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| Aug 2, 2007 | |
| If approved, transport fares could rise by up to three cents from October | |
| By Christopher Tan, Senior Correspondent | |
| PUBLIC transport operators SBS Transit and SMRT Corp have applied for fare increases. If approved by the Public Transport Council (PTC), bus and train fares will rise by up to 1.8 per cent - or around three cents - from October. PTC chairman Gerard Ee confirmed yesterday that the two companies have submitted their applications. The council is likely to decide by the end of this month if rises are to be allowed, and if so, by how much. The current system uses a formula to calculate by how much prices can go up - by pegging the adjustments to the health of the economy. Based on the formula, the system allows for incremental fare increases rather than a single big hike. It also allows for reductions if the economy plunges into a deep recession. The most recent fare increase was in October last year - then, they went up by between one and three cents per trip on buses and trains. Back then, the operators blamed high costs - in particular the high price of fuel and manpower - for the need to raise their fares. Today, the companies are citing the same reasons - manpower and energy - for their fare increases. SBS Transit, part of the ComfortDelGro group, for instance, called its cost increases 'significant'. 'Energy costs, for example, rose by 20 per cent or $20.3 million last year - having already increased by 41.2 per cent in 2005,' SBS Transit spokesman Tammy Tan said. 'Manpower costs, the company's largest cost component, also increased by about $12.1 million during the year.' SBS also pointed out that it had invested heavily in buses as well as commuter services. It spent $135 million on new buses in the past two years. And it has rolled out an online bus arrival system, which helps commuters to plan their journeys better. SMRT pointed out that the increase in the goods and services tax as well as the 1.5 percentage point rise in employers' CPF contributions will pull down its earnings by about $11 million a year. It said the fare increase, if kept to this year's cap of 1.8 per cent, would only partially offset the company's total cost increases. SBS is proposing to keep children and school student fares as well as concession pass charges unchanged. SMRT also said it is proposing no rises for children and students. In addition, it is not asking for rises to all bus cash fares. SMRT is also waiving any increase to the first fare band of its MRT single-trip ticket, which costs 90 cents. It added that it would extend its senior citizen concession hours to match SBS'. Both operators said they would come up with schemes to help the poor cope with any fare rise. The Consumers Association of Singapore (Case) was not entirely convinced. Case executive director Seah Seng Choon pointed out that transport companies are enjoying 'good returns'. For instance, SMRT achieved a 39 per cent rise in net earnings to $37.94 million in the first quarter. 'With such significant increase in net earnings, commuters would certainly expect it to show clear justifications for any need to hike fares at this point in time,' he said. | |
Some statistics well worth noting:
SBS Transit__________Year 2005_________Year 2006
Profit before Tax...........63.3 mil............... 67.3 mil
Profit After Tax.............51.1 mil............... 56.1 mil
http://www.sbstransit.com.sg/downloa...6_6MAR_ALL.pdf
SMRT______________Year 2005_________Year 2006_________Year 2007
Profit before Tax...........83.9 mil.............. 124.1 mil............. 142.3 mil
Profit After Tax............126.6 mil............. 103.6 mil............. 135.8 mil
http://www.smrt.com.sg/investors/doc...report2006.pdf
I guess this is what happens when you have a state-monopolised yet privatised 'free market' for a crucial public service. And still, you see no buses appearing for 15 minutes, then 3 of the same at once in 2 minutes, and trains only get more packed, even in off-peak hours. And what of the revenue generated by advertising from the no-one-asked-for-it-but-we'll-count-it-as-an-improvement-in-transport-service TV Mobile? Can that not be used to offset such energy or manpower cost increments?
Methinks we should all buy those SMRT shares, people.
Check out The Online Citizen for a detailed report on fare increases over the years.
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