Transport Minister Khaw Boon Wan, through his Public Transport Council (PTC), today announced that fares will be raised by the third quarter of this year, according to a new formula they came out with. The existing formula which factors in oil prices pointed to a reduction of fares, which the Transport Minister claimed is “unfair” to the government:
“Their introduction of the “Network Capacity Factor” is sensible. As the network expands or intensifies in response to changing commuter demand, it impacts the financial sustainability of the transport system. When changes are significant, some adjustments to fares, whether upwards or downwards, will ensure fairness between taxpayers and commuters.”
This is the latest government-initiated inflation following a number of tax increases in 2018, and an impending GST increase.
The PTC protested against a reduction in fares and placed in a new formula component that will include train network capacity as a cost factor in fares:
“With the addition of new lines, the rail network has lengthened by 74km. While these were welcomed by commuters, they come at a cost…Meanwhile, fares have fallen over the past three years mainly due to lower energy prices. The Government has stepped in to provide substantial subsidies.”
The number of train breakdowns and rail reliability will be omitted from the fare calculation, which many Singaporeans pointed out why are they paying more money for lousier services.
In Feb 2018, SBS Transit posted a 50% rise in profit after a 4.2% fare hike last year. SMRT was nationalised by Temasek Holdings in 2016, and it has since stopped reporting on the amount of profits it is making.