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     Bus and train fares to increase by between 1 and 3 cents

Continued from FrontPage of Article

FACT SHEET

Fare adjustment formula caps fare increase below increase in operating costs

Maximum fare adjustment = [Price Index 每 0.3%]

Price Index = 0.5CPI + 0.5WI;

0.3% : productivity extraction set for 2005 to 2007.

CPI: the change in Consumer Price Index over preceding year; 0.5% in 2005.

Wage Index (WI) : the change in Average Monthly Earnings (Annual National Average) over the preceding year, adjusted to account for any change in the employer*s CPF contribution rate; 3.5% in 2005.

1. The Public Transport Council (PTC), in deciding whether to grant a fare increase this year, would look at the fare adjustment formula (Price Index 每 0.3%) which is 1.7% for 2006.

2. This fare adjustment formula protects the interests of commuters by capping the increase at a level lower than the cost increases experienced by the operators. This is done via a productivity extraction (0.3%) where operators share their productivity gains with the commuters. This is also to encourage the operators to become more efficient in their operations if they want to maintain their profitability.

PTC checks on overall economic outlook, affordability and operators* profitability

PTC considers:

GDP growth forecast: 6.5 每 7.5% - revised upwards from 5-7% given the strong growth in the first half of 2006

Unemployment rate: 2.9% in June 2006 - lower than the unemployment rate for the past 4 years (2002: 3.6%; 2003: 4.0%; 2004: 3.4%; 2005: 3.1%)

ROTAs of operators: 6.5% (SBST) and 9.1% (SMRT) for 2005.

Public Transport Affordability Index =

Monthly Expenditure on Public Transport
Monthly Household Income

Affordability Indicator: 6.6% in 2005 - improvement from 6.8% in 2004 and 7.0% in 2003.

The impact on the Public Transport Affordability Index under the following wage growth scenarios and 1.7% increase in fares: 1% increase in wages: 6.7%

2% increase in wages: 6.6%

3% increase in wages: 6.6%

4% increase in wages: 6.5%

3. The PTC will have to take into account overall economic conditions, the affordability of public transport fares and the operators* profitability when deciding whether or not to allow fare increases.

4. The current economic outlook is positive, with the full year GDP growth forecast for 2006 having been revised upwards to 6.5% - 7.5%. The unemployment rate has also come down to an estimated 2.9% in June 2006, the lowest in the last 4 years.

5. The PTC has assessed that there are no extenuating circumstances that require the PTC to either vary the fare adjustment quantum determined by the fare adjustment formula or to reject it.

6. Even with the fare increase granted this year, fares are likely to stay affordable with a likely increase in general wage levels. The average wage growth for 2005 was 3.5%, and 3.0% for the 1st quarter of 2006. Affordability is also maintained by the fact that child/student fares and prices of concession passes will remain unchanged.

7. The PTC also made a reality check on public transport operators* (PTOs) ROTA (Return on Total Assets) to further ensure that commuters* interests are protected. The ROTAs (for bus and train operations) are 6.5% for SBST and 9.1% for SMRT[3] based on their proforma accounts[4]. While the ROTAs can be considered to be healthy, it would be difficult to make a case that they are excessive, when compared with companies with similar industry structure and risk profiles.

ROTA of SBST and SMRT

 

 

2003

2004

2005

SBST (Bus & Rail)

2.1%

4.6%

6.5%

SMRT (Bus & Rail)

5.1%

6.0%

9.1%

Notes:

            ROTA = Net Profit after tax/Total Assets

            These are based on proforma statements which are submitted to the PTC. They may be different from the ROTA values derived using published accounts of the holding company.

Some examples of ROTA of other companies

      Local Companies 每 Singapore Post (17.4%), SembCorp Industries (5.7%)

      Overseas Transport Operators 每 Transport International Holdings Limited (6.2%) in Hong Kong, Stagecoach Group PLC (9.0%) in the UK, FirstGroup PLC (5.6%) in Europe, Canadian National Railway Company (7.0%) in the US and Canada, Mass Transit Railway Corporation (7.4%) in Hong Kong.

Impact of fare increase on commuters

8. About a quarter of all commuters do not see fare increases. Those paying cash fares, single trip tickets on trains, children/students who pay concession fares and those with monthly concession passes (students and NS men) do not face fare increases. \

9. Of the commuters affected by fare increase, 3 in 4 of them take direct journeys on either bus or train. The Adult EZ-Link fares for such journeys will increase by at most 3 cents.

For example, an MRT journey from Ang Mo Kio to Raffles Place MRT station which currently costs $1.26 will also see a 2-cent increase from 1 October.

