SBS Transit, SMRT apply for fare increases

Alicia Wong


Public transport operators SMRT and SBS Transit are seeking a maximum 2.8 per cent bus and rail fare increase. (Yahoo! Photo)

Public transport operators SMRT and SBS Transit are seeking to increase the total bus and rail fares collected by up to 2.8 per cent.

Both operators submitted their applications for fare adjustment to the Public Transport Council (PTC) on Monday. The increase is calculated using the annual fare adjustment formula recommended by the Government-appointed Fare Review Mechanism Committee.

The formula takes into account the consumer price index, wage index and productivity gains.

Operators said they continue to face increasing 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.

The operator has purchased a total of 2,050 new buses since 2006 as part of its fleet renewal exercise. The buses cost about S$854 million, said SBS Transit.

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.

SMRT's executive vice president for trains Khoo Hean Siang said, its productivity gains from commercial activities like retail rentals have been shared with commuters as it lowers the maximum allowable fare adjustment.

"However, with uncontrollable cost increases due to rising fuel prices and manpower costs, we have applied for the maximum fare adjustment of 2.8 per cent, which if approved will help mitigate the cost increases," said Khoo.

"Nevertheless, our commuters can rest assured that SMRT remains committed to continue providing the best service possible for them."

PTC chairman Gerard Ee confirmed the PTC has received the applications and will be looking into it.

In January, the PTC announced the deferment of this year's fare review exercise to the fourth quarter of 2011 to coincide with the opening of Phases 4 and 5 of the Circle Line.

Writing on her Facebook page, Member of Parliament Denise Phua said, "I am concerned that the transport operators are asking for permission from the PTC for fare increase."

While there are good reasons like the rise in operating costs, Phua suggested that it could be time for stakeholders to "deeply study the underlying assumptions on how this industry is structured and how prices are fixed and applied".

"Yes, I have heard that public transport is best run by private operators (for efficiency and cost management) but can there be better hybrid systems which might work better than today's?" she questioned.

"Would a third-alternative system be possible to provide even more incentives especially to Singaporeans not just to relieve their cost of living; but also in applying the principle that membership (being Singaporean) has its privileges" she added.