Public Transport Fares To Be Increased As Rail Operators Operating At A Loss In Latest Financial Year

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If you’re just barely getting over the public transport fare review in 2018, here’s one thing you have to be prepared for.

It might increase again, at least if we’ve inferred correctly from what the Transport Minister said.

Fares Must Be Increased Because Subsidies Are Increasing

This is Transport Minister Khaw Boon Wan.

Image: YouTube

He’s the head honcho of the transport network in Singapore. And generally, whatever he’s said about transport here on the sunny island usually happens.

Except when it comes to the SG-KL HSR.

Now, he has a new message for Singaporeans: Public transport fares must increase.

Rail Companies in S’pore Making Losses

SMRT has made a loss of $86 million in the latest financial year report. SBS Transit’s train division also reported a loss of “tens of millions of dollars”.

Yet, on the other hand, the operating cost for running the total network in Singapore has increased by around $270 million.

Mr Khaw added that the increase in costs is largely caused by their efforts to reduce breakdowns.

Right now, the MRT network in Singapore is clocking “nearly one million-train-kilometres between delays”, a huge improvement from 2015.

Subsidies By Government At More Than 30%

The original agreement was for the government to fund the infrastructure and the first set of operating assets.

Then, the maintenance and replacement of these assets are to be funded fully by fares.

Do you have a friend who’s always smiling? Watch this video and you’ll know why he or she is always so happy:

But that’s not what is happening now.

The government, he notes, is expecting to pay $4.5 billion on operating subsidies in the next five years, on top of $25 billion for building new lines.

In other words, the game plan wasn’t working.

PTC Formula Must Be Fully Implemented

According to Mr Khaw, the fares paid by commuters do not cover operating costs. This is the result of our last public transport fare review back in 2018.

Image: PTC

The fare adjustments by the Public Transport Council (PTC) were not implemented “to the full extent of what the formula allowed” until recently.

He said that if they had “strictly followed” the formula, the operators would’ve been able to handle the costs of “intensified maintenance” better.

The current PTC formula is valid until 2023, and he assured the public that the government will continue following it.

“But we must have the discipline to implement the formula fully, as we adjust fares over the next four years,” he added.

What happens after 2023?

“The PTC will need to review the fare adjustment mechanism to reflect the increased operating cost to support the intensified maintenance, and the additional operating subsidies from the Government to the MRT system.”

At The End Of The Day

Mr Khaw pointed out that at the end of the day, money to support the system comes from two places: either the taxpayers (government subsidies) or the commuters (fares). In other words, either from all Singaporeans or just the users.

They’ve just got to “find a balance”.