SMRT: Due to lower increase in rail ridership/revenue, MRT fares must be increased

Regardless of a screwed-up MRT system, the government is hell-bent on increasing fares.

This is because every government agency/GLC providing public goods/services is managed on a cost-recovery basis.  Since billions have been spent on a poorly maintained MRT system, PAP will try to recover the amount from commuters.

To make matters worse, SMRT’s bottom line has also been hit: PAP’s PWP has not panned out as planned.  According to the PWP, the population should increase by about 90,000 annually to hit 6.9 million by 2030.  This would naturally increase rail ridership and ultimately SMRT’s bottom line.

But that’s only in theory.

Reality: The population did not increase as planned due to forces beyond PAP’s control.

In June 2013, the population was 5.4 million.  Four years later, the population was supposed to have increased to 5.76 million in June 2017.  It did not and at 5.61 million, headcount was short of more than 100,000.

Since SMRT’s revenue growth model is heavily reliant on PAP’s population growth model, its bottom line (rail) has naturally taken a hit.

Over a 5-year period, its latest increase in ridership – 12 million – is the lowest.  Instead of increasing, the total passenger-kilometer traveled has even decreased (reduced fare revenue).

The PAP-appointed PTC has recently revised the fare formula to help increase SMRT’s bottom line.  (Today: “Public transport fares could rise after revision to fare formula”)   It will of course continue to review the formula for obvious reasons.

When PTC chairman Richard Magnus – a retired judge – could utter rubbish to support another fare hike, this should be clear: PAP is not done with screwing up commuters. 😦

1smrtdImage source

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