Bus & Train fares Hike; Really?

I think Singapore is the best nation in the world to handle public transport fare hike.

When the public transport system's total fare revenue will rise about $10.1 million, the transport operators will give up more than $30 million on an annual recurrent basis for transfer rebate.

Is that means a net lost of about $20 million to public transport operator?

The article from The Business Times
Published September 13, 2008

Net increase in annual fare revenue to come to $10.1m but operators to forgo $30m a year from rebate hike
By SAMUEL EE



BUS and train fares will rise 0.7 per cent - much less than the 3 per cent cap allowed under the fare adjustment formula for 2008, the Public Transport Council (PTC) said yesterday.


From Oct 1, there will be a flat increase of four cents per ride for adult ez-link fares on buses and trains. Adult cash fares will rise 10 cents across the board.

But for 92 per cent of bus and train journeys, the actual cost can range from a seven-cent reduction to a four-cent increase. The lower fares will result from a higher transfer rebate, which will be raised from the current 25 cents to 40 cents for adult ez-link fares. Of the 15-cent increase, the public transport operators will absorb 10 cents.

Commuters who transfer between buses, or between bus and MRT, get a transfer rebate on the fare paid when boarding the subsequent vehicle. This rebate is being increased so commuters only have to pay for the extra distance travelled, instead of being penalised for making a transfer journey that can be faster than a single direct trip. The aim of distance-based through-fares is to give patrons more route choices.

Based on the current pattern of journeys made using ez-link cards, the PTC said that 64 per cent of commuters will benefit directly from the transition to distance-based through-fares.

Two-thirds of this group will see no change or a reduction in their weekly public transport expenditure. The remainder will see an average increase of 18 cents a week, or about $10 a year. As a result of the overall net adjustment of 0.7 per cent, the public transport system's total fare revenue will rise about $10.1 million.

But the public transport operators will give up more than $30 million on an annual recurrent basis to absorb 10 cents of the 15-cent increase in the transfer rebate.

The PTC said that it considered the economic outlook and the affordability of public transport when reaching its decision. It said that the economy was growing at a slower pace of 4-5 per cent.

It added that the public transport affordability indicator has been on a downtrend for five years, falling from 7 per cent in 2003 to 6.2 per cent in 2007. This indicates that fares have remained affordable for most commuters.

To ensure that commuters' interests are safeguarded, the PTC looked at the public transport operators' Rota or return on total assets. In 2007, SBS Transit's Rota was 8.6 per cent, while SMRT's was 11.1 per cent.