SINGAPORE — While train reliability in the Republic is now on a level comparable with that of world class rail systems in Hong Kong and Taiwan, Singaporeans must be prepared to pay the cost for maintaining a reliable rail network, warned Transport Minister Khaw Boon Wan on Monday (8 July).
Responding to parliamentary questions on the current level of rail reliability, Khaw noted that increased reliability has come at “substantial expense” to both the operators and the government. However, train fares have not sufficiently increased in tandem, and rail operators are operating at a loss.
As a result, government subsidies have exceeded their “intended scope of funding”, said Khaw. Over the next five years, the government expects to spend $4.5 billion on operating subsidies, on top of a $25 billion outlay on civil infrastructure to build and equip new lines.
“It all comes at a cost. The question is: are commuters prepared to pay at such a high level of reliability?...If you want to achieve an even higher level of reliability, then one must be prepared to pay for more.”
The 66-year-old added to laughter from the House, “But because for various reasons, Singapore commuters are demanding...and are prepared to pay for that greater level of expense, well, we leave that to the next Transport Minister!”
Increased reliability comes at a cost
Khaw noted that the Mass Rapid Transit’s (MRT) Mean Kilometre Between Failures (MKBF), or the distance travelled between delays of at least five minutes, is now more than 950,000.
Hong Kong and Taiwan each consistently achieve an MKBF of more than 1 million.
The minister noted that the rail system’s MKBF has increased sevenfold since 2015; this is the result of a “concerted multi-year effort” that required “rigorous operations and maintenance” and “countless personal sacrifice” by thousands of public transport workers who worked day and night.
Between 2016 and 2017, the total cost of running the rail network increased by around $270 million, as rail operators have ramped up their operations and maintenance to support the increased level of reliability.
“As the fares paid by commuters do not cover operating costs, the rail companies are operating at a loss,” said Khaw, who noted that SMRT Trains and SBS Transit’s trains division has each incurred losses of tens of millions of dollars.
PTC fare formula must be consistently applied
The government has spent about $1.9 billion to take over ownership of all rail operating assets. This means it is now also responsible for the proper and timely renewal of these assets, which is a “huge and continuing financial liability”, said Khaw.
The Public Transport Council’s (PTC) fare formula, which is applied annually, is meant to keep fares in line with macroeconomic cost factors such as inflation and oil prices. Until recently, the PTC fare adjustments were not fully implemented.
“If we had strictly followed PTC’s fare formula, the operators would have been better able to cover the costs of the intensified maintenance. As it is, the additional costs have been partly covered by increased government subsidy and partly absorbed by the operators, who have been incurring substantial losses.”
Khaw added, “This is clearly not sustainable...we must have the discipline to implement the formula fully as we adjust fares over the next four years.”
“We have stabilised our MRT service but we have to sustain these efforts over the long term, in order to prevent problems from gradually building up again.”
More Parliament stories