Friday 23 January 2015

Public transport fares to increase by 2 to 5 cents from 5 April 2015

Bus, train rides to cost a few cents more from April
2.8% overall rise in fares as part of 2014 hike is carried over to this year
By Christopher Tan, Senior Transport Correspondent, The Straits Times, 22 Jan 2015

MOST card-paying adult commuters will pay four or five cents more for each bus and train ride from April 5.

For short trips, the hikes are just two or three cents.

Those using cash will have to fork out 10 cents more per ride.

Students will pay one cent more while senior citizens, low-wage workers and persons with disabilities will have their fares frozen.

The revision is part of an overall 2.8 per cent rise in fares that the Public Transport Council announced yesterday.

Based on 2013 data alone, the fares would have been cut 0.6 per cent. But because 3.4 per cent of a 6.6 per cent rise approved last year was carried over to this year, the adjustment this year becomes a 2.8 per cent increase.

As before, it is based on a formula that takes into account changes in inflation rate, wages and an energy index that charts oil and electricity costs. The first two components are given a 40 per cent weighting each, while energy has a 20 per cent weighting.

A productivity extraction of 0.5 per cent is then deducted from the derived figure. This is to allow commuters to share in the transport operators' productivity gain.

The revision will result in the two transport companies raking in $48.5 million more in revenue a year.

But each will have to contribute to the Public Transport Fund to help needy families cope with the fare hikes. SBS Transit will have to contribute 25 per cent or $5.5 million of its $21.9 million revenue gain. SMRT Corp will have to give 30 per cent or $8 million of its $26.6 million foreseeable gain.

Council chairman Richard Magnus said the size of the clawback hinges on the firms' profitability.

"It's a judgment call," the former senior district judge said. "The formula allows for a clawback of up to 50 per cent."

Besides the Public Transport Fund, which helps those with a household income of less than $1,500 a month, three other concessions remain in place.

Families that do not earn more than $1,900 a month, commuters with handicaps and senior citizens are among 1.1 million people who will not see a fare rise.

That aside, a government-funded Off-peak Monthly Travel Pass will also be rolled out from July 5. On trial for two years, this is another scheme to get commuters to travel outside peak periods.

Adult citizens and permanent residents can buy the monthly pass at $80, which allows them unlimited travel outside the peak hours of 6.30am to 9am and 5pm to 7.30pm on weekdays. There are no restrictions on weekends and public holidays. The pass costs $40 for persons with disabilities and senior citizens.

IT manager Ang Chwee Leng, 52, said the fare rise is no big deal. "After all, most people will expect their salaries to increase, including transport workers," he added.

But he hopes the sharp drop in oil prices will be reflected in future revisions.

Mr Magnus said that, all things being equal, the oil price plunge will result in a 1 per cent decrease in fares next year.

Asked how the new bus contracting model - where the Government collects and keeps fare revenue - will affect fare adjustments, he said: "There needs to be a new way to see how fares should be framed."

Transport Minister Lui Tuck Yew said on his Facebook page yesterday that the council had "achieved a good balance between keeping fares affordable for Singaporeans and maintaining the viability and sustainability of our public transport system".

Cheaper monthly pass to encourage off-peak travel
Scheme will be piloted for 2 years; 40,000 commuters likely to benefit
By Adrian Lim and Olivia Ho, The Straits Times, 22 Jan 2015

IN ANOTHER push to get more people to commute outside of the rush hour and reduce crowding on public transport, the Government will launch a new off-peak monthly travel pass later this year.

For $80 a month, adult commuters can enjoy unlimited rides on buses and trains during off-peak hours on weekdays, and all day on weekends and public holidays.

Senior citizens and those with disabilities can buy it for $40.

Regular fares continue for peak-period travel.

The off-peak pass is two-thirds the price of the $120 monthly travel pass for adults and the $60 pass for senior citizens and those with disabilities.

The new scheme will be piloted for two years and funded by the Government at an expected cost of $10 million annually, the Ministry of Transport said yesterday.

It is expected to benefit around 40,000 commuters and will kick off on July 5.

In a Facebook post yesterday, Transport Minister Lui Tuck Yew said: "If we can shift an additional amount of travel to outside the peak period, everyone will enjoy a more comfortable journey."

The off-peak travel pass will complement other government initiatives, such as a free-travel pilot scheme on the rail network which started in June 2013.

Under the scheme, commuters who exit any of the 18 designated MRT stations in the city area before 7.45am ride for free.

About 7 per cent of commuters have since switched to travelling during non-peak hours.

Last July, the Government also announced a programme to co-fund initiatives by companies to make their workplaces more supportive of flexible travel arrangements.

National University of Singapore transport researcher Lee Der Horng said that the new pass can encourage more people to travel during the off-peak hours.

But he added: "I think travelling before 6.30am is really too early.

"If they can shift the peak hour to start at 7am, I'm sure more people can benefit."

Freelance beautician Augustine Ong, 44, travels frequently during the off-peak hours to pick up beauty products, make deliveries and meet friends.

She spends more than $90 a month on public transport, and as much as $6 on some days.

"I would consider getting this concession card since, with transport prices going up, every little bit helps," she said.

$13.5m boost for fund that helps needy commuters
By Andrea Ng, The Straits Times, 22 Jan 2015

ANOTHER $13.5 million will be added to the Public Transport Fund this year to help needy commuters.

The money comes from public transport operators SBS Transit and SMRT, which will give $5.5 million and $8 million respectively - or 25 per cent and 30 per cent of their additional fare revenue.

