SINGAPORE - Bus and train card fares will drop by up to four cents a journey from Dec 27, the Public Transport Council (PTC) announced on Friday after its latest annual review.
The adjustment, which takes into account last year's drop in oil prices, is timed to coincide with the opening of Downtown Line 2, and is four months earlier than usual.
The reduction amounts to a maximum 1.9 per cent cut allowed in a fare formula that weighs inflation, wage increase and fuel or energy prices. It will impact SBS Transit's revenue by $15.7 million, and SMRT's by $20.4 million.
The fare cut comes after substantial rises in the two previous adjustments, which saw fares rising by 3.2 and 2.8 per cent respectively.
Card-paying adults will see their fares drop by one to four cents from Dec 27, students by one to two cents, and senior citizens by one to two cents.
A family of two adults and two school-going children is thus likely to see monthly household fare expenditure fall by around $15.
|Current Fare||New Fare|
|Adult Card Fare||$1.66||$1.62
|Senior Citizen Concession Card Fare||$0.90||$0.88
|Student Concession Card Fare||$0.61||$0.59
PTC chairman Richard Magnus said: "This year's decision to reduce fares for commuters is in line with the negative quantum yielded by the fare adjustment formula due to lower energy prices. We have decided to grant the full quantum of reduction to benefit commuters and to keep fares affordable."
Low-wage workers will pay one to four cents less, while people with disabilities will pay one to two cents less. Both groups will continue to get fare concessions, but monthly concession and off-peak passes for the latter will remain unchanged at $60 and $40 respectively.
Commuters who pay cash, said to constitute only 3 per cent of all the total, will not see any reduction, though. Mr Magnus said this was to encourage people to pay by card.
As their revenue is contracting because of the latest fare adjustment, the two transport operators are not required to contribute to the Public Transport Fund this round. The fund is used to disburse vouchers to needy families to help them defray fare increases.
Separately, Mr Magnus said the council will decide how to adjust fares next year when the contracting model for buses kicks in. In such a model, an operator is paid a fixed sum to run a package of routes by the Land Transport Authority, which in turn collects fare revenue. The operation is usually subsidised by taxpayers, making it more complex to accrue cost and compensation.
The current fare formula takes into account changes in inflation rate, wages and an energy index that charts oil and electricity costs - all of which are proxies for costs faced by an operator. The first two components are given a 40 per cent weighting each, while energy has a 20 per cent weighting.
A productivity extraction of 0.5 per cent is then deducted from the derived figure. This is to allow commuters to share in the transport operators' productivity gain.