Public transport commuters whose journeys include transfers will enjoy lower fares soon.
This is because the Government is phasing in a new system that calculates fares according to distance, regardless of the number of transfers.
Commuters now have to pay base fares each time they switch from bus to bus, bus to rail or rail to bus, resulting in journeys costing as much as 50 per cent more than those on direct service for the same distance.
The new fare system, announced by the Public Transport Council (PTC) on Thursday, is expected to benefit 40 per cent of passengers who make transfers today.
The restructuring will not impact on the bottomline of the transport operators, but commuters whose journeys do not require transfers will have to pay slightly higher fares.
Some may see their fares going beyond the 3 per cent ceiling the PTC has set for this year's fare increase.
Although the 3 per cent cap is higher than the 1.8 per cent and 1.7 per cent ceilings for 2007 and 2006, the council will only decide on actual fare adjustments after receiving applications by the transport companies.
Public transport operators SBS Transit and SMRT Corp are expected to submit their applications by next month.
The PTC will make its decision by September, and the new fares will kick in from Oct 1.
The council said it will take into consideration growing ridership trends - which are expected to boost revenue far more significantly than fare increases - when considering the fare adjustment.
The new fare revision formula, valid for five years until 2012, allows commuters to share a bigger slice of productivity gains declared by the operators. Previously, fares were revised every three years.
The distance-based restructure will be rolled out in stages to minimise the financial impact on the operators, said a a Transport Ministry spokesman.
The transfer penalty will be removed partially this year, and completely by the next fare review in October 2009.
