Updates aim to balance affordability with system sustainability
Singapore’s Public Transport Council (PTC) has commenced a review of the formula and mechanism for adjusting public transport fares, with the process expected to conclude by mid-2023. The revised framework will be implemented starting with the 2023 fare review exercise, the council announced on Monday (Aug 15).
This periodic review, typically conducted every five years, will assess the current fare adjustment formula’s effectiveness, considering shifts in commuting patterns and changes within the public transport industry. The council aims to strike a balance between keeping fares affordable for commuters and ensuring the financial sustainability of Singapore’s public transport system.
Stakeholder Engagement
The PTC will engage key stakeholders, including commuters, transport operators, labour unions, and industry experts, during the review process. For the 2022 fare review exercise, the existing formula will remain in use.
Current Fare Adjustment Formula
Introduced in 2018, the current formula determines the maximum fare adjustment based on these factors:
Core Consumer Price Index (CPI): Reflects inflation and accounts for 50% of the formula weightage.
Wage Index (WI): Measures changes in average monthly earnings, adjusted for Central Provident Fund (CPF) contributions, with a 40% weightage.
Energy Index (EI): A composite of diesel prices and electricity tariffs, contributing 10%.
Network Capacity Factor (NCF): Accounts for capacity provision versus passenger demand across the public transport network.
Productivity Extraction Factor: Based on 0.1% productivity gains by transport operators.
The formula for 2018–2022 is:
0.5 Core CPI + 0.4 WI + 0.1 EI – 0.1% + NCF
In 2018, the formula was updated to increase the weightage of CPI from 0.4 to 0.5, while reducing EI’s weightage from 0.2 to 0.1. The NCF was also introduced to reflect network capacity costs relative to commuter usage.
Next Steps
The review will likely introduce updates to reflect current industry challenges, such as rising operational costs and evolving commuter demands. More details will emerge as the council progresses with consultations and analysis.
