons with disabilities - I think they should always be helped."

The PTC has also been urged to cushion the impact of fare increases on senior citizens. In addition, the Government is looking at the possibility of introducing off-peak monthly passes for commuters.

SBS Transit and SMRT submit applications for fare adjustments.
Channel NewsAsia, 19 Dec 2014

The Public Transport Council (PTC) has received applications for fare adjustments from Singapore's two public transport operators - SBS Transit and SMRT.

SBS Transit submitted its application for bus and rail fare adjustments "amidst an environment of rising costs", it said in a press release on Friday (Dec 19).

SMRT said last month that it is seeking "a better alignment of fares and operating costs".

The PTC commenced its annual fare review exercise on Nov 19, and Friday is the deadline for public transport operators to submit their applications for fare review for consideration. The decision will be announced in the first quarter of next year, according to the PTC.

Transport Minister Lui Tuck Yew previously told Channel NewsAsia that the maximum allowed public transport fare increase for 2015 is 2.8 per cent.

To evaluate applications, the PTC will take guidance from the fare review mechanism and fare adjustment formula recommended by the Fare Review Mechanism Committee and accepted by the Government in Nov 2013.


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