Report of the Committee on Fare Review Mechanism

• Main Author: PHANG, Sock Yong
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2005
• Subjects: Public transport; fare review; transportation costs; Singapore; Asian Studies; Public Economics; Transportation
• Online Access: https://ink.library.smu.edu.sg/soe_research/2013; https://ink.library.smu.edu.sg/context/soe_research/article/3012/viewcontent/Fare_Review_Mechanism__Feb_2005.pdf
• Institution: Singapore Management University

Today, public transport fares are reviewed annually and adjustments, if any, are capped by the “CPI + X” formula, where CPI is the change in the Consumer Price Index over the previous year and X accounts for the net effect of wage changes after deducting productivity gains. For the period from 2001 to 2005, X was determined to be 1.5%. While this mechanism has worked well in keeping public transport fares affordable, the formula lacks transparency and is not easily understood by the general public. Commuters often question the need for the “X” element given that the public transport operators (PTOs) are already compensated for inflation in the formula.