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How we are keeping public transport fares affordable

How we are keeping public transport fares affordable masthead

Maintaining sustainability of the public transport system

It is important to have a financially sustainable public transport system. This means that the public transport operators can be incentivised to be efficient and to make productivity improvements, while ensuring that operating cost increases are met by fare adjustments such that taxpayers would not be over-burdened by the increasing subsidies for the public transport system.

Regular fare adjustments are needed to ensure that fare adjustments are responsive to operational cost changes, and allow fare adjustments to be made in small and regular steps.

Nevertheless, we will ensure that fares remain affordable for commuters, with assistance provided to needy families to help them cope with the impact of any fare increases.

Fare adjustment formula and fare cap

The fare adjustment formula and the mechanism are reviewed regularly to ensure they are in line with the cost structure and productivity achieved in the industry. Central to the fare formula is the principle that fares should be kept affordable while ensuring the commercial viability and sustainability of the public transport operators (PTOs). The formula protects the interests of commuters by capping the fare adjustment, rather than allowing PTOs to pass all operatings costs through to commuters to bear. The Public Transport Council (PTC) will decide the quantum of fare adjustment during each fare review exercise.

To smoothen any large fare adjustment quantum determined by the fare formula that may have an adverse impact on commuters, a roll-over mechanism has been adopted. Any roll-over quantum will be added to the fare cap for the next fare review exercise and the sum of the two will form the maximum fare adjustment for PTC's consideration in that given year.

In the 2019 Fare Review Exercise, the fare adjustment quantum to be considered was 7%.

The fare adjustment approved for the 2019 Fare Review Exercise struck a delicate balance to improve the financial sustainability of a high quality public transport system, while keeping fares affordable. 

Fare concessions

Concession schemes can take the form of free travel, lower trip fares, or a cap on monthly public transport expenditure through monthly concession passes. There are currently nine concession schemes of which two are funded by Government. In 2014, the Government introduced two concession schemes for Lower-Wage Workers (LWW) and Persons with Disabilities to keep fares affordable for financially needy commuters. In 2019, the Government enhanced the discount for LWWs to up to 25% off adult fares.

In 2019, the PTC extended student concessionary fare to polytechnic and other diploma students. More than 80,000 polytechnic and other diploma students will enjoy savings in card fares of up to $1.54 per journey.
MOT-FARES infographic 2019

Public Transport (PT) Fund and public transport vouchers (PTVs)

To ensure more resources are set aside to help those affected by fare increases, PTOs are required to make a one-off contribution of a portion of the increased fare revenue to the PT Fund as a form of sharing their gains with commuters.

In 2019, the eligibility guidelines were also revised to benefit 1 in 5 households, compared to around 1 in 10 households previously. 

Overall, the various concession schemes and public transport vouchers will help to keep public transport fares affordable for Singaporeans.

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