Chairman of the PTC Gerard Ee announced the 1 percent fare adjustment at a media briefing on Friday. (Yahoo! photo/ …
UPDATE
Singaporeans have questioned the 1 per cent public transport fare hike approved earlier on Friday morning by the Public Transport Council.
While the overall 1 per cent fare increase is significantly lower than the 2.8 per cent cap allowed under the fare adjustment formula, many still wondered if it was justified.
The increase comes at a time when Transport Minister Lui Tuck Yew has been trying to address complaints of over-crowdedness, service disruptions, and unpredictable bus and MRT train times.
Within an hour of the announcement, over a hundred people left comments on Yahoo Singapore's Facebook page.
Andrew Tan wrote, "We need to see results before price hike can be approved. Can we guarantee an improvement in service quality after 8 Oct?"
Another Joseph Then added, "History repeats itself. Price hikes always happens within 6 months after elections".
Some also wondered if taxi fares were next to go under review, while others raised the issue about the status of the ministerial salary review committee.
"The electrical tariff has increased. Now, the public transport fare hike and it will soon be followed by other items. On the other hand, until now there is no outcome of the ministerial salaries," wrote Yahoo! reader Patriot Wong.
On Friday morning, the PTC announced that from Oct 8, adult card fares for buses and trains will increase by 2 cents per journey.
Senior citizen concessionary fares will increase by 1 cent per journey. There will be no change to child and student concessionary card fares.
On average, the PTC said the fare hike works out to about a rise of 15 cents per week for 85 per cent of commuters.
The fare adjustment of 1 percent will mean that the transport operators stand to gain $15 million in extra revenue. If the council had decided to ward the full cap of 2.8 percent, they could have gain around S$43 million.
The changes which will take into effect on Oct 8 also coincides with the opening of the full Circle Line, which means commuters will only see one round of fare increases.
This comes after public transport operators SMRT and SBS Transit submitted their applications on July 11 to increase the total bus and rail fares collected by up to 2.8 per cent.
Presiding over the press briefing, the council’s chairman Gerard Ee said the decision not to award the full cap was made after taking into account concerns of commuters which includes inflation.
“Although the fare formula has indicated that the ceiling should 2.8 percent, but we are also aware in the recent months, in recent weeks, inflation has crept up.”
“We have been receiving feedbacks from commuters about various things, and we are hard pressed to say we should avoid the full 2.8 percent,” he said.
He added that by capping the fare increase at 1 percent for this year’s review, this would help to minimize the impact on commuters, although he acknowledged that any increase would affect the public.
Mr Ee noted that the increase is calculated using the annual fare adjustment formula recommended by the Government-appointed Fare Review Mechanism Committee, which it has adopted since 2005.
This formula takes into account the consumer price index, wage index and productivity gains.
The decision to grant the hike was also affected by factors such as the
positive economic outlook, with the GDP projecting to grow by 5 to 7 percent;
the low unemployment rate as of June this year; and the public transport
affordability indicator, which has been on a downward trend.
This indicates that transport fares have thus far remained affordable for majority of commuters.
Bus fares are set to increase in October. (Yahoo! file photo)
Benefits for senior citizens
The council said that this year’s fare review targets the senior citizen group, based on its growing number in the country.
From 8 Oct, senior citizen concession will be extended to full-day throughout the week. This means they will not be required to pay the adult fare if they choose to travel before 9am.
Based on the present fare system, if an elderly chooses to travel before 9am, he or she will be charged the full adult fare.
For instance, if the elderly travels by bus from Sembawang Road to Yishun MRT before travelling to Newton MRT, the fare would be $1.53.
With the extended concession hours, the elderly travelling via the same route will only be required to pay 87 cents, even if he or she travels before 9am.
Mr Ee said that this initiative will benefit the elderly since more of them are returning to employment and transport fares can take up quite an amount of their salary.
Operators had reasoned that their applications were due to the increasing operations costs, in spite of efforts to manage costs and increase productivity.
Other than cost pressures from fuel and energy prices, SBS Transit said it is spending S$268 million to purchase 600 new buses, scheduled for delivery in 2011 and 2012.
For the financial year 2011, SMRT's energy cost increased 17.5 per cent to S$122.4 million due mainly to higher electricity and diesel prices, as well as the expansion of the rail network with the opening of Circle Line Phase 1 and 2, said the operator.
Its manpower costs have also increased because of a 0.5 percentage point increase in employer CPF contribution rate to 15 per cent in September 2010 and to 15.5 per cent in March 2011.
SMRT also hired more staff because of the Circle Line opening and to operate additional train and bus trips. The operator introduced 420 extra train trips from March and increased the number of bus trips by 5.4 per cent.
Last year, SBS Transit posted a net of profit of S$54.3 million while SMRT had net earnings of $161.1 million for the financial year that ended this March.
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