Get the full story from The Straits Times.
Here is the full press release from the FRMC:
The Fare Review Mechanism Committee, appointed by the Government in June 2012, has completed its work and submitted its report to the Minister for Transport, Mr Lui Tuck Yew. The Committee , which was led by former Senior District Judge, Mr Richard Magnus and 13 other Members of diverse backgrounds, has recommended a holistic set of improvements with the aim of keeping public transport fares affordable and ensuring that the public transport system remains financially sustainable.
For the first time, instead of leaving it largely to the PTOs to propose concessions schemes, the FRMC has recommended a public transport concessions framework for the Government to consider, with significant en hancements to increase the coverage of th e various concession schemes.
Chairman of the FRMC, Mr Richard Magnus said, "Should our recommendations on concessions be accepted and implemented, we would potentially add about half a million new beneficiaries to the current 1.2 million commuters receiving some form of public transport concessions, or about a 40 per cent increase.
Of the current 1.2 million existing commuters with concessions, half a million of them will enjoy enhanced concessionary benefits above what they are already enjoying. In short up to one million commuters may benefit from the improved public transport concessions framework". Affordable Fares for Commuters 3 The FRMC consulted various stakeholders and studied comprehensively the key concerns of fare affordability for general commuters , while paying more attention to the disadvantaged groups.
After much deliberation, the FRMC is making the following recommendations to assure commuters that public transport fares would remain affordable :
(i) Two New Concession Schemes The Committee proposed two new concession schemes - one for low income workers and the other for persons with disabilities . The schemes are to help these two commuter groups defray their transport costs, and for Government to fund these two new schemes without imposing this as a financial burden on the Public Transport Operators (PTOs) .
(ii) Enhanced Benefits for Existing Scheme s The FRMC has proposed the following enhance d benefits for existing schemes :
- Free travel be given to children below 7 years of age instead of using the current 0.9-metre height criterion ;
- Monthly Concession Pass (MCP) be made available to senior citizens in addition to the current concessionary fares that they enjoy on a per ride basis;
- Adjustments to prices of the various student MCPs to make the m more beneficial to users , with Polytechnic students in particular enjoying a significant discount in the pricing for their MCPs ;
- Monthly Travel Pass (MTP) be made available to adult commuters t o help frequent and heavy public transport users save on their monthly expenditures on bus and train rides and better assure fare affordability not just for the average user but also for these heavy public transport users ; and
- Extension of eligibility of current student concession s to Singaporean s studying full-time locally , including those who are studying in private institutions.
(iii) Additional Indicator to Track Fare Affordability for Low Income Households For better tracking of the fare affordability trend, especially of the low income households, the Committee proposed monitoring the fare affordability indicator of the second decile households. This is in addition to the current fare affordability indicator for the second quintile households which PTC is currently already monitoring .
The changes to the monthly household expenditure on public transport as a proportion of the respective income group s , as tracked by the Department of Statistics' Household Expenditure Survey , will be monitored closely by the Public Transport Council (PTC) .
(iv) More Help from the Public Transport Fund The Public Transport Fund was set up to help needy families adjust to the impact of public transport fare increases. Currently, the primary source of funding for the Public Transport Fund comes from the Government . The PTOs currently contribute to the Fund voluntarily.
To provide more resources to this Fund , and to put in place a formal mechanism for the PTOs to "share in their gains" with commuters, the Committee proposed that as a guide, the PTC could consider mandating the PTOs to contribute a portion of the fare increase they receive (the portion will range from 20 per cent to 50 per cent of the expected increase in fare revenue for that year) to the Public Transport Fund.
In addition, the Government could also continue to co-fund appropriate contributions to the Public Transport Fund , while financial penalties imposed on PTOs' service lapses should also be channel l ed to wards th is Fund. Towards a Sustainable Public Transport System 4 For the public transport system to remain financially sustainable, fares have to be adjusted regularly to address the mounting pressure from operating cost increases. More importantly, he travel needs of commuters cannot be well - served if public transport operations , which are to be run by commercial entities to ensure financial discipline and better ensure a cost - effective public transport system, cannot turn in a reasonable (but not ex cessive) profit margin on a sustained basis .
The Committee made the following recommendations after careful consideration, to assure commuters that public transport system is sustainable :
(i) A More Responsive Fare F ormula Compared to the previous fare adjustment formula, the proposed new formula will have a new Energy Index (EI) component. This is because energy costs have become a significant part of the PTOs' overall operating costs . The core Consumer Price Index (cCPI) will replace the previous CPI component to exclude some items , such as private transport and housing, as these are not relevant to public transport. The Wage Index (WI) component will remain unchanged. The Productivity Extraction will also be retained. The new fare form ula to compute the quantum of annual fare adjustment , which will apply from 2013 to 2017 , is as follows:
(ii) Regular Fare Adjustments The Committee proposed that fares be adjusted regularly, through annual fare review exercises, to account for operating cost increases, such as changes to wage and fuel costs, and to enable the PTOs to continuously improve their services. H aving annual fare review exercises will also help to mitigate adverse impact of fare adjustments on commuters since significant hikes in fares may be avoid ed.
(iii) Roll-over of Fare Adjustment Quantum The Committee proposed that the PTC be given the discretion to roll over a portion of the quantum of fare adjustment in a particular year to the next fare review exercise. In addition, the PTC should also be given the discretion, under extenuating circumstances (such as adverse economic conditions, high unemployment etc) , to defer completely the fare review exercise of that year .
The fare quantum of the year that is not granted will then be carried forward to the next fare review exercise. The purpose of having this flexible mechanism is to safeguard commuters' interest s by smoothening out large fare increases yielded by the fare formula , while allowing the PTOs to be fairly compensated for their cost increases over the long-term.
The Committee consulted a diverse group of key stakeholders in the process of formulating its recommendations to improve fare concessions, the fare adjustment formula and the fare mechanism. The Committee also conducted a household survey , involving 4,600 households, for views on possible recommendations and suggestions before finalizing their Report . The Committee wishes to thank all who have contributed to the review and participated in the survey.
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