SINGAPORE: SBS and SMRT both reported higher profits this year.

So why will bus and train fares go up more than ever before? asked a commuter in the United Singaporean Facebook Group.

Bus and train fares will go up by 11 cents from Dec 23, generating more revenue for the. transport operators.

SBS Group reported a S$68 million profit attributable to shareholders in 2022, up from S$51.6 million in 2021, on S$1,515.3 million in revenue, and SMRT Trains reported a S$42.5 million profit after tax in the financial year 2023, up from S$11.2 million in 2022, on S$813.2 million in revenue.

According to their annual reports, these are big, profitable companies, but they need to charge higher fares. That’s the view of industry observers.

The Public Transport Council, which regulates fares in Singapore, sanctioned a seven per cent increase. This is the highest fare hike since 2019, when fares increased by seven per cent, and commuters had to pay up to nine more cents.

But the transport operators this year wanted even more. They applied for a 22.6 per cent hike, citing higher energy prices, a competitive labour market, and a slow and uncertain recovery in ridership.

And they were eligible for a 22.6 per cent hike under the fare adjustment formula, said the Public Transport Council (PTC) in a news release. They could have got a 12 per cent hike this year because of rising energy prices, core inflation and strong wage growth in 2022. And they could have got an additional 10.6 per cent deferred from the 2022 fare review exercise when they were allowed only a 2.9 per cent hike.

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But the PTC instead sanctioned a 7 per cent increase this year to keep “public transport fares affordable”.

More hikes to come

However, fares will go up again.

The PTC didn’t dismiss the operators’ demand for a 22.6 per cent fare increase. It merely deferred the hike.

This was confirmed by PTC chair Janet Ang and chief executive Tan Kim Hong at a press conference.

“We will ensure that public transport remains affordable for commuters, but we seek commuters’ understanding that the fare increase is necessary to meet rising costs and ensure that we can continue to provide better salaries and training for about 22,000 public transport workers,” said Ms Ang.

The PTC says public transport remains affordable.

It says the average public transport user spends 1.7 per cent of their monthly household income on transport, while lower-income households spend 2.4 per cent.

“The fare hike is small compared to the increase in operating costs, analysts say,” reported Channel NewsAsia without going into figures.

Incidentally, passenger fares are not the only source of funds for the transport operators. They also receive government subsidies.

The Government subsidises them to the tune of more than S$2 billion a year. And they will get an additional S$300 million from the Government this year because they have not been granted a bigger fare hike.

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Concessions for low-wage workers, seniors, national servicemen and students

The Government will also introduce a monthly hybrid – bus and train – concession travel pass for low-wage workers costing $96 from Dec 23. This is $32 less than the price of adult monthly travel passes, which will remain unchanged at $128.

Monthly hybrid travel passes for seniors, national servicemen and students will be up to 10 per cent cheaper, costing S$4.50 to $9.50 less than now.

The cost of a monthly concession pass for those with disabilities will also be reduced from $64 to $58 – the same as that for seniors.

The changes to the monthly concession passes will benefit about 60,000 existing and expected new monthly pass holders.

SBS and SMRT contributions to Public Transport Fund

SBS Transit and SMRT Trains will also have to make a bigger contribution to the Public Transport Fund.

The PTC has decided that SBS Transit should contribute 15 per cent and SMRT Trains 30 per cent of their expected increase in revenue – a total of S$15.85 million ($3.14 million and $12.71 million respectively) – to the fund.

The PTC has recommended that the Government draw on the fund to provide further assistance to lower-income resident households in the form of public transport vouchers.

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The fare hike comes as the public transport network — the MRT in particular — is expanding. The Thomson-East Coast Line opened in January 2020. The North East Line, Circle Line and Downtown Line are all being expanded. New transport operators, for example, Tower Transit and Go-Ahead Singapore, have also arrived on the scene.

Previous fare hikes

Last year, the 2.9 per cent fare hike followed two years of unchanged fares. Fares did not go up in 2020, the year of the general election, and 2021. The PTC did not raise fares then because it recognised that Singaporeans had been through a difficult time during the COVID-19 pandemic and wanted to help them.

However, the seven per cent fare hike in 2019 was the biggest till then. Fares went up by up to nine cents as a result.

Fares went up in 2018, too — by six cents.

But that followed three years of fare reductions. Those were the days!

Or were they?

One may not want to go back to income levels back then.

The Singapore Department of Statistics website says the median monthly household income from work, including employer CPF contributions, was S$10,099 in 2022, up from S$9,023 in 2017 and S$8,846 in 2016.

Public Transport Council Chief Exec outrightly says more fare hikes in next few years to come, as fees for adults increase from December