June 26, 2017

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by Lee Chin Wee 

BUCKLE in, because public transport fares are likely to rise. Transport Minister Khaw Boon Wan hinted as much during his Ministry’s Committee of Supply debates last week (Mar 8). Addressing Parliament, he said that the Public Transport Council (PTC) was reviewing the current fare formula, which is due to expire later this year.

In December last year, the PTC had revised fares downward due to lower energy prices. However, Mr Khaw noted that “the PTC cannot always bring good news, sometimes they have to adjust fares upwards. And when they do, I hope commuters will be understanding.”

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Many Singaporeans, especially those in lower income brackets, will soon be feeling the pinch. A month ago, Finance Minister Heng Swee Keat announced a 30 per cent hike in water prices – the first time water prices have risen in 17 years. It also comes on the heels of increased Service & Conservancy charges in 15 PAP-managed town councils, and higher parking charges at public car parks across the island.

Of course, every fee increase must be evaluated based on its own merits. It is not enough to say that the cost of living has gone up – in the case of public transport fares, any increase should be measured against real wage growth in Singapore and the trend pattern of public transport operating costs.

 

Is it expensive to keep trains and buses running?

To obtain a better understanding of public transport operating costs, we studied SMRT’s annual reports from FY2011 – 2016 as a case study.  Of particular interest were the rail/light rail and bus businesses. We isolated the annual figures for operating revenue and operating profit in these areas.

 

 

Operating profit for core public transport services is not high; in fact, it is a negligible portion of SMRT’s overall profit. In 2016, SMRT recorded an operating profit of $138.5 million. Out of this sum, only $13.3 million was from the rail/light rail and bus businesses – barely 9.6 per cent of total profits. The other 90.4 per cent can be attributed to SMRT’s other business interests, such as advertising and property rental. For instance, SMRT owns Kallang Wave Mall.

Not only is operating profit already low, it is decreasing due to operating costs rising at a marginally faster rate than operating revenue. Why might this be the case? Because in recent years, SMRT has been investing in renewal works for key infrastructure, and the acquisition of operating assets. For instance, from August 2013 to December 2016, 188,000 timber sleepers were replaced with more durable concrete sleepers. To prevent further power faults, SMRT is also replacing the third rail system which supplies electricity to trains. The cost of financing these projects is not directly passed on to the consumer, as fare prices are set by the PTC.

 

Can Singaporeans afford a fare hike?

When fares rise, consumers end up shouldering more of the operating costs. The key question is, can Singaporeans afford it? In comparison to other countries, our public transport fares are very affordable. A 2016 study by UniSIM showed that, for a 10km train ride, Singapore’s train fare was the sixth lowest out of 35 major world cities. It costs a commuter SGD$1.33 to travel 10km on train, whereas the global average (after Purchasing Power Parity adjustment) is around SGD$2.30.

Tracking real wage growth against changes in public transport fares, it also appears that public transport fares are reasonable. Since 2011, real wage growth has broadly kept pace or surpassed increases in fares. This, however, does not account for the period of 2012 – 2013, where fare changes were temporarily suspended as the PTC reviewed its pricing structure.

 

 

Should public transport fares be going up?

Someone’s got to pay for the cost of running our trains and buses. When SMRT was still a publicly listed company, there were three parties who could do this: (1) the consumer of public transport, who pays through fares; (2) the G, who pays through taxpayer monies; and (3) the retail investor, who buys SMRT stock. Since SMRT was acquired by Temasek Holdings, we are now left with options (1) and (2).

Clearly, consumers of public transport are also taxpayers. But not all taxpayers are consumers of public transport. Hence, when the G subsidises operating costs, people who are under-consuming public transport will be cross-subsidising those who use public transport frequently. Some view this as good, because those who under-consume public transport tend to be rich anyway, and their taxpayer dollars should be used to make sure others can have cheap MRT rides. Others view this as bad, because people should contribute based on how much of a service they consume.

Another point of view is that SMRT and other transport operators should use their profits from more profitable business sectors to cross-subsidise rail and bus services. The argument here is that instead of raising fares, transport operators should be willing to take losses on its core business (that is effectively a public service) in exchange for making large profits on advertising, overseas consulting, and retail business. However, there is a limitation to this model – transport operators only have secondary interests in these other business areas, and cannot sustain such an internal cross-subsidy if operating costs continue to mount.

Regardless of what one believes, everyone would agree that high operating costs for public transport are unavoidable if we want to ensure our trains and buses become more reliable and less fault-prone. And even if public transport fares were held steady, taxpayers would still feel the pinch – either directly in the form of higher taxes, or indirectly as money that would otherwise have gone to other G services is now used to subsidise public transport.

