Ridership excluded in new public transport fare formula but could be reconsidered in future: Iswaran

THE new capacity adjustment factor in this year’s public transport fare formula replaces the existing network capacity factor (NCF) and exclude ridership from its calculation. 

This will reduce the potential variability in fares arising from the uncertain recovery of ridership post-pandemic, said Minister for Transport S Iswaran in Parliament on Tuesday (May 9).

Ridership, however, could be considered in subsequent fare formula reviews when ridership fully recovers, Iswaran added.

The NCF measures the difference between transport capacity expansion and passenger load, while the capacity adjustment factor, which assigns a fixed figure to account for average capacity expansion, will be set at 1.1 per cent each year from 2023 to 2027.

The new formula reflects the actual and planned growth in public transport capacity from 2020 to 2026. This includes the opening of the Thomson-East Coast line, as well as the short segments of Northeast-Downtown and Circle lines, during this period.

The Jurong Region line, slated to open in 2027, will only be considered in the next fare formula review.

The proposed adjustment, to be implemented from this year’s fare review exercise, is one of five components in the fare calculation formula. Other factors reflect year-on-year changes in core inflation, wages and energy prices.

The current NCF, which is computed yearly and factors in ridership alongside capacity, was not designed for situations such as Covid-19, said Iswaran.

The NCF ranged from 1.6 per cent to 3.9 per cent in the first three years, but rose to 50 per cent due to a sharp fall in ridership during the pandemic. The Public Transport Council then suspended NCF contribution from February to December 2020 and for the entire year of 2021 in the computation of the 2021 and 2022 fare adjustment quantum respectively.

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Highlighting changing commuting patterns and flexible work arrangements, Iswaran said that ridership at the system level is now at about 90 per cent of pre-Covid-19 levels. Journeys to the downtown core are still at about 70 per cent of pre-pandemic levels, he added.

Iswaran also said that the government has provided some 600,000 public transport vouchers of S$30 to eligible households to subsidise higher public transport expenditure due to the fare adjustment last year.