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SBS Transit, SMRT apply for bus and rail fare hikes
BOTH SBS Transit and SMRT yesterday announced they have applied to the Public Transport Council to raise bus and rail fares next year.
SBST said it "continues to face significant cost pressures despite increased efforts to lower costs and increase productivity", but did not give more details.
Public transport operators SBST and SMRT had to submit their applications to adjust fares to the council by yesterday.
SMRT runs a bigger rail network than SBST, which is Singapore's biggest bus operator. The latter accounts for about three-quarters of all public buses.
Losses at SBST's bus and rail businesses caused its net profit to dive 43.8 per cent to $3.54 million in the third quarter ended Sept 30, 2013.
Last month, Maybank Kim Eng Research said it expects "significant fare hikes of 5 per cent per annum in the next three years, before reverting to a more normalised annual rise of 2.7 per cent", because an estimated 8 per cent of accumulated fare revision was not implemented in 2012/13. A rollover of the fare adjustment quantum is now allowed for future hikes.
With the submission of SBST's proposal, the PTC is expected to assess it and unveil its decision in the first quarter of 2014. Any fare adjustment is likely to be implemented by the second quarter.
But this year's process could be a bit more complicated than the past because of a new fare formula and the introduction of new and enhanced concession schemes.
The new formula will be more responsive, with fare adjustments equal to the price index minus a revised productivity extraction, where the price index features a new energy index component to track energy costs, in addition to a revised core CPI and an unchanged wage index. The new fare formula will apply from 2013 to 2017.
Two new concession schemes - one for low income workers and another for people with disabilities - will be funded by the government, but the enhancements to existing concession schemes will be borne by commuters.
These include free travel for children below seven (currently, only children below 0.9 metre travel for free); cheaper monthly passes for polytechnic students (polytechnic and university students pay the same amount now); cheaper hybrid monthly passes for all; concessions for all full-time students; enhanced senior citizen concessions; and adult monthly travel passes which cap the monthly expenditure for frequent users.