Come this April, though, when the PTC convenes to announce changes to fares, I’ll still be hoping that my daily MRT rides get cheaper. One can dream, right?

 

Featured image by Sean Chong.

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Photo By Shawn Danker
A Comfort cab covered in ads trawling the streets of Singapore.

by Wan Ting Koh

THE Public Transport Council (PTC) released its report yesterday (August 1) detailing recommendations on ways to improve public transport after a six-month consultation period which began earlier this year.

The process, headed by chairman Richard Magnus, included 44 interviews, 51 focus group discussions and a commuter survey of 2,132 respondents. The PTC also monitored views on mainstream and social media over a period of 12 months.

Submitted to transport minister Khaw Boon Wan last week, the results of the report looked at several areas, including the accessibility and reliability of public transport, improving the design of the transport system and making the transport system more convenient and inclusive for all commuters. Now, it is up to the Land Transport Authority to study the report and decide on the implementation of the PTC’s recommendations, said Mr Khaw.

Here are six improvements that stood out in the report:

1. Grace period to exit and re-enter the paid area at MRT stations

Toilets at MRT stations are located outside the paid areas. A commuter who has tapped in will have to pay again if they need to use the toilet urgently and have tapped out to do so. This may not be fair for commuters with health problems, such as irritable bowel syndrome, the PTC said. Hence, it is recommending that “special exceptions” be provided “for such commuters”. One of these suggestions is to extend a grace period to those who need to use the toilets by getting station staff to help them exit and re-enter through the swing gates.

2. Review stroller policy on buses

The PTC called for a review of the closed-stroller policy on public buses to make it easier for parents with young children to take the bus with their strollers. Currently, strollers and prams have to be folded on board the bus for the safety of both children and commuters.

According to the report, bus captains worry that a child seated in an open stroller may be flung when the bus brakes suddenly. They also worry that the stroller may injure another commuter.

Besides that, with the current policy, a parent travelling alone has to juggle the baby, stroller and other bags with only two hands just to board the bus. This also means they have to free up a hand to tap their EZ-Link card on the reader.

For special needs children who use strollers rather than wheelchairs, there is added pressure on caregivers to fold the strollers quickly after pushing the child on board, so that the bus drivers can drive off. Folding up the stroller also causes additional waiting time for commuters already on the bus.

So the PTC is suggesting to “retrofit” wheelchair-accessible buses with safety belts for strollers to “address height differences between strollers and wheelchairs”. Though, wheelchair users should still be given the priority over a stroller.

Open strollers on board buses have long been a talking point among parents who have pointed out the challenges and inconveniences of having to handle the child, stroller and bags at the same time. An ST forum letter by Dr Daniel Ng Peng Keat, published last year, appealed to have open strollers on the bus for children with cerebral palsy due to the sheer effort caregivers have to put in to move them in and out of buses.

3. Third rear exit on buses

Commuters have raised concerns over the current bus designs, and have said that it is not conducive to sit or stand at the back of the bus due to safety issues. This is because of the narrow design of the rear, which not only makes the area small, but also harder for passengers to manoeuvre when alighting. There are also usually one or two steps at the back that may cause a fall in the case of sudden braking, and a low ceiling which may be inconvenient for taller passengers. As a result, commuters are reluctant to move to the rear of the bus, crowding the front and middle portions and making it harder for more passengers to board.

To address this issue, PTC recommends having a third rear exit to encourage commuters to move to the back of the bus. With a third rear exit door, it will be easier for passengers to alight without having to squeeze through crowds to get to the middle exit door. PTC notes that the design of public buses is under review by the LTA and a new design for buses – with two staircases and three doors – was unveiled in March. The LTA announced that it will be calling a tender for the manufacturing of these new buses later this year.

“The buses of the future will also feature three doors and two staircases, which will ease commuter flow and encourage passengers to not congregate at the doorways.”

– Mr Chew Men Leong, chief executive, LTA

4. Have diaper-changing facilities in both female and male toilets

In tune with more family-friendly suggestions, the PTC also recommended the installation of diaper-changing tables in male toilets. Currently, only female and wheelchair accessible toilets have them. The PTC raised the example of Tokyo, which has 254 multi-purpose toilets built in train stations that are wheelchair-accessible and have diaper-changing and baby seat amenities. It added that Seoul and Taiwan also have dedicated nursing rooms at selected train stations.

5. Train taxi drivers to aid wheelchair users

To get taxi drivers to be more confident and comfortable with handling day-to-day interactions with wheelchair-bound commuters, taxi operators could collaborate with disability agencies to provide formal sensitivity training and disability etiquette training for them, said the PTC. This would be in additional to their vocational licence training.