10. Among commuters who have to make a transfer (1 in 4 commuters), most require one transfer, say from a bus to the MRT or to another trunk bus. The majority of such journeys will see a fare increase of 3 to 4 cents.

For example, a commuter who travels via a feeder bus to Ang Mo Kio MRT station and takes the train to Tanjong Pagar MRT station currently pays $1.70[5]. From 1 October, the commuter would see an increase of 3 cents (a 1-cent increase for feeder bus fare and a 2-cent increase for MRT).

Comparison of average bus and rail fares across cities

City

Average

Bus Fare

Average

Train Fare

Average

Bus Fare

(PPP adjusted)*

Average

Train Fare

(PPP adjusted)*

Singapore#

S$ 0.66

S$ 0.94

S$ 0.66

S$ 0.94

Hong Kong

S$ 1.21

S$ 1.53

S$ 1.29

S$ 1.63

London

S$ 1.40

S$ 3.75

S$ 1.03

S$ 2.76

NewYork City

S$ 1.50

S$ 2.38

S$ 1.42

S$ 2.26

Data source: Annual reports of SMRT & SBST (Singapore), MTR & SMB (Hong Kong), MTA New York City, London Travel Report, US Federal Reserve (Exchange Rate).

*Adjusted using the 2002 Purchasing Power Parity (PPP) Conversion Factor[6] published by the World Bank

# Based on 2005 (current) fares. Average fare = total fare revenue / total number of trips

Annex A

 

MAXIMUM BUS FARES FOR BASIC BUS SERVICES

(w.e.f. 1 October 2006)

 

a)    Adult Fare Structure (Aircon Trunk Services)

Distance Travelled

 

Fare Per Ride (cent)

Ez-link Card

Cash

Current

Approved

Change

Current

No Change

4 or less fare stages

64

65

1

90

4.5 每 7 fare stages

85

87

2

110

7.5 每 10 fare stages

105

108

3

130

10.5 每 13 fare stages

115

118

140

13.5 每 18 fare stages

125

128

150

18.5 每 23 fare stages

135

138

160

23.5 每 29 fare stages

145

148

170

29.5 and more fare stages

155

158

180

 

 

Transfer Rebate

25 (No change)

NA

b)    Adult Fare Structure (Non-Aircon Trunk Services)

Distance Travelled

 

Fare Per Ride (cent)

Ez-link Card

Cash

Current

Approved

Change

Current

No Change

4 or less fare stages

59

60

1

80

4.5 每 7 fare stages

70

72

2

90

7.5 每 10 fare stages

80

83

3

100

10.5 每 13 fare stages

90

93

110

13.5 每 18 fare stages

100

103

120

18.5 每 23 fare stages

110

113

130

23.5 每 29 fare stages

120

123

140

29.5 and more fare stages

130

133

150

 

 

Transfer Rebate

25 (No change)

NA

c)    Adult Fare Structure (Residential Feeder Services)

Type of Bus

 

Fare Per Ride (cent)

Ez-link Card

Cash

Current

Approved

Change

Current

Approved

Change

Non-Aircon

59

60

1

80

No Change

Aircon

64

65

90

 

 

Transfer Rebate

25 (No change)

NA

d)    Jurong Industrial Services Fare Structure

Distance Travelled

 

Fare Per Ride (cent)

Ez-link Card

Cash

Current

Approved

Change

Current

No Change

4 or less fare stages

59

60

1

80

4.5 每 7 fare stages

70

72

2

90

7.5 每 10 fare stages

80

83

3

100

10.5 每 13 fare stages

90

93

110

13.5 and more fare stages

100

103

120

 

 

Transfer Rebate

25 (No change)

NA

e)           Senior Citizen Concession Fares

Type of Bus

 

Fare Per Ride (cent)

Ez-link Card

Cash

Current

Approved

Change

Current

No Change

Non-Aircon

59

60

1

80

Aircon

64

65

90

 

 

Transfer Rebate

25 (No change)

NA

f)     Child/Student Fare Structure

Type of Bus

Fare Per Ride (cent)

Ez-link Card

Cash

Non-Aircon

40

No change

45

No change

Aircon

45

55

 

 

Transfer Rebate

10 (No change)

NA

g)       Monthly Concession Passes

 

Type of Cardholders

Aircon

Primary Student

$22.50

No change

Secondary Student

$27.50

Tertiary Student

$52.00

Full-time National Serviceman

$61.00

MAXIMUM TRAIN FARES (w.e.f. 1 October 2006)

