The Government bus contracting model will raise service standards but these improvements cannot be sustained without raising fares, said Transport Minister Khaw Boon Wan.
But if fares were to rise, the Public Transport Council (PTC) will ensure that the fares remain affordable, he said.
His comments, given to Chinese daily Lianhe Zaobao in an e-mail interview, were reported yesterday. The bus contracting model takes effect on Thursday.
Mr Khaw, who is also Coordinating Minister for Infrastructure, added that the Government will continue to ensure that the cost of public transport is not an undue burden on the people.
Under the model, the Government will own all operating assets, which are leased out to bus operators. Operators will be paid by the Land Transport Authority for providing bus services and fare revenue will be collected by the Government.
Mr Khaw said the goal is to have government-owned buses so as to respond more quickly to changing commuter needs. He also expressed hopes that shorter operating contract periods will make the industry more competitive.
When asked about the role the new bus contracting model would play when the distance covered by MRT lines expands to 360km by 2030, Mr Khaw said it was difficult to predict traffic conditions after 2030.
But he believes buses would still play an important role in public transport here, just like those in cities such as New York, London and Tokyo, which have well-developed subway networks.