The Public Transport Council (PTC) has revealed a new public transport fare adjustment formula designed to reduce the volatility of fare changes for commuters here.
The new formula comes as a result of Minister for Transport Mr. S Iswaran's appointment of the PTC to review the effectiveness of the fare adjustment formula and mechanism in August 2022.
The two variables of the previous fare review formula have been replaced with factors that will stay fixed for the next five years The new public transport fare adjustment formula will continue to retain the core consumer price index, wage index and energy index at their existing weightages. These are utilised to ensure that public transport fares continue to closely reflect the operating cost structure of the public transport industry.
However, the network capacity factor, previously used to reflect changes in operating costs due to network capacity changes relative to ridership, will now be replaced by a capacity adjustment factor.
This factor will be fixed at 1.1% for the next five years. The PTC states that this 1.1% is derived from the planned capacity improvements from 2020 to 2026, including the opening of the Thomson-East Coast Line.
Concession card holders saw their fares incresing by $0.01 in December 2022 According to The Straits Times, the network capacity factor has ranged from 1.6% to 3.9% before the COVID-19 pandemic.
The productivity extraction component of the previous formula will additionally be replaced by a productivity contribution factor which will be fixed at 0.1% for the next five years. This factor stands as a deduction from the fare increase in the formula, and reflects the expectation that public transport operators continue to strive for productivity improvements.
Taken together, these changes mean the main driver for fare changes for the next five years will be changes to the consumer price index, wage growth, as well as fuel prices.
The new fare adjustment formula will be applied from 2023 to 2027. The PTC will also retaining the deferred fare adjustment mechanism, giving it the discretion to defer the fare adjustment quantum, in part or in full, to subsequent fare revision exercises, taking into consideration the prevailing social and economic conditions.
The last fare review exercise concluded in October of 2022 saw public transport fares rising by $0.04 to $0.05 in 26 December 2022 for adult card holders.
The new formula comes as a result of Minister for Transport Mr. S Iswaran's appointment of the PTC to review the effectiveness of the fare adjustment formula and mechanism in August 2022.
However, the network capacity factor, previously used to reflect changes in operating costs due to network capacity changes relative to ridership, will now be replaced by a capacity adjustment factor.
This factor will be fixed at 1.1% for the next five years. The PTC states that this 1.1% is derived from the planned capacity improvements from 2020 to 2026, including the opening of the Thomson-East Coast Line.
The productivity extraction component of the previous formula will additionally be replaced by a productivity contribution factor which will be fixed at 0.1% for the next five years. This factor stands as a deduction from the fare increase in the formula, and reflects the expectation that public transport operators continue to strive for productivity improvements.
Taken together, these changes mean the main driver for fare changes for the next five years will be changes to the consumer price index, wage growth, as well as fuel prices.
The new fare adjustment formula will be applied from 2023 to 2027. The PTC will also retaining the deferred fare adjustment mechanism, giving it the discretion to defer the fare adjustment quantum, in part or in full, to subsequent fare revision exercises, taking into consideration the prevailing social and economic conditions.
The last fare review exercise concluded in October of 2022 saw public transport fares rising by $0.04 to $0.05 in 26 December 2022 for adult card holders.
