I refer to the report “Public transport fare adjustments to take into account bus drivers’ wage increase” (Channel NewsAsia, Dec 6).
It states that “Transport Minister Lui Tuck Yew said on Thursday public transport fare adjustments, due next year, will take into account the need to raise bus drivers’ wages.
Mr Lui was speaking for the first time in the aftermath of the illegal strike by bus drivers from China last week, and said public transport cost increases over the years have outpaced fare adjustments.”
Huge increase in profits?
If indeed “public transport cost increases over the years have outpaced fare adjustments”, how do we explain the fact that transport operators like SMRT’s profits increased from $89.5 million in FY2004 to $161 million in FY2011?
This is an increase of 80 per cent over the seven years, or an increase of 8.7 per cent per annum.
Despite all its problems last year, like the breakdowns, its profits only dropped to $119.9 million for FY2012.
However, its latest FY2013 first half (Apr – Sep 2012) results appear to indicate that its profits are rising again, to $69.8 million.
At this rate, its FY2013 full-year results may come in at around $139.6 million ($69.8 million times 2) or more.
It’s Return on Equity (ROE) increased from 17.6 to 17.8 per cent, from Apr – Sep 2011 to Apr – Sep 2012. I understand that this ROE may be relatively high compared to that of public transport companies in other countries.
Consider rising costs only?
The decision to raise fares again should not just be considered in relation to higher bus drivers’ wages or operating costs.
Consider profits too?
Shouldn’t some consideration br given to the operator’s profits as well?
Spend some of the $1b to keep fares from rising?
As to “So we need to see the relationship between any fare adjustment, wage increase, and any other forms of government support that we might be required to give to the operators”, isn’t this statement somewhat ironic and self-contradictory, because if the Government can spend over $900 million under the Bus Service Enhancement Programme to help the operators improve their bus services, why can’t some money be spent to keep fares from having to rise?
Consider affordability too?
Also, shouldn’t consideration be given to commuters’ affordability too?
In this regard, the real median wage increase of full-time workers was only over one per cent per annum, over the last decade or so (“2012 real income declined – 2.3%?”, Nov 30).
For the 20th percentile of workers, the real increase was zero over the last decade.
Fares increased 9 times in 11 years?
Against this, fares have been raised nine times over the last 11 years (Note: it is debatable whether the change to distance fares in 2010 was an increase or decrease. So, it may actually be 10 times).
Leong Sze Hian
