One million commuters to benefit from enhanced and new fare concessions

PTOs to contribute $11.5 million to PT Fund to help needy commuters cope with fare increase

The Public Transport Council (PTC ) has decided to grant an overall fare adjustment of 3.2 per cent for the 2013 Fare Review Exercise. This is about half of the combined 2012 and 2013 fare caps of 6.6 per cent, with the remainder rolled over to the 2014 Fare Review Exercise, which would also have to take into consideration the 2014 fare adjustment quantum.

The PTC has also decided to implement in full all the recommendations proposed by the Fare Review Mechanism Committee (FRMC), noting that the Government has decided to likewise implement the two new Government-funded schemes for Persons with Disabilities (PWD ) and Lower-wage Workers (LWWs) .

In total, about a million commuters are expected to benefit from these enhanced and new fare concessions.

With effect from April 6, 2014, adult card fares for buses and trains will increase by 4 to 6 cents per journey .

Senior citizen concessionary fares will increase by 2 to 3 cents per journey, while student concessionary fares will increase by 2 cents per journey .

Cash fares for train and adult bus rides will increase by 20 cents per trip , while senior citizen and student concessionary cash fares for bus rides will increase by 10 cents per trip .

Commuters are strongly encouraged to use contactless smartcards , instead of paying cash fares, to enjoy lower fares.

In its deliberations, the PTC took guidance from the FRMC’s recommendations which were accepted by the Government in November 2013, including the new fare formula, fare review mechanism, and the monitoring of public transport affordability for the second quintile and second decile groups.

Central to these recommendations is the principle that fares should be kept affordable while ensuring the commercial viability and sustainability of the public transport operators.

Ensuring Fare Affordability

Bus and train fares have remained generally affordable for the second quintile households and second decile households, with the fare affordability indicator (FAI) continuing to show improvements. The FAI has improved from 3.7 per cent in 2003 to 2.6 per cent in 2012 for second quintile households, and from 5.3 per cent in 2003 to 4.1 per cent in 2012 for second decile households.

The PTC, in deciding on the 3.2 per cent fare increase for the 2013 Fare Exercise, noted that this is significantly lower than the 4 per cent-5 per cent wage increase in 2013 , and hence is keeping to the objective of ensuring that fares would remain generally affordable for commuters.

The PTC is also heartened to note that the 15 per cent fare reduction funded by the Government for lower-wage workers would result in a very significant improvement in the FAI for the second decile group.
Helping Commuters with Fare Concessions

The PTC decided to implement the following concession enhancements from April 6, 2014 to mitigate the impact of the fare increase on commuters:
i. Free travel for children below 7 years of age , before they enter primary school;
ii. Polytechnic students will now enjoy the same monthly concession pass prices as Secondary, Junior C ollege and ITE students , i.e. prices for Polytechnic monthly concession passes will be brought down by between 44 per cent and 47 per cent;
iii. All other student hybrid monthly concession passes will also see price reductions, of between 3 per cent and 12 per cent;
iv. Prices for NSF monthly concession passes will be lowered to be at the same price as University students, which is a reduction of between 10 per cent and 23 per cent;
v. A new monthly unlimited travel pass for adult Singaporean and permanent resident commuters (priced at $120) to help frequent public transport users cap their expenditures on public transport;
vi. A new monthly unlimited travel concession pass for senior citizens (priced at $60, a 50 per cent discount to the adult monthly travel pass) to provide additional help to senior citizens who are heavy users of public transport; and
vii. Removal of the daily limit on train rides for all train and hybrid monthly passes. This will bring it in line with the current unlimited rides allowed in the bus monthly pass.
In addition , student concessions will also be extended to Singaporeans studying full-time in private institutions offering secondary level and higher education registered with the Council for Private Education ( CPE). This will be implemented later in end 2014/early 2015, and more details will be released later.
Together, these concessions will benefit about half a million commuters. In addition, the Government has informed PTC of its proposals to introduce two new Government-funded schemes for Lower-wage Workers (LWWs) and Persons with Disability (PWD), which would benefit another about half a million

Sharing Gains with Needy Commuters

As part of the fare review exercise , public transport operators will be required to make a one-off contribution of a portion of the increased fare revenue to the Public Transport (PT) Fund, to help needy commuters cope with the fare increase. Having considered the financial situation of the PTOs, the PTC decided that SMRT and SBST should contribute respectively 25 per cent (i.e. $4.3m) and 20 per cent (i.e. $7.2m) of the increased fare revenue to the PT Fund for this exercise, or a total of $11.5m .

The PTC notes that the Government will utilise the PT Fund to provide additional help to lower-income households to mitigate the increase in their travel expenditure.

Balancing Viability of Bus and Train Modes

In line with the FRMC’s recommendation to allow more fare revenue to benefit the more financially ailing bus mode as compared to the rail mode, the weightage for revenue allocation will be set at 1.1 in favour of the bus mode. This translates to the bus mode receiving about $48m in fare increase and the rail mode $5.5m in this fare adjustment of 3.2 per cent.

This adjustment in relative weightage between the bus and rail modes does not affect commuters’ fares .

Mr Gerard Ee, Chairman of the PTC said, “In its deliberations, the Council took guidance from the new fare formula, fare review mechanism and other FRMC recommendations that were accepted by the Gove rnment recently. The approved fare adjustment of 3 .2 per cent is significantly less than the quantum of adjustment for which the operators had applied. We understand that any fare increase, no matter how modest, will impact commuters. In approving the increase and deciding on the quantum, the Council ensured that fares would continue to remain affordable.
“The various concession enhancements, which will benefit approximately half a million commuters, together with the two new Government-funded schemes which will benefit another about half a million more, will go a long way to ensure continued fare affordability. In addition, those who need more assistance will be able to receive help from the Public Transport Fund.”

Here is SMRT’s statement in response to the PTC’s decision on fare adjustment:

“We note the PTC’s decision. It has made an attempt to achieve a balance between public affordability and the increased level of operational costs associated with the delivery of a safe, reliable and commuter-centric transport system.

“SMRT supports the establishment of the Public Transport Fund to help ease the travel expenses of those in need. We are continuing with our contributions to fare concessions for the various commuter groups as determined by the PTC.”

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