Sunday 25 October 2015

Lower bus, train fares from 27 Dec 2015 after latest review

Reduction is maximum 1.9% allowed and will coincide with opening of Downtown Line 2
By Christopher Tan, Senior Transport Correspondent, The Straits Times, 24 Oct 2015

Bus and train fares will drop by up to four cents per journey from Dec 27, the Public Transport Council (PTC) announced yesterday after its latest annual review.

The adjustment, which takes into account last year's drop in energy prices, is timed to coincide with the opening of Downtown Line 2, and is four months earlier than usual.

The reduction is the maximum 1.9 per cent allowed in a fare formula that weighs inflation, wages and fuel or energy prices. It will impact SBS Transit's revenue by $15.7 million, and SMRT's by $20.4 million.

The cut follows substantial rises granted in two previous adjustments, which saw fares rising by 3.2 and 2.8 per cent respectively.

From Dec 27, card-paying adults will see their fares drop by one to four cents per journey, while students and senior citizens will see cuts of one to two cents. A family of two adults and two school-going children could see its fare expenditure fall by more than $86 next year.

PTC chairman Richard Magnus said: "This year's decision to reduce fares for commuters is in line with the negative quantum yielded by the fare adjustment formula due to lower energy prices. We have decided to grant the full quantum of reduction to benefit commuters and to keep fares affordable."

Low-wage workers will pay one to four cents less, while people with disabilities will pay one to two cents less. But monthly concession and off-peak passes for the latter group will remain unchanged at $60 and $40 respectively. Both groups will continue to get 15 to 25 per cent fare concessions.

Commuters who pay cash, said to constitute merely 3 per cent of the total, will not see any reduction. Mr Magnus said this was to encourage people to pay by card.

As their revenue will contract because of the fare reduction, the two transport operators are not required to contribute to the Public Transport Fund this time round.

The fund is used to disburse vouchers to needy families to help them defray fare increases. The Transport Ministry said the fund will have a balance of around $8 million by next March. Of the 250,000 vouchers worth $30 each previously set aside, more than 180,000 were redeemed as at Sept 30. Needy commuters have up till March 15 to apply for the remaining vouchers.

Separately, Mr Magnus said the council will decide how to adjust fares next year when the contracting model for buses kicks in. In such a model, an operator is paid a fixed sum to run a package of routes by the Land Transport Authority, which, in turn, collects fare revenue. This operation is usually subsidised by taxpayers, making it more complex to accrue cost and compensation.

The current fare formula takes into account changes in inflation rate, wages and an energy index that charts oil and electricity costs - all of which are proxies for costs faced by an operator.

Mr Cedric Foo, who was chairman of the Government Parliamentary Committee for Transport, said the latest revision "makes sense".

"It proves that the formula works, and that it works both ways," he said. "It is also noteworthy that the PTC had granted the decrease provided by the formula in full."

This, he said, contrasted with times when it granted only partially quantums allowed for by the formula. "That is good to know," he said.

The Public Transport Council has concluded the 2015 Fare Review Exercise and will grant the full 1.9% fare reduction...
Posted by Land Transport Authority – We Keep Your World Moving on Friday, October 23, 2015

Bus fare formula may be tweaked as early as 2016
By Jermyn Chow, The Straits Times, 24 Oct 2015

The current fare formula could be tweaked as early as next year, as the Government starts taking over the ownership of buses and collecting fare revenue.

Mr Richard Magnus, who chairs the Public Transport Council, said his panel will have to start re-examining the fare formula "quite quickly" as the Government shifts to the bus contracting model next year. He added that the review will start before 2017.

Aimed at raising service standards while ensuring the long-term viability of operators, the bus contracting model will mean that local and foreign operators bid for the right to operate routes in a competitive tendering system, with the fares collected going to the Government.

This has raised the possibility that the fare formula could change.

But Mr Magnus did not commit to whether the current fare formula will definitely change, saying only that the panel will have to "look at various indexes".

Currently, the annual fare revision exercise 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 weighting of 20 per cent.

According to Mr Magnus, the fare-based model is one of three in the world. The other two are the fee-based (for more than two players in the market) and monopoly (a nationalised transport system) models.

Calling Singapore's model "certain, clear and transparent", Mr Magnus said: "We have quite a good formula, at least for now. It's published for all to see. So commuters know, operators know, stakeholders know exactly what the fare- based model is all about.

"You don't have that in a fee-based model."

Mr Magnus also announced that bus and train card fares will dip by 1.9 per cent from Dec 27.

About 2.2 million commuters will see their bus and train card fares drop by up to four cents a journey.

It is the first time since 2010 that fares are being cut, in tandem with falling energy prices. The previous two adjustments saw fares rising by 3.2 per cent and 2.8 per cent, respectively.

Most commuters whom The Straits Times spoke to cheered the cost savings, even if they may not amount to much.

Bank officer Judy Teo, 29, who takes the bus from her home in Telok Blangah to her Shenton Way office every day, said she is likely to save about $1.50 a month. "It may not be much but our bus and train fares are already quite low."

Account executive Terence Kua, 32, who spends about $86 a month on his daily bus and train trips to and from work in Lavender, said: "Paying lower fares is great, but it is more important that commuters can continue to rely on public transport and service standards will go up."

JUST IN: Bus and train card fares to drop by up to four cents per journey from Dec 27
Posted by The Straits Times on Friday, October 23, 2015

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