PTC reduces bus and rail fares

Date: 26 October 2016

And Simplifies Fare Structure to Benefit Commuters


1. The Public Transport Council (PTC) has concluded the 2016 Fare Review Exercise and has decided to:

a. Simplify the current fare structure, by lowering the fares for the fully-underground rail lines to the fare level of above-ground rail lines;

b. Grant an overall 4.2% fare reduction, which translates into reductions of 1 to 27 cents for card fares; and

c. Carry forward the remaining -1.5% of the fare quantum to the next Fare Review Exercise, to spread out the impact of volatile energy prices over time.

2. The above will take effect on 30 December 2016.

a) Simplification of Fare Structure

3. Currently, fully-underground lines like the North East, Circle and Downtown Lines have a different fare structure from the North-South and East-West Lines, LRT Lines and buses. The difference in fares ranges from 4 to 25 cents for adult and senior citizen concessionary card commuters. The fare differential was introduced in 2003 with the North East Line to reflect the higher operating costs (e.g. air-conditioned platforms) of the fully-underground lines. This difference in fare structures for rail lines has, however, resulted in fare exceptions that may be confusing to commuters. For example, a commuter could be charged less for a longer journey along an above-ground line or on a
bus service, compared to a shorter journey on a fully-underground line.The number of such exceptions will multiply as our rail network grows and may inhibit the efficient distribution of commuters across the network. To remove the differential, fares for fully-underground lines will be lowered to the same level as the above-ground lines and basic bus services. With the move to a single fare structure, almost all fare exceptions will be eliminated.

4. PTC will also adopt a purely distance-based approach to calculate fares based on the shortest travel path. Rail fares are currently determined by the distance of the fastest travel path between origin-destination pairs. However, the fastest travel path, which is based on travel time and includes walking and waiting time, may not always be the travel path with the shortest distance. The revised approach will be more intuitive for commuters and consistent with the current Distance Fare Framework.

5. With the simplification of the fare structure, it will be easier for commuters to plan their journeys. Commuters will enjoy more flexibility in choosing the most convenient travel path, without worrying that they have to pay more because the journey is routed through a fully-underground line. As fares will be set based solely on the shortest travel path, commuters will always be paying the lowest fares possible.

b) Lower Card Fares for All Commuters

6. All commuters using fare cards will enjoy a fare reduction. Based on the new distance-based fare structure, adult card fares will be lowered by 1 to 27 cents.

7. Senior citizens’ concessionary card fares will be reduced by 1 to 7 cents while student concessionary card fares will be reduced by 1 cent. The prices of all monthly concession passes and monthly travel passes will remain unchanged.

8. The Government will also lower the concessionary card fares for LowerWage Workers and Persons with Disabilities. The Ministry of Transport will announce the details of the fare reduction separately.

c) Ensuring a Sustainable Fare System for All

9. The significant 4.2% fare reduction will allow the simplification of the current fare structure and allow all commuters to enjoy a reduction of fares. The remaining -1.5% will be carried forward to the next Fare Review Exercise.

10. Central to the PTC’s decision to carry forward this quantum is the principle that fares should be kept affordable while ensuring the long term viability and sustainability of the public transport industry. The Public  Transport Affordability indicator (PTAI), which tracks fare affordability, shows that public transport fares have become more affordable for second quintile and second decile households over the past decade. The percentage of monthly household incomes spent on public transport has decreased from 3.2% in 2005 to 2.2% in 2015 for second quintile households, and from 4.5% in 2005 to 3.1% in 2015 for second decile households.

11. Conversely, the public transport industry is facing cost pressures that pose challenges as it strives to deliver higher levels of service to commuters. It is also unlikely for energy prices, which had fallen substantially in 2015, to remain at its current level indefinitely.

Conclusion


12. Mr Richard Magnus, Chairman of the PTC said, “Last year, fares were reduced by 1.9%. This year, fares will be reduced further by a substantial 4.2%. The remaining -1.5% will be saved and carried over to next year. In addition, the introduction of a simpler fare system allows commuters to get to their destinations by any public transport mode, whether it be an above-ground or fully-underground MRT line, or bus, without worrying about the cost differential. This will benefit commuters further as more new fully-underground lines are opened in the coming years. The lower energy rices in 2015 have allowed PTC to reduce all card fares. A prudent and balanced approach is however necessary to ensure the longer term sustainability of our public transport system. We will continue monitoring this closely.”

Annex A: Factsheet for 2016 Fare Review Exercise
Annex B: Approved Bus and Train Fares

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