Home News Featured News Here is why there should be no fare increase

Here is why there should be no fare increase




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By Eric Tan
I thought it would be fun to use our fearless leaders’ words to describe how we will react to a public transport fare hike.
However, I seriously believe that the government, PTC, LTA …etc should NOT grant the transport operators’ request for a fare rise for the following reasons:

  1. The operators received a subsidy or gift of S$1.1 billion from the government to buy buses
  2. The MRT continues to be plagued with operating problems such as breakdowns and delays. They cannot claim that the reason for the problems is that the trains are aging as even the new Circle line and recently opened Downtown lines have experienced break downs and delays.
  3. Commuters continue to suffer overcrowding and delays
  4. The MRT had many good years of rising profits in the past eight years, which we now know came about at the expense of maintenance. During those good years, they also had the good fortune of experiencing increased ridership due to our government’s liberal immigration policies.
    However, the commuters did not benefit from this increased revenue as the formula for fare increase then only took into account increases in the operating costs, not revenues. At the very least, we could have expected that when the commuters suffered overcrowding, they could have enjoyed the comfort of no fare increases. Since the operators now have to catch up with their maintenance costs, why should commuters have to pay for it again through the proposed fare increase? Operators should be accountable for their past mistakes and should not again be allowed a fare increase until they have sort out their current problems

I checked the latest quarterly financial statements of SBS Transit and SMRT and both companies reported increased revenues from their operations. SBS recorded a 7.4% increase in revenues with buses and rail recording 8.7% and 8.3% respectively. SMRT reported 5.3 % overall increase in revenues with trains and buses showing 3.9% and 2.9% respectively.
Both companies attributed the increase in revenues to increased ridership- what a great business to be in. However, both companies suffered from costs increasing more than revenues, resulting in a fall in profits. The good news is that there is still a profit. In their latest quarterly results, SBS made S$5.3 million operating profit while SMRT recorded $20 million operating profits ( to estimate annual operating profit multiply by 4 ). The absolute increase in costs was mostly from staff and maintenance which is within their control. Furthermore, we have not included the revenues from advertising and rentals of retail space, which is the icing on the cake.  In view of these facts, do you think they are entitled to a fare increase?

Whatever the conclusions you may arrive at, you would realise that there is a fundamental conflict with the current public transport system. When I was in the Workers’ Party, we had advocated nationalising the system since 2006 and I still maintain that belief more so now because of the evidence. Whatever way we want to debate this issue, it is quite clear that the current system is not working. Therefore let us ” fix” it by nationalising it so the government is in full control of it. They should take ownership and make it the best in the world again. After which we can figure out how best we can restructure it.
Eric Tan was the treasures of the Workers’ Party
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