Transport experts laud fare recommendations

Passengers boarding a SBS Transit bus. While transport experts hail the recommendations by a fare review committee as progressive, they say Singapore should shift to a regime where the interests of transport operators and commuters need not
Passengers boarding a SBS Transit bus. While transport experts hail the recommendations by a fare review committee as progressive, they say Singapore should shift to a regime where the interests of transport operators and commuters need not be poles apart. -- ST FILE PHOTO: ALPHONSUS CHERN

But they wonder if different model could serve operators, public better

While transport experts hail the recommendations by a fare review committee as progressive, they say Singapore should shift to a regime where the interests of transport operators and commuters need not be poles apart.

The Fare Review Mechanism Committee on Tuesday released an 85-page report that sought to strike a "judicious balance" between two somewhat divergent goals: affordability of fares and profitability of private operators.

It recommended a slew of concessions that could benefit up to a million commuters, while also tweaking the fare formula to better reflect cost pressures faced by operators SMRT and SBS Transit.

Transport economist Anthony Chin from the National University of Singapore lauded the recommendations. But he said the bigger question is whether the current model here, a model based on nationalisation or the "London model" will serve both the public and transport players better.

Associate Professor Chin favours the London model - one whereby operators bid for routes and revenue risk is assumed by a government. That means the government collects fare revenue, faces market uncertainties, such as fuel cost fluctuations, and offers concessions to commuters as it sees fit.

Firms that exceed set service standards get a bonus at the end of their contract with the government, while those that fail are penalised. In such a market, the presence of "credible (competitive) threat keeps operators on their toes", he said.

Associate Professor Paul Barter, who teaches transport policy at the Lee Kuan Yew School of Public Policy, has previously said the London model allows for a better way for subsidies to be handed out.

Government Parliamentary Committee (GPC) for Transport chairman Cedric Foo felt the fare framework recommended by the committee was sound but still not ideal.

Having contestability in the market will allow an operator to to operate a network at the lowest feasible cost level and still meet prescribed service standards, he said. Still, he noted that any changes here will have to wait till the authorities' existing agreements with transport operators expire in 2016.

In a statement yesterday, the Workers' Party noted that the committee's scope did not include a review of the existing transport model, but said: "It should not be the Government's responsibility to safeguard the profits of SMRT and SBS Transit, which are commercial entities."

It suggested that the Government should explore incorporating service quality into the fare formula as this "directly impacts the public transport experience of commuters".

Transport GPC member Lim Biow Chuan supports the proposed concessions for those who need more help, such as low-income workers and the disabled.

In a Facebook post, Transport Minister Lui Tuck Yew said he is "generally in favour" of the committee's suggestion that the Government fund concessions for those two groups.

On Mr Lui's comment, Prof Chin said: "It's a gradual shift to a new direction. In Singapore, it's never a Big Bang change."

roysim@sph.com.sg

christan@sph.com.sg

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