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2020 Fare Review Exercise
What will be the key changes to my fares as a result of the Fare Review Exercise 2020?
Given the ongoing COVID-19 pandemic and poor economic outlook, PTC has decided to not adjust public transport fares for the 2020 Fare Review Exercise (FRE). Commuters will see no change to their bus and train fares from end 2020 until the next FRE.
The fare adjustment quantum, which PTC has decided not to implement this year, will be rolled over in full to the next FRE in 2021.
What is the fare adjustment quantum for the 2020 FRE? Why did PTC decide not to adjust fares in this year’s exercise?
Based on the fare review formula applicable from 2018 to 2022, the maximum allowable fare adjustment quantum for the Fare Review Exercise (FRE) 2020 is 4.4%.
However, to help commuters mitigate the impact of COVID-19 and the economic downturn, PTC has decided not to grant any fare adjustments in this year’s FRE and roll over the fare adjustment quantum in full to the next FRE in 2021.
With this decision, commuters will see no change in their public bus and train fares from end 2020, until the next FRE.
With the 4.4% fare quantum rolled over to the 2021 FRE, and the likelihood that NCF will be high due to the decrease in ridership during COVID-19, will commuters see a large increase in fares next year?
PTC will continue to monitor the macroeconomic indices and prevailing economic conditions closely. We will also continue to balance fare affordability and financial sustainability, before arriving at its decision for future fare exercises.
As a result of the COVID-19 pandemic, our economy is already seeing a downturn in 2020. The macroeconomic indicators in the fare formula will likely be negative for next year’s FRE. Since the beginning of this year, we have also seen declining oil and energy prices.
The significant drop in ridership would impact the Network Capacity Factor (NCF). As the NCF was not designed to account for exceptional circumstances, PTC will conduct a mid-term review on how NCF ought to be applied, or whether it should be partially or totally excluded, when considering affect next year’s fare adjustment.
Why didn’t the PTC opt to reduce fares instead?
Given the challenging economic conditions, PTC has decided to roll over the 4.4% fare adjustment quantum in full to keep fares unchanged and help commuters through this difficult period. Nevertheless, there is a need to fare affordability with financial sustainability.
Even prior to COVID-19, the cost of running our public transport system exceeded fare revenue collection. Besides the cost of civil infrastructure, which is fully borne by the Government, the Government was expected to spend close to $1 billion to renew and upgrade rail operating assets, and another $1 billion to subsidise public bus services annually over the next five years. This means that on average, more than $1 of every public transport journey is paid for by taxpayers through the Government. Every additional taxpayer dollar spent on public transport takes away funding from other national priorities such as education and healthcare.
Why are fares not reduced during COVID-19 for the concessionary groups (i.e. students and senior citizens) and the low-income groups who may be struggling to cope with the effects of the pandemic?
Public transport is an essential service that supports daily needs. It continues to operate during the COVID-19 pandemic, even with reduced ridership as commuters are encouraged to stay home.
To keep fares affordable, there are nine concession schemes which offer substantial discount on bus and train fares. Senior citizens enjoy up to 55% discount, while students enjoy up to 70% discount off adult fares. There are also existing concession schemes for Lower-Wage Workers and Persons with Disabilities.
The Government will also extend the application deadline for the 2019 Public Transport Voucher exercise from 31 October 2020 to 31 January 2021, to allow eligible households more time to apply for the vouchers at their local community clubs/centres. To further help low-income households mitigate the impact of the economic downturn, more than 30,000 low-income beneficiaries under the ComCare Short-to-Medium-Term and Long-Term Assistance schemes will also receive PTVs directly.
With the extension of the PTV application period, can households who require more help apply for additional vouchers?
The 2019 PTV application timeline has been extended by three months with the same qualifying criteria. Eligible households that require more help can apply for additional vouchers through their local community clubs/centres, from now until 31 January 2021, even if they have applied before. The Citizens’ Consultative Committees (CCCs) will assess each application and can provide additional PTVs to households which may be deemed to need more help.
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