Public transport operating costs up, not matched by revenue growth: Iswaran

The Government will continue to fully fund the expansion of public transport infrastructure, said Transport Minister S. Iswaran. ST PHOTO: CHONG JUN LIANG

SINGAPORE - Operating costs for public transport rose by an average of 7 per cent a year between 2012 and 2021, and this has not been matched by growth in revenue, said Transport Minister S. Iswaran.

Government subsidies have been increasing as a result, to the tune of more than $2 billion a year currently, he told the House on Tuesday in response to Mr Liang Eng Hwa (Bukit Panjang).

Mr Liang had asked how the Government determines the amount of subsidies for public transport services, and if this will be reviewed given rising costs.

Mr Iswaran said there are three key aspects to sharing the cost of funding public transport between users as well as current and future generations of taxpayers.

First, the Government will continue to fully fund the expansion of public transport infrastructure, he said, noting that more than $60 billion has been set aside to expand and renew the rail network over the next decade.

Second, the authorities have to keep costs low and find ways to economise - through efficient procurement by the Land Transport Authority, higher productivity by public transport operators and "optimising" the provision of bus and rail services as the overall network is expanded to serve new residential areas, he said.

For instance, bus routes in Bukit Panjang were removed or amended several years after the Downtown Line opened.

Third, the fare formula is meant to ensure commuters pay their fair share of the costs, by accounting for factors such as wages, energy and inflation, Mr Iswaran said.

The Public Transport Council (PTC) is currently reviewing the fare formula and is expected to complete the exercise by the first half of 2023.

The review will account for changes in commuting patterns and balance fare affordability with the financial sustainability of the public transport sector.

The new fare formula will be used for next year's fare review and for subsequent years.

Responding to Mr Liang on how the review will improve on the existing fare formula, Mr Iswaran said the PTC will have to consider how commuting patterns may have changed, with more people working from home.

Other factors include energy costs and whether that is expected to remain high, as well as inflationary pressures, he added.

"As we continue to expand the public transport network and operating costs rise with inflation and other cost drivers, we will continue to seek an optimal balance between the fiscal sustainability of government spending on public transport and ensuring affordability of public transport fares, especially for the vulnerable segments of our society," he said.

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