Bus and train fare formula to be reviewed in Singapore

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How Singaporeans pay for buses and trains may be about to change now.

How Singaporeans pay for buses and trains may be about to change now. The Public Transport Council (PTC) has announced that it will review the formula and mechanism of public transport fares. The last time the formula was changed was after the last review in 2018. The bus and train fare formula review is part of a regular exercise that is done every five years.

What does the fare review involve?

The bus and train fare formula review exercise will be taking into consideration commuting patterns and the changes in the public transport industry. Before making any changes, PTC will consult public transport operators such as SMRT Corporation, SBS Transit, and others, the labour movement, and transport experts. The current fare formula accounts for inflation, energy prices, productivity, and network capacity.

In a press release, PTC said that it aims to complete the review by the first half of next year and apply the outcome of the review in next year’s fare review exercise.

PTC will also propose how to better maintain the balance to keep fares affordable while ensuring the financial sustainability of the public transport system.

How transport fares are calculated?

The current fare formula takes into consideration the core consumer price index, the wage index, and the energy index. The formula also measures the productivity of public transport operators and a component called the Network Capacity Factor (NCF).

Why does the fare formula review matter now?

The fare formula review is a regular process that happens every five years. However, it matters more now than ever before because the pandemic has introduced uncertainties and variables to public transport. Public ridership has fallen after Covid-19. Transport analysts will look at whether current ridership levels are now the “new normal” and cover the expenses for the transport system.

The other issue that the council will look into in the latest formula review is the operating cost structure of public transport and whether there is something more fundamental that needs to be changed.

As a leading transport operator in Singapore, SMRT plays a crucial role in maintaining the affordability and sustainability of the transport network. Commenting on the same, SMRT Chairman, Mr. Seah Moon Ming, said: “SMRT is not immune to the adverse economic effects of COVID-19. Financial sustainability is the key to ensuring that public transport operators can keep fares affordable and deliver quality services for commuters.”

Mr. Seah Moon Ming further added: “We will work closely with the authorities and the Public Transport Council to keep abreast of developments and policies that may affect fares for SMRT Trains and manage the risks accordingly.”

Conclusion

The Public Transport Council will work together with transport operators, analysts, and stakeholders to review the fare formula. The formula review is targeted to complete by the first half of 2023 only. So its results, and any changes, will be applied from the 2023 Fare Review Exercise.

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