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SINGAPORE: There will be no changes to public transport fares in light of COVID-19 and its impact on the economy, the Public Transport Council (PTC) said on Friday (September 4) after its annual fare review exercise. .
The two transport operators here, SMRT and SBS Transit, had requested the maximum increase of 4.4 percent, the PTC said, adding that it decided not to grant any fare adjustments.
“With this decision, the full amount of the rate adjustment will be transferred to the next FRE (rate review exercise) in 2021,” it said in a press release.
The PTC added that it will continue to “closely monitor macroeconomic indices and prevailing economic conditions.”
“In making its decision for 2021 FRE, the council will also continue to balance fee affordability and financial sustainability,” it said in a press release.
In last year’s fare review, bus and train fares increased 7 percent.
Members of the Public Transportation Council speaking at a virtual press conference on September 4, 2020 (Photo: Public Transportation Council)
“We recognize the exceptional economic circumstances that Singaporeans face and have decided to keep bus and train fares unchanged to help ease the financial burden on commuters during this challenging period,” said PTC President Richard Magnus.
He added that beyond the freeze on rate increases, the council will closely monitor developments in the COVID-19 situation and the impact on Singaporeans.
“Our priority will be to safeguard the interests of travelers, while ensuring a financially sustainable public transport system that continues to meet the needs of Singaporeans for years to come,” he said.
Magnus noted that if the COVID-19 crisis continues into next year, this would likely affect macroeconomic indices that influence rates, such as falling wages and oil prices.
“I highly doubt that we will see a rate increase (if current conditions continue),” he said.
READ: Traveling or Telecommuting: How COVID-19 Could Affect Public Transportation Costs in Singapore
IMPACT ON PUBLIC TRANSPORT OPERATORS
The decision not to adjust fares was made despite the impact of COVID-19 on public transport operators here, the council said, citing the reduction in passengers and the need to intensify cleaning routines.
SBS Transit, which operates the Northeast and Central lines, cited losses in its rail operations, as well as “significant cost pressures” in areas such as labor and repairs and maintenance.
“In its final financial year, SBS Transit’s rail segment reported a loss of tens of millions of dollars,” the council said.
Meanwhile, SMRT, which operates the North-South, East-West, Circle and Thomson-East Coast lines, noted “increasing costs to operate an expanding train network with higher O&M demands”, as well as additional costs for ensure a safe transit environment in light of the pandemic.
“For its final financial year ending in March 2020, SMRT Trains posted a net loss of around S $ 20 million after tax,” the council said.
READ: Additional costs incurred by public transport operators due to COVID-19 not ‘adequately covered’ by fares: Khaw Boon Wan
Despite the drastic drop in passenger numbers throughout the day by around 75 percent during the April-June 2020 circuit breaker, public transportation operators continued to operate trains and buses primarily on pre-COVID frequencies, to help passengers get to their destinations safely and smoothly, ”said the PTC.
Maintaining the frequency of buses and trains, as well as improving cleaning routines to cope with the coronavirus outbreak, came at a “significant cost” to operators amid falling fare revenues, he noted.
Former Transport Minister Khaw Boon Wan had said in May that revenue from fares plunged 80 percent during the switch period.
On Friday, the council noted that prior to the outbreak, the Government was expected to spend nearly S $ 1 billion to renovate and upgrade operational railway assets, and another S $ 1 billion to subsidize public bus services annually for the next several years. five years. This translates to more than S $ 1 in subsidies for each trip made, he added.
“With the impact of COVID-19, revenues have fallen even more and we expect government subsidies to be even higher this year,” he said.
READ: S $ 60 billion for rail network expansion and renovation over the next decade – Khaw Boon Wan
MID-PERIOD REVIEW OF THE RATE FORMULA
The current rate adjustment formula, which will run until 2022, takes into account factors such as energy prices and inflation, as well as the Network Capacity Factor (NCF), which compares the number of passengers with the capacity. of the aggregate network.
The council said, however, that the NCF was not designed for “exceptional circumstances” such as the sustained drop in passenger numbers due to COVID-19.
“Therefore, PTC will conduct a mid-term review on how the NCF should be applied, or if it should be partially or totally excluded, when considering its effect on next year’s rate adjustment,” he said, adding that the review would be completed before next year’s exercise.
Noting developments such as the expansion of the rail network and the “significant operating subsidies” provided by authorities, the PTC said the review is timely to ensure that the rate adjustment formula remains “relevant and responsive.”
READ: Public transport fare formula to take into account the growth of the transport network
CONCESSIONS REMAIN UNCHANGED
The Transport Ministry (MOT) said separately that it has accepted the PTC’s recommendation and that it will not adjust rates for low-wage workers and people with disabilities either.
Low-wage workers will continue to get up to 25 percent off adult rates.
People with disabilities will continue to have their rates pegged to seniors, at 55 percent of adult rates, and the price of their monthly concession passes will not change by S $ 64.
MOT also said the deadline to apply for public transportation vouchers will be extended from October 1 to January 1 of next year, allowing eligible households more time to apply at community centers and community clubs.
Each coupon is worth S $ 50 and can be used to reload rate cards or purchase monthly concession passes. Households are eligible to apply for a voucher if their monthly household income from all sources per person does not exceed S $ 1200.
Approximately 30,000 low-income households under ComCare’s Short-to-Medium-Term Assistance and Long-Term Assistance schemes will not need to apply as they will automatically qualify for the vouchers.
These households will receive coupon redemption letters in the mail.
The first group of households, made up of beneficiaries of both schemes as of August 31, will receive their letters from the beginning of December.
The second group, the beneficiaries of both schemes as of January 31 who did not receive their coupons in the previous tranche, will receive their letters from mid-March 2021.
