PUBLIC transport commuters could have been hit harder. If the annual fare adjustment formula was strictly adhered to, average fares per ride would have gone up by a lot more than the 4 cents approved yesterday.
This is because the Public Transport Council was convinced that transport operators SBS Transit and SMRT Corp
should bear the bulk of the cost associated with removing a two-decade-old anomaly in our fare structure.
The anomaly is this: Journeys involving transfers (bus to bus, bus to train or vice versa) cost more than direct journeys- even if both span the same distance.
Sometimes, the difference can be as much as 50 per cent.
Hence from Oct 1, the 'transfer rebate' will be raised- from 25 cents to 40 cents. That means a person who steps off a bus and boards another to complete his journey will pay a smaller starting fare on the second bus.
The rebate will be raised by another 20 cents next October. By then, fares will reflect the distance of the journey, door to door -regardless of the number of transfers needed.
In future, with an expanded rail network,it is foreseeable that transfers would be the norm. Typically, commuters
would take a bus to a train station and vice versa on the return trip.
Removing the anomaly could be done in one fell swoop, but the cost would be quite prohibitive. The first round which is kicking in on Oct 1 already costs more than $40 million.
There are two reasons why SMRT and SBS Transit are able to absorb the bulk of it - some $30 million. One, the long-established policy of ensuring that our public transport companies are commercially viable through regular fare adjustments.
Two, ridership will rise, fuelled by Singapore's growing population and by escalating costs of driving.
You could of course say that transport operators have been overcharging those who make transfers. But by the same token,they might have been undercharging those who make direct journeys.
That will soon be a thing of the past.
The new distance-based fare structure is without question a fairer system.
But will it be a better system? That depends largely on how seamless transfers will be.
The PTC has already stipulated that bus operators adhere to stricter service standards, with shorter waiting time being a top priority. The council has been given more teeth, and can mete out hefty penalties to operators who fail to meet standards.
Next year, the Land Transport Authority will assume the role of chief bus route planner. This makes for a more cohesive network as it removes the profit motive that influences how operators plan their routes. It also paves the way for a liberalised market, one where new players are invited to bid for route parcels.
Plans are also afoot for more transport hubs - large air-conditioned facilities where bus terminals meet rail interchanges.
Measures such as increasing the number of full-day bus lanes, managing demand for road space through congestion
pricing and making 'live' travel information accessible are also key pieces to the puzzle.
It all sounds quite promising on paper.
But like a puzzle, it takes only one misplaced piece to spoil the overall picture.
Will the new chief bus route planner deliver?
How well will PTC be able to keep three, four or more operators in check?
Do we need to step up our rail-building plans- ambitious as they are now- to cope with 14.3 million daily trips by
2020, 60 per cent more than today's 8.9 million?
What if the population grows faster than expected, as it has in recent years?
In many ways, Singapore is taking the biggest stride in its quest to deliver a 'people-centred land transport system', as promised by Transport Minister Raymond Lim early this year when he unveiled the new Land Transport Masterplan.
The fare changes kicking in on Oct 1 are but the first baby steps. To its credit,the PTC has managed to make them relatively painless for most commuters. Four in 10 commuters will end up spending the same or less on transport come Oct 1. The others will each see weekly fares rising by 18-23 cents.
For a household of four, that works out to be about $40 a year.
Could the PTC have made it painless to all? After all, the operators' returns on total assets are relatively healthy compared with companies like Singapore Airlines,Sembcorp, Hong Kong's MTR and Britain's Stagecoach
On the surface, it could. But with the required investments to meet the new standards kicking in; and with the impending liberalisation of the market, their returns may not remain as rich as they have been.
That is not even taking into account rising costs from fuel, energy, manpower and raw materials.
Share of both operators were largely unchanged after yesterday's news. ComfortDelgro closed at $1.51 today, down $0.01 and SMRT closed at $2, up $0.01.
This article was first published in The Straits Times on Sept 13, 2008.
