Annual Fare Review Process
The PTC has put in place a framework to cap overall fare increases in small, regular steps. The annual fare adjustment is based on a formula recommended by the Government-appointed Fare Review Mechanism Committee (FRMC) in 2005. The fare adjustment formula was reviewed in 2008 and the revised formula, which will be valid from 2008 to 2012, is as follows:
| Maximum Fare Adjustment = 0.5 CPI + 0.5 WI - 1.5% Where CPI = Change in Consumer Price Index over the preceding year WI = Change in Average Monthly Earnings (Annual National Average) over the preceding year, adjusted to account for any change in the employer's CPF contribution rate 1.5% = The productivity extraction based on a sharing of productivity gains achieved by PTOs |
Please refer to the FRMC Report for more details.
The formula gives the maximum allowable fare adjustment which is the overall quantum of change in fare revenue that is generated by the changes in fare levels and the corresponding ridership. Fare levels vary according to the distance-based fare structure.
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