Nov 12, 2013

    Concessions to cushion fare hikes

    COMMUTERS in Singapore can expect a hike in public-transport fares, which could kick in from the first half of next year.

    This was announced by Transport Minister Lui Tuck Yew in Parliament yesterday, who said that the Government has accepted all the recommendations made by the Fare Review Mechanism Committee last week.

    But public-transport fares "will not become less affordable for the average commuter", he stressed. And, for many, they may actually become cheaper.

    To provide assistance to the needy in the light of the impending fare increases, the Government will roll out and fund two concession schemes targeted at low-income workers and persons with disabilities.

    About half a million Singaporeans - constituting a 40 per cent increase in the 1.2 million commuters who currently enjoy various fare concessions to about 1.7 million - will be eligible for the schemes, said Mr Lui.

    While details of the schemes are still being ironed out, he said that he intends for the discounts to "more than offset any fare increase in the next fare exercise". He said that while the two schemes will be borne by the Government, existing ones will continue to be cross-subsidised by full-fare-paying commuters, so that "balance" is retained in the system.

    He was responding to a question raised by Member of Parliament Cedric Foo, who asked about the rationale behind having some schemes subsidised by the Government and others by full-fare-paying commuters.

    Mr Lui also said the fares would remain affordable. He said: "Wages over the past few years have gone up at a much faster rate than fares, which means that fares have actually become more affordable for the average commuter."

    Calling the new fare formula "an improvement", he said that it was "meticulously crafted to better reflect the cost pressures that the public-transport operators face".

    The minister also pointed out that fare increases here have been lower than those of comparable cities like Hong Kong and London.

    Fares in Hong Kong, for instance, have increased by a total of 13 per cent since 2009, while fares in Singapore have gone up by a cumulative 2.7 per cent from 2005 to 2011, he noted.

    This is despite "significant changes to the cost environment of the public-transport operators", Mr Lui said, citing the rise of diesel prices by about 90 per cent, as well as that of national average wages by about 30 per cent over the same period.

    He noted that the profits drawn by SMRT, which went down by 50 per cent within the last two financial years, have dipped a further 55 per cent so far this year.

    He said: "(The review) contains a timely reminder that we need to make regular fare adjustments from time to time to ensure that the (public-transport) system is sustainable and workable."