First given out in 2004, public transport vouchers are distributed to needy Singaporeans to help them cope with fare hikes.

Last year, 207,000 of these vouchers were given out, of which 180,000 were redeemed.

Year-round applications for public transport vouchers start from March 16 this year. Residents can visit community centres to apply for the vouchers, which will be sent out from mid-April.

Application letters will be sent directly to beneficiaries of ComCare programmes as well.

In addition, concession fares for low-wage workers and the disabled remain unchanged, the PTC said.

Low-wage workers now get a fare discount of 15 per cent under the Workfare Transport Concession scheme introduced in July last year.

People with disabilities get a 25 per cent fare discount, and do not have to pay additional fares for distances beyond 7.2km.

They can also apply for a $60 monthly concession pass.

Since last July, nearly 200,000 low-wage workers and 10,000 people with disabilities have benefited from the two concession schemes.

Mr Ng Wei Liang, who is visually and hearing impaired, used to spend $100 on transport every month. The 27-year-old now spends about half that amount after he started using a concession pass for the disabled last July, and said he does not have to top up his card as often as before.

Increases expected as costs still weigh on operators, say experts
By Amanda Lee, TODAY, 22 Jan 2015

Concession schemes will buffer many from the fare increase announced yesterday, but those left in the cold hope to see a reprieve in coming years.

Experts, however, felt the latest hike is expected, given that bus and train operators are still facing considerable costs while under pressure to improve their services.

While Transport Minister Lui Tuck Yew said on Monday that commuters could see fares fall by about 1 percent next year because of a drop in energy prices last year, energy costs are not the biggest contributor to fare rises, said Nanyang Technological University transport economist Walter Theseira.

Fares would have fallen by 0.6 per cent this year because of the drop in energy prices in 2013, but an increase of 3.4 per cent was rolled over from the previous exercise, resulting in fares rising 2.8 per cent this year.

Commuters TODAY spoke to said while fares had risen, the quality of service had yet to catch up. While increases are marginal, they add to monthly expenditure over time, they said.

Mrs Angela Ng, a 50-year-old housewife, said there are times when she has to wait for a bus for 30 minutes. “The trains still break down every now and then,” she said. Administrative associate Wong Anqi, 23, added that two consecutive years of increases were “too much”.

SIM University’s urban transport management expert Park Byung Joon said bus and trains operations are not making “huge money”. “We are not in the government contracting model(for buses) yet, we are still in the operating mode (where) the expenditure has to be recovered from fares,” he added.

Dr Theseira said a large part of the increase year to year is usually due to the rise in labour cost and other operating expenses, while fuel cost is not a “large explanation” for the increase in prices over time.

While energy prices have been high over the past few years, they have also been stable. “Usually, year on year, public transport becomes more efficient, so the fuel cost component will be dropping over time,” he said.

National University of Singapore transport researcher Lee Der Horng said while no one likes to see a hike, there is a price to pay if Singaporeans want to see a better public-transport system. “And I think the key thing in this whole exercise is that the authority or Government must make sure fares are affordable, especially to low-wage workers, minority groups, senior citizens and students,” he added.

Member of Parliament Seng Han Thong (Ang Mo Kio GRC), who is deputy chair of the Government Parliamentary Committee (GPC) for transport, said the middle-income group would be most affected by the fare hike. However, as buses and trains improve connectivity, it would benefit this group.

GPC chairman Cedric Foo (Pioneer) added that those who “fall between the cracks”, such as the jobless, could apply for public-transport vouchers.

MP (Mountbatten) Lim Biow Chuan noted that a person who takes two public-transport trips a day would see increases of about S$1 a month. “It’s still bearable,” he said.

Bus contracting model to prompt relook at fare review formula
By Joy Fang, TODAY, 22 Jan 2015

The overhaul of the bus industry would require the fare review formula to be relooked, with the Public Transport Council (PTC) having to consider, among other things, whether to apply different sets of fares for a period of at least a few months next year when some bus routes would be under the new bus contracting model while others would not.

The bus contracting model — under which the Government will own all bus operating assets and collect the fares, while operators run the services — will be implemented in phases, starting from the middle of next year.

Three packages of routes, making up about 20 per cent of routes, will be tendered out first. The remaining 80 per cent will be grouped into nine packages, which will be run by incumbents SMRT and SBS Transit on negotiated contracts under the contracting model, for about five years after their Bus Service Operating Licences expire on Aug 31 next year. After the negotiated contracts expire, more bus services will be gradually tendered out.

The existing fare review formula is valid from 2013 to 2017, but PTC Chairman Richard Magnus said it could be relooked before the new model is implemented. He added that it would be a challenge to review fares for the routes under the existing and new models, as well as those in transition. “We will need to begin to rethink how fares will be then,” he said.

On whether there would be different sets of fares, he cited social equity and distribution as factors for consideration.

Nanyang Technological University transport economist Walter Theseira said that under the new model, the Government could keep fares down, “effectively throwing money into a loss-making operation”. “It changes the nature of how subsidies are provided to the system,” he said.

National University of Singapore transport researcher Lee Der Horng said there was also room for the PTC to make the formula more responsive to inflation, wage levels and energy prices, though he acknowledged that it takes time for the relevant data to be available. Under the existing formula, there is a one-year lag in the indices used for computation.

SIM University urban transport management expert Park Byung Joon saw the merits of the current approach. “The whole idea ... is that we want to avoid a situation (where there is) see-sawing (of fares) every time fuel prices go up and down,” he said.

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