In considering any fare adjustment applications put up by operators, the PTC takes guidance from the fare review mechanism implemented since 2005. The principle is to go for small and regular adjustments. Rather than relying on cost increase justifications specific to each PTO, the maximum fare adjustment takes into account macro-economic factors, namely Consumer Price Index (CPI) and average national wage increases.

The fare formula also includes a productivity extraction which ensures that productivity improvements made by the PTOs are shared with commuters. More information on the fare regulation framework may be found on our website at http://www.ptc.gov.sg/services_fare.asp.

The QoS Standards for basic bus services are mandatory service standards that the two PTOs have to meet. The standards cover various attributes that relate closely to the actual travelling experience of the commuter.

There are 6 essential aspects of bus services the QoS standards covers:

Reliability, (in other words, the bus services run as scheduled by the public transport operators);

Loading (or how many passengers a bus can carry and whether it is over-crowded);

Safety;

Availability, e.g. service coverage and operation hours; Integration with other modes of public transport; and

Provision of service information.

More information on the QoS may be found at http://www.ptc.gov.sg/services_standard.asp

Improving service is part and parcel of the operators' ongoing obligation to commuters. It is in the PTO's interests to offer good service to their customers and increase the ridership.

The PTC also ensures that the PTOs continuously improve bus services to meet the rising expectation of commuters. The PTC has introduced a new set of Quality of Service standards for basic bus services and further tightened the standards. This helps to drive improvements in bus services. The PTC can also impose penalties if the PTOs breach the standards.

The QoS standards have been carefully calibrated to avoid increasing regulatory compliance costs to the PTOs unduly and at the same time, ensure that they provide adequate levels of service. Fare adjustments are based on a maximum fare adjustment formula determined by macroeconomic factors such as price inflation and wage growth and not a cost-plus formula where higher operating costs feed directly into higher fares. As such, the PTOs cannot adjust the fares to immediately pass on their costs to commuters.

The QoS standards ensures that even as PTOs continue to seek to keep costs low, they cannot do so by providing poorer services. They must ensure that their service levels to commuters are maintained. This is to commuters' benefit.

Help for the low-income group will continue to be rendered through a targeted approach such as the Government's assistance schemes, as well as the operator or community-led initiatives.

Under the Government's 'Many Helping Hands' approach, needy senior citizens can get help from the Citizens Consultative Committee (CCC) ComCare Fund and other community assistance schemes. The Government has also committed $10 million to a Public Transport Fund in October 2007 to be given out over three years to provide additional help to lower-income households.

The PTOs have also done their parts to contribute resources in the form of public transport vouchers to help low-income families in coping with the fare increase by defraying some of their costs.