We could hear hoards of angry mobs causing a furore when it was announced that public transportation fares may go up by 7% by year-end.
Thomas even said he had never seen such bullshit before.
Before you lunge at your colleague in frustration and contempt, I implore you to put your pitchforks down. LTA might’ve had a valid reason to have to implement this:
LTA Is $1 Billion In Debt
Yes, the Land Transport Authority (LTA) is $1 Billion in debt.
Wait, what? I thought they were rolling in the dough.
Well, apparently not.
According to The Straits Times, public bus operations have incurred “losses” amounting to $1 billion in the 2018/2019 financial year. This was revealed in the latest annual report released by the LTA.
Let’s break the figures down:
The revenue LTA received from bus fares was $834 million and “other income” was $78 million. This totals to $912 million in operating income.
However, expenditure came up to $1.925 billion. As a result, there was a deficit of around $1 billion. To give you a comparison, this amount is 50% higher than five years ago. In the private sector, this shortfall would translate to losses, and your goody friends would be retrenched.
Fares Are ‘Far Below’ Cost Of Govt Contracts
If it isn’t already obvious, the reason is that fares are “far below” the cost of government contracts.
Lest you’re unaware, here’s a little explanation as to how government contracts work:
- The government owns all assets and collects fare revenue.
- Transport firms bid or negotiate to run route parcels for a fixed sum over a fixed period.
The Ministry of Transport told The Straits Times that despite the widening deficit, Singapore ranked second-lowest in terms of cost in a 2018 comparative study done by Nanyang Technological University (NTU).
The study found that Singapore buses cost four cents per place-km. This was higher than Hong Kong’s 2.3 cents, but lower than western cities like London, Toronto and New York.
However, it may be worthwhile to note that the study didn’t include other Asian cities such as Taipei, Seoul and Tokyo.
According to Singapore University of Social Sciences (SUSS) transport economist Walter Theseira, “Now the real question is whether the price LTA is paying for bus services today is the lowest it can go, for the level of service quality desired.”
True and true. Want a more efficient public transport system? Pay more lor.
Here’s the REAL reason why everyone is hanging plushies on their bags, simplified for you:
