While public transport fares will rise by seven per cent for adult commuters – the highest increase since 1998 – some Singaporeans have pointed out that the fare hike comes months after the profits of SBS Transit surged by a hefty 70 per cent to a record S$80 million.
The Public Transport Council (PTC) cited the increased costs of running public transport as one of the reasons for increasing fares and revealed that SBS Transit and SMRT applied for the seven per cent increase, which is the maximum allowable fare increase under this year’s fare review exercise.
Both operators cited rising costs due to maintenance expenses and the introduction of new rail lines in applying for the maximum fare increase.
PTC chairman Richard Magnus revealed that the fare hike would allow fare revenue to rise by about S$132.5 million, with SMRT Trains earning about S$40.2 million more in train revenue and SBS Transit Rail earning about S$18.8 million more while bus fare revenues increase by about S$73.5 million.
While some have said that it is unfair to push the burden of higher operating costs to commuters – especially since the higher costs may be caused by efforts to raise rail reliability in the wake of the many train breakdowns and service disruptions in recent years – others have noted that fare hike comes months after SBS Transit reported record-high profits.
In February this year, SBS Transit posted a 70 per cent surge in net profit to a record S$80.1 million and reported that revenue rose by 16.1 per cent to S$1.38 billion for the 12 months to 31 Dec 2018.
Although the ComfortDelGro subsidiary’s operating costs increased by 13.6 per cent to S$1.29 billion, the surge in profits saw earnings per share rising from 15.15 cents to 25.71 cents and the company’s directors recommended a final dividend of 7.1 cents to shareholders – close to twice the 3.95 cents final dividend that was paid out the previous year.
SBS Transit’s operational profits led total equity to rise by 10.9 per cent to S$498.4 million as of 31 Dec and its shares went up by 1.36 per cent to S$2.98 – the highest in over a decade. At the time, SBS Transit said that it expects public transport revenue to continue to grow.
In July, Transport Minister said that the PTC fare adjustments were not implemented to the full extent of what the formula allowed until recently and that rail operators SMRT and SBS Transit have lost millions due to the increased expenditure in running public transport. Asserting that “we must have the discipline to implement the formula fully,” he said:
“If we had strictly followed PTC’s fare formula, the operators would have been better able to cover the costs of the intensified maintenance. But we must have the discipline to implement the formula fully, as we adjust fares over the next four years.”
Singaporeans sharply criticised the Minister for making an assertion that the people need to compensate for the high operating costs especially when transport costs rose to improve public transport reliability due to recent debacles and the Government’s efforts to raise rail reliability in the wake of the many train breakdowns and service disruptions in recent years. -/TISG