LUI TUCK YEW: COMMUTERS ARE NOT WILLING TO PAY MORE FOR BETTER SERVICES

There may have been suggestions that public transport fare increases may be more palatable if service levels are increased, but outgoing Transport Minister Lui Tuck Yew does not think that commuters here are willing to pay more for better service.

He cited a survey done earlier by his ministry on taxis, which found that, in general, commuters are unwilling to pay higher fares in return for better services.

The Government uses a mix of fare increases and subsidies to keep fares at an acceptable level. Mr Lui noted that the Government’s outlay for the S$1.1 billion Bus Service Enhancement Programme (BSEP) was treated as a subsidy. If it had not stepped in, commuters would have to fork out between 12 cents and 15 cents more per trip in fares.

“We should try as far as possible to not have (commuters) pay a lot more (for better services). We have got to balance it,” he said.

Under the BSEP, which was rolled out in 2012, a total of 1,000 Government-funded buses will ply the roads, with 750 buses to be injected into the public transport network by the end of this year.

Mr Lui said the authorities here monitor public transport fares in two ways: How they compare with fares in other cities and how they change over the years. Monthly public transport expenditure as a percentage of household income has been falling over the years, he noted.

Earlier this month, Mr Lui said that come December, public transport fares will be reduced by up to 1.9 per cent because of falling fuel prices. This is bigger than the expected 1 per cent reduction announced at the beginning of the year. The adjustment also takes effect earlier than usual. Typically, fare adjustments are made in April, with this year’s adjustment — an increase of 2.8 per cent — implemented just four months ago.

The existing fare formula used by the Public Transport Council is effective from 2013 to 2017. The recent overhaul of the bus industry would require the formula to be relooked.

The new bus contracting model — under which the Government will own all bus operating assets and collect the fares, while operators run the services in return for a fee — will be implemented in phases, starting from the middle of next year.

Mr Lui said the data following the implementation of the new model will be useful for the next fare formula review.

“You then have a better idea … of what’s the fare revenue for the package of routes versus how much the Government has to pay for it. We will be able to see what’s the subsidy level for each of the different packages.”