Public transport fare hike is small compared to the increase in operating costs, analysts say

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SINGAPORE: The public transport fare hike should be viewed in the context of even higher operating costs, analysts said, following the Public Transport Council’s (PTC) latest fare review exercise.

Citing cost pressures and other challenges, public transport operators SBS Transit and SMRT Trains applied for the maximum fare adjustment of 22.6 per cent.

The 22.6 per cent figure comprises last year’s deferred increase of 10.6 per cent and this year’s adjustment of 12 per cent, which was driven by increases in energy prices, core inflation and strong wage growth.

However, the PTC decided on an overall fare increase of 7 per cent and deferred 15.6 per cent to future reviews of public transport fares.

“Given this backdrop, the 7 per cent is small,” said Assistant Professor Terence Fan of the Singapore Management University (SMU).

But he acknowledged that it may be a bit of a shock compared with previous years, which were usually below 5 per cent. Fares increased by 2.9 per cent last year.

Transport economist Walter Theseira said the PTC appears to have been guided by wage changes.

“As median wage increases last year were also quite high in nominal terms at 6.5 per cent (MOM total wage change figures) due to inflation, 7 per cent is actually comparable to that,” said the associate professor from the Singapore University of Social Sciences (SUSS).

Adult commuters will pay 10 to 11 cents more per journey from Dec 23.

PTC chair Janet Ang said the council wanted to keep fares affordable, while keeping the public transport system “financially sustainable”.

Assistant Professor Fan said between those two factors, the PTC is “veering very much towards the affordability side of things”.


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