Debate on ministries’ budgets: Transport

Getting the best value from the transport system

Need to exercise fiscal discipline to reduce costs and maximise value for money: Vivian

After years of investment on expanding and improving Singapore's transport infrastructure, the topic of financial sustainability was raised by Acting Transport Minister Vivian Balakrishnan in Parliament yesterday.

Dr Balakrishnan pointed out that spending on transport has "more than doubled over the last 10 years, from $5.4 billion in 2009 to $11.5 billion in 2019".

He noted that the MRT network is expanding, and the Thomson-East Coast Line will open from year-end. It will "eventually serve up to one million commuters".

He said: "By around 2030, we can look forward to the opening of Circle Line Stage 6, the Jurong Region Line and the Cross Island Line. We added 200 trains over the last five years. We also introduced over 1,000 buses under the Bus Service Enhancement Programme."

But "we need to exercise fiscal discipline to reduce costs and maximise value for money", he added.

To this end, he cited cases where planners had taken steps to rein in cost. For example, the Land Transport Authority saved $2 billion in construction costs with the East Coast Integrated Depot by stacking three MRT depots and a bus depot "on top of each other... the first such facility of its kind".

Next, keeping a focus on life-cycle costs when procuring major assets. When the first-generation North-South, East-West Line trains were due for renewal, Singapore sought out systems that were "easier and cheaper to maintain" throughout their 30-year lifespan.

The minister also said that contestability has helped bring down bids of the average bus contract "by about 20 per cent" since the first bus package was awarded in 2015.

Incentives to shift commuter behaviour to spread out demand for transport capacity has been another way to optimise usage.

Lower fares for travel during off-peak hours have worked, the minister said, noting that 12 per cent of commuters now travel during the morning pre-peak period - from as low as 6 per cent when the scheme started in 2013.

"We will continue to look for ways to smoothen out travel demand, while being mindful that not all commuters have the flexibility to change their commuting patterns," he said.

Even with all these measures to maximise value, Dr Balakrishnan said "a high-quality public transport system still requires significant resources". For instance, adding capacity means additional cost. Hence the Public Transport Council introduced the Network Capacity Factor into the fare adjustment formula last year to reflect new capacity added to the system, vis-a-vis actual demand.

Even so, the Government will continue to keep fares affordable, he said. For instance, it will fund all infrastructure costs and provide operating subsidies.

Dr Balakrishnan emphasised that Singapore has to strike "a balance between affordability and the long-term fiscal sustainability of our transport system".

Over the next five years, the Government expects to provide $5 billion in subsidies for public bus services, around $4.5 billion to renew rail operating assets, as well as another $26 billion to expand bus and rail networks.

The minister also noted that public transport has become more affordable. Monthly expenditure on public transport, as a proportion of household income for the lower-income group, has gone down from 4.1 per cent to 2.7 per cent over the last decade.

To questions from MP Ang Wei Neng (Jurong GRC), Senior Minister of State for Transport Janil Puthucheary said 64 per cent of households are currently within a 10-minute walk of an MRT station, and 45 per cent of public transport commuters complete journeys within 45 minutes.

The target is for 80 per cent of households to be within 10 minutes of an MRT station by 2030 and 90 per cent of peak-hour trips to the city to be completed in 45 minutes.

A version of this article appeared in the print edition of The Straits Times on March 08, 2019, with the headline 'Getting the best value from the transport system'. Print Edition | Subscribe