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Ministry of Transport
In Parliament

Wage and Energy Cost Considerations in Annual Public Transport Fare Review Exercises

3 November 2026

Sectors

Fares

Written Reply to Parliamentary Question

Mr Gerald Giam Yean Song asked the Minister for Transport

a.          whether operator profitability is evaluated alongside wage and energy costs during the annual Fare Review Exercises; and

b.          whether the Ministry will consider (i) incorporating profitability thresholds into the fare adjustment formula or (ii) implementing a tiered clawback mechanism on operator revenues during high-profit years to directly fund Public Transport Vouchers and reduce the need for future fare increases.

Reply by Minister for Transport Jeffrey Siow

1.          It is not practical to adjust fares based on profitability thresholds as our transport system operates with different funding regimes. Fare revenues do not go to bus operators under the gross cost model, and do not affect profits. Profits for rail operators, with the exception of the Thomson-East Coast Line which is also under a gross cost model, are effectively capped at around 5% under the New Rail Financing Framework.

2.          As part of each Fare Review Exercise, operators are already required to contribute part of their increased fare revenue to the Public Transport Fund, which is used to provide Public Transport Vouchers to lower-income households. More profitable operators are required to contribute a larger proportion of the increase in their revenue. Operators also share some of their productivity gains with commuters through the Productivity Contribution of 0.1% in the fare formula.