…And why this hike isn’t
Jul 15, 2011
…And why this hike isn’t
I REFER to the bid by transport operators to increase fares (‘Transport operators seek fare increase’; Tuesday).
I support the call by Mr Cedric Foo, the new chairman of the Government Parliamentary Committee for Transport, to review the fare adjustment formula.
Surely, fares should not be going up again this year, as they last did in 2008, when we have had three consecutive years of almost negative real median wage increase.
The real median wage increase was -1.2, -3.2 and 0.5 per cent for 2008, 2009 and last year respectively. Moreover, inflation this year is now running at 4.5 per cent. Adding the current requested fare increase of 2.8 per cent to 2008′s 1.7 per cent gives a total increase of 4.5 per cent.
In contrast, the real median wage increase over the last three years was -3.9 per cent. This means that for about half of resident workers, their real wage increase may have been even less than -3.9 per cent.
This statistic should be a primary consideration in assessing the fare-increase application, as the lower-income have probably no choice but to take public transport.
SMRT’s profits after tax increased from $56.8 million to $161.1 million, from FY2002 to FY2011. This is an increase of 184 per cent or an annualised increase of 12.3 per cent.
In fact, SMRT’s profits have been increasing every year, except for a small drop of $1.8 million or just about 1 per cent less than its record profits the previous year.
SBS Transit’s profits after tax increased from $34.6 million to $54.3 million, from 2002 to last year. This is an increase of 57 per cent or an annualised increase of 5.8 per cent.
With regard to operators citing significant cost pressures despite increased efforts to lower costs and increase productivity, since SMRT’s revenue has been increasing at 7.7 per cent per annum over the past nine years, vis-a-vis a 7.4 per cent increase in total operating expenses, is the reason of ‘cost pressures’ justified?
Similarly, SBS’ revenue increased by 3.4 per cent per annum over the past eight years, vis-a-vis a 3.3 per cent increase in total operating expenses.
By any measure relative to the performance of other listed companies in Singapore, or other public transport companies in the world, SMRT’s financial performance has been spectacular.
Shouldn’t public transport be a public good and service, rather than a money-making machine for shareholders?
Leong Sze Hian