Reviewing Productivity Contribution in Fare Formula to Share Excess Productivity Gains with Commuters

Written Reply to Parliamentary Question

Mr Ng Shi Xuan asked the Minister for Transport whether the Government will consider increasing the Productivity Contribution in the fare adjustment formula from the current fixed 0.1% or linking it to actual productivity gains achieved in excess of 0.1% so that productivity improvements can be shared with commuters through lower fare adjustments.

Reply by Minister for Transport Jeffrey Siow

1.          Prior to 2023, the fare formula had included a Productivity Extraction component which considered the actual productivity improvements achieved by rail operators. However, when the current fare formula was established in 2023, rail operators had been experiencing negative productivity gains due to the pandemic. To maintain expectations for them to make productivity improvements, a fixed 0.1% Productivity Contribution was applied instead.

2.          We note the Member’s suggestion to review the approach to sharing productivity gains. The Public Transport Council will review the Productivity Contribution comprehensively as part of the next Fare Adjustment Formula and Mechanism Review, which is due to be completed in 2028.