Public Transport Council starts review on how S'pore bus, train fare adjustments calculated

To be completed in 2023.

Belmont Lay | August 16, 2022, 04:06 PM

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The Public Transport Council (PTC) has commenced the review of the public transport fare adjustment formula and mechanism.

The council said in a news release on Aug. 15 that the process will likely be completed by the first half of 2023, and the outcome of the review exercise will be applied.

Such reviews generally occur once every five years.

PTC will examine the effectiveness of the current fare adjustment formula and mechanism during the review.

It will take into account changes in the public transport industry and commuting patterns, and propose means to “better maintain the balance to keep public transport fares affordable while ensuring the financial sustainability of the public transport system”.

The council said the review will see commuters, public transport operators, the labour movement and transport experts consulted and engaged.

The current fare adjustment formula and mechanism will apply to the 2022 fare review exercise, PTC added.

Current formula

The current formula for calculating the maximum fare adjustment was set four years ago.

It takes into account the following factors:

  • Year-on-year change in the core consumer price index (core CPI)
  • Year-on-year change in the wage index (WI), measured by the average monthly earnings (national average), adjusted for any change in the employer’s Central Provident Fund (CPF) contribution rate
  • Year-on-year change in the energy index (EI), a composite index derived from diesel prices and electricity tariffs
  • Year-on-year change in the network capacity factor (NCF), which measures capacity provision relative to passenger demand for the entire public transport system
  • Productivity extraction factor (0.1 per cent in the 2018 formula), which is based on half of the productivity gain achieved by public transport operators

For 2018 to 2022, the maximum fare adjustment is: 0.5 core CPI + 0.4 WI + 0.1 EI - 0.1 per cent + NCF

The previous revision to the formula saw an increase in the weightage of core CPI from 0.4 to 0.5.

There was also a decrease in the weightage of EI from 0.2 to 0.1.

The WI remained unchanged, with the productivity extraction factor still at half of the operators’ productivity gains.

PTC said at the time the NCF was introduced in 2018 “to better reflect the cost movements due to changes in public transport network capacity and commuter usage”.

Top photo via Unsplash