Ong Ye Kung: Train fares so far are not enough to cover operating costs

Singapore – While the government will continue to subsidise rail and bus operations, the bill to taxpayers “cannot keep ballooning,” said Transport Minister Ong Ye Kung, noting fares also need to be adjusted.

Speaking in Parliament during his ministry’s Committee of Supply debate on Friday (Mar 5), Mr Ong said that steps must be taken to manage the public transport system’s long-term financial sustainability.

This means that bus and rail operators would have to find new ways to be cost-efficient while keeping services reliable, said Mr Ong as quoted by todayonline.com. They (bus and rail operators) should not try to penny-pinch on maintenance cost, thinking it will translate to savings, he added.

Furthermore, public transport fares will need to be adjusted from time to time as this is required when costs go up, including the wages of public transport workers who look forward to earning more, he said.

“Train fares so far are not enough to cover these operating costs,” said Mr Ong. He added that the situation is the same for buses.

To subsidise rail and bus operations, Mr Ong highlighted that the government spends about S$1 billion a year for each sector.

“The Government needs to continue to subsidise the operations of the MRT and buses. We can’t run away from that. But the bill to taxpayers cannot keep ballooning. If it does, we would leave our future generations a growing financial burden.”

Mr Ong added that they will be reviewing the financial framework for the Downtown Line which is operated by SBS Transit.

“If ridership is healthy and fare revenue far exceeds operating cost, they get to enjoy a good part of the profit. But if the reverse is true, they bear the loss,” he said in a businesstimes.com.sg report.

Mr Ong noted that the Downtown Line arrangement will be reviewed “given that it is still on NRFF (New Rail Financing Framework) version one, and this will be done with a view to ensure that the operator will run the line reliably with high productivity. And that (the) line is sustainable.”

On top of adjusting fares and nudging operators, the government will also aim to cut excess capacity, such as bus services operating parallel to new train lines.

Tens of millions of dollars in operating subsidies for each service each year would go towards running these buses if the excess capacity is not terminated, he said./TISG

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