He didn’t get the memo….
SINGAPORE: Public transport operators need to remain profitable to pay for future capital expenditure, and being profitable is an incentive for them to increase their efficiency, said Transport Minister Lui Tuck Yew in Parliament on Friday (Feb 13).
He was asked by some Members of Parliament (MPs) on the need to increase public transport fares if operators were reaping profits.
Mr Lui also said that in deciding on fare increases, the Public Transport Council takes into account a few factors, including how fares compare to other cities, and the percentage of household income that goes towards public transport.
The Public Transport Council will also look at balancing affordable fares with ensuring the financial viability of the system, he said.
Public transport fares are set to increase by 2.8 per cent from April.
“SMRT, for example, has significant future capital commitments from now to 2019, somewhere in the region of S$2 billion,” said Mr Lui “They have commitments to buy over trains and all the other projects we have spoken (about) in previous Parliament sessions. This is more than three times the cumulative profits it made in the last five financial years. ”
MP for Nee Soon GRC Lee Bee Wah also asked if the Transport Ministry plans to revise the fare review formula.
“I think it’s always useful to allow the formula to run for a number of years,” replied Mr Lui. “We have had this formula running since 2013. I think it’s useful for it to continue until 2017, and we’ll do a review then.”
“Now I hear a point that as long as they are profitable, you cannot allow them to increase fares,” he noted. “Hence we come back to the question of what incentive therefore is there for them to be even more efficient, more productive which ultimately benefits consumers.”
Mr Lui said both SMRT and SBS Transit do not make high profits from running buses and trains. Rather, they remain profitable as a result of income through channels such as rentals and other commercial operations.
“Stones.Houses.Glass,” said Mdm Salmah, 47 a housewife.