 

a)                 MRT Adult Fare Structure (North-East Line)

Distance Travelled

 

Fare Per Ride (cent)

Ez-link Card

Single Trip Ticket

Current

Approved

Change

Current

No Change

Up to 1.0 km

70

71

1

100

1.01 to 2.0 km

75

76

100

2.01 to 3.2 km

80

81

110

3.21 km to 4.4 km

91

93

2

130

4.41 km to 5.6 km

101

103

130

5.61 km to 6.4 km

111

113

150

6.41 km to 7.2 km

121

123

150

7.21 km to 8.0 km

131

133

150

8.01 km to 10.4 km

141

143

150

10.41 km to 12.4 km

151

153

170

12.41 km to 14.4 km

156

158

170

14.41 km to 16.5 km

162

164

170

16.51 km to 18.6 km

167

169

170

18.61 km to 20.0 km

172

175

3

190

 

 

Transfer Rebate

25 (No change)

NA

b)    MRT Adult Fare Structure (North-South and East-West Lines) 

Distance Travelled

Fare Per Ride (cent)

Ez-link Card

Single Trip Ticket

Current

Approved

Change

Current

No Change

Up to 3.2 km

65

66

1

90

3.21 km to 4.4 km

76

78

2

110

4.41 km to 5.6 km

86

88

110

5.61 km to 7.2 km

96

98

130

7.21 km to 8.0 km

106

108

130

8.01 km to 10.4 km

116

118

130

10.41 km to 12.41 km

126

128

150

12.41 km to 14.4 km

131

133

150

14.41 km to 16.5 km

137

139

150

16.51 km to 18.6 km

142

144

150

18.61 km to 21.1 km

147

150

3

170

21.11 km to 23.6 km

152

155

170

23.61 km to 26.0 km

157

160

170

26.01 km to 28.0 km

162

165

190

28.01 km to 30.0 km

167

170

190

Over 30.0 km

172

175

190

 

 

Transfer Rebate

25 (No change)

NA

c)    LRT Adult Fare Structure (Bukit Panjang and Punggol) 

Number of Stations

Fare Per Ride (cent)

Ez-link Card

Single Trip Ticket

Current

Approved

Change

Current

No Change

1 每 5

65

66

1

90

6 每 7

76

78

2

100

8 每 9

86

88

110

 

 

Transfer Rebate

25 (No change)

NA

d)    LRT Adult Fare Structure (Sengkang)

Number of Stations

Fare Per Ride (cent)

Ez-link Card

Single Trip Ticket

Current

Approved

Change

Current

No Change

1 每 4

65

66

1

90

5

76

78

2

100

6 每 7

86

88

110

 

 

Transfer Rebate

25 (No change)

NA

e)    Senior Citizen Concession Fares 

Description

Ez-link Card Fare Per Ride (cent)

Current

Approved

Change

North-South and East-West Lines

65

66

1

BPLRT, SKLRT and PGLRT

65

66

North-East Line

70

71

 

 

Transfer Rebate

25 (No change)

f)     Child/Student Fare Structure 

Distance Travelled

Ez-link Card Fare Per Ride (cent)

Up to 5.6 km

40

No change

5.61 km to 14.4 km

45

Over 14.4 km

50

 

 

Transfer Rebate

10 (No change)

g)    Monthly Concession Tickets 

Type of Cardholders

Current

Primary Student

$20

No change

Secondary Student

$25

Tertiary Student

$45

Full-time National Serviceman

$50

Public Transport Council

12 Sept 2006

[1] MTI revised the full year real GDP growth estimates upwards from 5% - 7% to 6.5% - 7.5% given the strong growth in the 1st half of 2006, barring any economic shocks.

[2] MOM*s seasonally adjusted unemployment rates from 2002 to 2005 are: 3.6%, 4.0%, 3.4% and 3.1%. The 2.9% unemployment rate estimated for June 2006 is lower than the unemployment rate for the past 4 years.

[3] The ROTA figures are for the financial year ended in December 2005 (for SBST) or March 2006 (for SMRT).

[4] The proforma accounts reflect the bus and train operations of SBST and SMRT conducted in Singapore, which exclude exceptional items and non-transport activities. 

[5] This consists 64 cents for feeder bus; $1.31 for MRT and a transfer rebate of 25 cents is deducted.

[6] The PPP is the rate of currency conversion at which a given amount of currency will purchase the same volume of goods and services in two countries.  Another way of looking at the PPP is that when it is used as a currency converter, the price level is the same in both countries.

Source: www.mot.gov.sg Press Release 12 Sep 2006