The suggestion came after taxi drivers said that they took “personal pains” to be sensitive to the feelings of wheelchair-bound commuters, such as those who took Maxicabs, a large seven-seater vehicle where a wheelchair can be pushed up from the back. Some taxi drivers also suggested having a caregiver accompany the commuter, as they were uncomfortable with handling the commuters personally.

Other taxi drivers suggested that wheelchair-bound commuters make cab bookings rather than hail taxis by the roadside, as the time taken to fold the wheelchair posed safety risks in an unsafe pickup location.

“Now, because of the new model of Maxicabs, all the wheelchairs have to go up from the back. Then a lot of those terminally ill (passengers)…say only coffins go up from the back. Superstitious lah… We rather carry him up from the side and then put the wheelchair behind.”

– Taxi driver, as quoted in the PTC report

6. Wider and flatter seat designs at bus stops

Remember when our comfortable, wide, bus seats were replaced with new stylish, minimalistic, slanted ones? Now the public is calling for the return of the original versions for future bus stops as the “tilted bum-rests pose a challenge, especially for seniors”, said the PTC in its report, under a segment considering commuter-friendly designs for bus stops. Apart from wider and flatter bum-rests, the PTC is considering adding seats with arm and back rests to help senior commuters in their movement.

“Seats are a problem. Not comfortable to sit. Seats are inclined…prevents people from sitting properly. Sometimes when you need to rest on the seat and the floor is slippery, you may fall… I thought it can be better constructed; with back rest and proper seating.”

– Working adult male, as quoted in the PTC report

 

Additional reporting by Kathleen Bei.

Featured image by Shawn Danker.

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Photo By Shawn Danker
The MRT passes over a bus interchange.

So the bus/train fare increases are out, based on new formulas devised by the Fare Review Committee. What would they have been under the old formula? Dunno. Should be higher since the old formula used inflation which included the cost of cars, rather than “core inflation’’. In any case, the G maintains that the new fares are at the level of 10 to 15 years ago, if anyone still remembers what they paid then.

Here are some things you might have missed while you’re trying to figure out how much you have to pay for your usual bus/train trips from April 6.

  1. The 3.2 per cent increase is less than the 6.6 per cent the transport operators asked for and what the fare formula dictates. Don’t think that your fare per se will go up by 3.2 per cent. It refers to the extra revenue that the operators want. What 3.2 per cent means: $53.5 million for the two operators.
  2. The other 3.4 per cent increase will be “rolled over’’ to next year. So does this mean it will be 3.4 per cent plus whatever the formula says for 2014? According to the PTC, the 2014 rate should be “negative’’ or -0.3 per cent, according to its “estimates’’. That means next year’s rise should be 3.1 per cent.  Remember that!
  3. Transport fares have actually got more affordable over the years. They might have gone up in dollars and cents, but not as a proportion of total spending. Really.
  4. It’s cheaper, very much cheaper, to use CARD, not cash.
  5. There’s a new Adult Monthly Travel Pass which anyone can apply for. It’s $120 a month for unlimited travel. You might want to check what your transport bill is like under the new fare structure before jumping too quickly to buy one.
  6. There’s a new $60 a month card for senior citizens. Also for unlimited travel.
  7. A whole lot of new concessions were introduced which should make polytechnic students in particular very happy because their fares get cut by half.
  8. If you are on Workfare Income Supplement, you can get a 15 per cent discount off fares. If you are disabled, you get 25 per cent off. That starts from July 6 and is funded by the G. Yes, both are new schemes. G payout: $50 million.
  9. In the meantime, this group can  apply to community centres for transport vouchers. Some 250,000 vouchers worth $7.5 million will be available. That’s funded by the Public Transport Fund which the operators contribute to. Operator payout: $11.5 million.

There’s a contradiction between the ST report and what the PTC says. ST said that the $11.5 million will come from the $53.5 million extra revenue the operators will get with the fare increase. But the PTC said in its press statement that the “gain in revenue does not include money to be set aside by the operators for the Public Transport Fund’’.  Guess the operators will have to get the money from elsewhere…

The interesting thing about this exercise is that while the operators will get a $53.5 million revenue rise; the G is subsidising some commuters to the tune of $50million. This special group is known in transport jargon speak as LWW or low wage workers and PWD or person with disabilities. Yucks. Ugly acronyms…

That’s real good of the G. It’s turning left…

But I’m hoping a transport economist weighs in. What does this mean? That the G is actually footing most of the total fare rise through its subsidies for the two groups or what?  So hard to figure out or maybe I am just stupid. I would be more than happy to be corrected and labelled stupid.

Anyway, for the commuter, you will know what all the numbers mean to your pocket on April 6.

 

This article was first published at berthahenson.wordpress.com.