Helping pay for a better ride

A fare hike for buses and trains is very much on the cards, going by the words of two key stakeholders.

As the Public Transport Council announced a review of the fare formula last Wednesday, chairman Richard Magnus wrote that “service improvements come at a cost”.

His words echoed Transport Minister Khaw Boon Wan’s in Parliament last month that it was not sustainable for taxpayers to increasingly subsidise the costs of running Singapore’s public transport system.

Commuters should be prepared for the likelihood of the revised formula – which will be used next year – having a component to pass to them some of the load which taxpayers are bearing to boost public transport service standards and reliability.

What is being spent to improve public transport over the next five years is no small change – close to $4 billion will go to subsidising public bus services and another $4 billion to replacing ageing rail assets. This is on top of $20 billion that the Government has committed to build more infrastructure.

However, new or upgraded infrastructure will mean nothing to commuters if it does not translate into a better ride for them.

Tracking service quality – which includes reliability and frequency – is a parameter that is lacking in the current fare formula.

The formula, which has been used since 2013, largely takes into account public transport operators’ costs and expected profitability.

And while a fare hike is on the horizon, it is vital that public transportation remains accessible to all.

When fare increases took place in 2014 and 2015, transport operators had to contribute a percentage of their revenue gains to a Public Transport Fund. From there, vouchers were distributed to low-income households for use on public transport.

Under the bus contracting model, the Government now retains all the fare revenue in the bus industry, and thus any gains from a hike.

Even under this model, contributions to the fund must be instituted to support needy commuters.