Public transport fares could increase by up to 10 cents next year, said the Public Transport Council (PTC) as it commences with the annual Fare Review Exercise for 2019.

This is the maximum increase that can be allowed under the current fare formula, which came into effect last year and will be in place until 2022.

In a statement, the PTC said the double-digit increase in energy prices is a major contributing factor to the potential fare hike. It added that other costs, such as the wage index and the consumer price index, have also increased over the past year.

The PTC also pointed out that Singapore’s public transport has improved significantly over the last five years, with the introduction of more than 1,000 buses and 200 trains. It reflected how the MRT network has achieved one million kilometres between delays, which is a seven-fold improvement from 2015. However, these improvements have come with an increase in the cost of operations for public transport. “Over the last five years, the gap between costs and fares has been widening. This gap has, thus far, been funded by the Government together with the rail operators,” said the PTC.

In July 2019, Transport Minister Khaw Boon Wan had said the Government is currently subsidising more than 30 per cent of public transport operations, and that higher fares are necessary to keep these subsidies in check. Over the next five years, the Government will spend around $4.5 billion to renew rail operating assets and provide $5 billion in subsidies for public bus services.

In its deliberations, PTC said it will continue to strike a fair balance between fare affordability and the financial sustainability of the public transport system. Special attention will be given to concession groups such as the elderly and needy commuters.

A decision on the fare adjustment quantum will be announced in the last quarter of this year.