I refer to the recent Parliamentary proceedings on 17 February, reported in Hansard.
Replies not reported in media?
I found some interesting replies to questions that I do not remember reading in the media.
JUSTIFICATIONS FOR RECENT PUBLIC TRANSPORT FARE ADJUSTMENTS
45 Mr Gerald Giam Yean Song asked the Minister for Transport whether the Ministry can provide the specific list of justifications submitted by each of the two public transport operators for their recent application to the Public Transport Council for fare adjustments.
Mr Lui Tuck Yew: In its applications to the Public Transport Council (PTC), SMRT indicated that overall operating costs for their bus and train operations had increased by almost 30% between 2010 and 2012. This is largely attributed to an increase of about 35% in their energy costs, and about 28% increase in manpower costs arising from additional recruitment and salary increments. Increased expenditure to maintain an ageing MRT network, and for mid-life refurbishment of the trains and infrastructure, has also impacted their finances.
Similarly, SBS Transit informed that their operating costs increased by almost 8% between 2011 and 2012, with manpower seeing the most significant increase of over 11%. In the first nine months of 2013, rising costs for the North-East Line, and start-up costs for the new Downtown Line, have resulted in their train operations going into the red.
Both operators also highlighted the growing losses in their bus business.
Transport operators’ applications to increase fares can’t be made public?
In my view, the Minister may not have answered NCMP Gerald Giam’s question. I believe Mr Giam was asking for a specific list of the reasons given by the transport operators for the fare hike – kind of like asking for their applications for the fare increase to be made public.
The reply was basically that it was due to increased costs.
Self-contradiction – fare increase due to costs, but financial penalties’ costs don’t count?
Now you will see that in almost the same breath on the same day, the Minister seems to be contradicting himself in the following reply to another question – when he basically said that financial penalties imposed on PTOs (which are also costs) are not a factor in determining whether to increase fares?
FINANCIAL PENALTIES IMPOSED ON PUBLIC TRANSPORT OPERATORS
Mr Lui Tuck Yew: SMRT was fined a total of $2.2 million for incidents occurring in 2011; $0.5 million for incidents occurring in 2012; and $0.36 million for incidents occurring in 2013. SBST was fined $0.4 million for incidents occurring in 2012; and $0.25 million for incidents occurring in 2013.
As publicly-listed companies, the public transport operators (PTOs) account for all regulatory penalties in their annual reports and income statements.
The Public Transport Council (PTC) does not consider the financial penalties imposed on the PTOs when deciding on fare adjustments. The fare adjustment quantum is determined using the fare formula, which is based on macroeconomic indicators such as the Core-Consumer Price Index, Wage Index, Energy Index and a Productivity Extraction component. The fare formula clearly does not allow the PTOs to pass on the cost of financial penalties to commuters through higher fares.
Leong Sze Hian