About 2 million concession card holders will also face a lower increase of 4 cents per journey after the new fares are implemented.
PTC said for the 2024 Fare Review Exercise (FRE), the output from the fare adjustment formula is 3.3 percent. The formula output was driven by core inflation and wage growth in 2023, and partially moderated by a decrease in energy prices from a peak in 2022.
Over the past two years, the PTC had moderated the fare increase to reduce the impact on commuters, despite sustained increases in the operating costs of public transport. This has led to a deferred fare quantum of 15.6 percent from previous FREs. After the deferred fare quantum is added to the fare adjustment formula output for this year, the maximum allowable fare adjustment quantum for the 2024 FRE is 18.9 percent, the council said.
“The PTC understands that cost of living remains a concern for Singaporeans, and a moderation in cost increase is reflected by the lower fare formula output compared to FRE 2023. To cushion commuters from the full fare increase, the PTC has decided to grant an overall fare increase of 6.0 per cent for this year, which is less than a third of the 18.9 per cent maximum allowable quantum. This will reduce the deferred fare quantum to 12.9 per cent (from 15.6 per cent), which will be considered at future FREs,” the statement stated.
To cover the deferred fare adjustment quantum, the PTC said that the government has agreed to provide an additional subsidy of about SGD 250 million this coming year. This is on top of the annual SGD 2 billion in operating subsidies provided for public transport, and the additional funding of up to SGD 900 million over 8 years for the Bus Connectivity Enhancement Programme.
The additional government subsidy will help to moderate the fare increase, while still accounting for the higher costs of providing public transport.
The council has also decided to maintain the prices of monthly passes with no increases to help heavy users of public transport cap their public transport expenses. “PTC encourages adults and concession groups (students, seniors, national servicemen, Persons with Disabilities and Workfare Transport Concession Scheme card holders) who travel frequently to consider buying monthly passes to cap their public transport expenses,” the statement noted.
Further support for graduating students
Currently, students in secondary schools, ITEs, junior colleges, polytechnics and other government/government-aided tertiary institutions pursuing a diploma, and those enrolled in eligible private educational institution courses, pay student concessionary fares when travelling on public transport.
Upon graduation, some may have to pay adult fares before they enrol in another school and are eligible for concessionary fares again. Earlier this year, the Minister for Transport, Chee Hong Tat requested that the PTC considered extending the concession period for graduating students, following feedback from parents and students.
Following deliberations, the council decided that graduating students who are eligible for concessionary fares will continue to enjoy concessionary fares for an extended period of four months upon the end of their course of study.
This will start with graduating students whose concession eligibility ends on or after 28 December 2024; and will apply to the entire group of graduating students – both those who are in between two education stages (e.g. N-level and O-Level students enrolling in ITE or polytechnics) and those transitioning out of student concession benefits (e.g. JC students who may enrol in university).
This will help students and their families manage the transition out of or between concession schemes.
Around 75,000 graduating students are expected to benefit from this change each year.
To extend the validity of their concessionary cards, this year, eligible graduating students will need to tap their existing concessionary card at any ticketing machine located at MRT stations and bus interchanges or visit a ticketing counter from 1 October, 2024. Information on the extension will also be communicated to students through their educational institutions.
The fare adjustments, which are applicable from 28 December 2024. | www.ptc.gov.sg
Targeted support for lower-income households in the form of Public Transport Vouchers
In tandem with the fare increase, PTC will require SBS Transit Rail and SMRT Trains to contribute 15 percent and 25 percent of their expected increase in revenue respectively – a total of SGD 13.01 million (SBS Transit Rail: SGD 3.05 million; SMRT Trains: SGD 9.96 million) to the Public Transport Fund.
To cushion the impact of the fare increase, the PTC has also recommended that the Government draw on the Public Transport Fund to provide further assistance to lower-income resident households in the form of Public Transport Vouchers (PTVs).
Balancing fare affordability and financial sustainability
In 2023, lower-income households (i.e. households in the second income decile), and average public transport commuter (represented by households in the second income quintile) spent an average of 2.4 percent and 1.7 percent respectively, of their monthly household income on public transport.
After accounting for this year’s fare and wage increases, the percentages that these households are expected to spend on public transport will remain similar to 2023, i.e. 2.4 percent for lower-income households and 1.7 percent for average public transport commuters.
Public transport affordability indicator | www.ptc.gov.sg
Reacting to the development, Janet Ang, Chairperson, Public Transport Council, said: “The Public Transport Council understands Singaporeans’ concerns about cost of living. For the past few years, PTC has not granted the maximum allowable fare quantum because, as much as we can, we want to moderate the financial impact of fare increases on commuters.
As a result, the deferred quantum from previous years has accumulated, due to sharp increases in energy prices in 2021 and 2022, elevated core inflation, and strong wage growth.
While cost increases have moderated, the PTC is cognisant that geopolitical shocks, like the global energy crunch in 2021, may still occur from time to time. Such shocks could cause unforeseen increases in operating costs that have to be accounted for in future fare reviews together with the deferred fare quantum.
By granting a 6 per cent fare increment this year, we are reducing the deferred quantum from previous years, to narrow the gap between cost and fares where we can to maintain the financial sustainability of our public transport system. PTC will continue to weigh this against our objective of ensuring that public transport remains affordable. That is why on balance, the fare adjustment granted is less than one-third of the maximum allowable quantum.
– Janet Ang, Chairperson, Public Transport Council
“PTC will continue to do its utmost to protect the interests of concession groups, by ensuring that fare increases are lower for these groups. This year, the Council also deliberated on ways to help ease the transition for graduating students. These students will now be able to enjoy concessionary fares for an extended period of four months after the end of their course of study.
We hope this will help families with graduating students save on their public transport expenses. PTC will continue to ensure that fare adjustments are gradual and impact on commuters manageable while keeping the public transport system financially sustainable,” she added.
(The article is published under a mutual content partnership arrangement between The Free Press Journal and Connected To India)
