NUS Econs Alumni: Public Transport Council (21 Nov 2008)


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The challenges of public transport
from the viewpoint of the PTC
-given by Mr Gerard Ee

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  • If we were to apply this characteristic family back in retrospect over the last 15 years, we can see from the green line that public transport expenditure has not changed significantly. On the other hand, income (as shown by the red line) has been steadily increasing, except in 2003 when it took a slight dip. The blue line shows the proportion of income spent on public transport expenditure. This has improved steadily over the last 15 years.
  • With distance-based throughfares, commuters will pay a fare according to the distance travelled, regardless of the number of transfers made along the way. Why are we doing this? It is to provide better choices to all commuters. Currently, commuters choose direct or transfer journeys, depending on their preferences. However, their choices are distorted because of the fare system, which makes a transfer journey more expensive than a direct journey, even if both cover the same distance and the same origin and destination. Transfers cost more, because the 40-cent transfer rebate does not fully cover the extra cost of boarding the second leg of a transfer journey. Under distance-based throughfares, we will eliminate this distortion. Same distance, same fare. Commuters will then be better able to choose travel options that suit them best. But this is a big change. To make a gradual transition, and allow commuters time to adjust, we are making the change over 2 years, starting from this year.
  • The government understands that for needy families, even these dollar amounts can be significant. That is why the Government has worked together with the public transport operators to distribute 130,000 public transport vouchers, worth $40 each, to needy families this year. This is more than last year’s voucher distribution. Even if there are more applicants than the 130,000 vouchers, assistance is available through the CCC ComCare Fund. Hence needy families who need assistance can still continue to apply at their local Community Centres or Community Club, and they will be given help if eligible.
  • NUS Econs Alumni: Public Transport Council (21 Nov 2008)

    1. 1. PUBLIC TRANSPORT COUNCIL 14/4/2008 The challenges of public transport from the viewpoint of the PTC 21 November 2008 By Mr Gerard Ee PTC Chairman
    2. 2. <ul><li>Overview of the PTC </li></ul><ul><li>Key challenges </li></ul>Outline of briefing 14/4/2008
    3. 3. About the PTC <ul><li>Formed in 1987 </li></ul><ul><li>An independent regulator of </li></ul><ul><ul><li>- Bus services & bus operations </li></ul></ul><ul><ul><li>- Bus & train fares </li></ul></ul><ul><ul><li>- Ticket payment services in public transport </li></ul></ul><ul><li>PTC is mandated to balance the need to safeguard commuters’ interests with long term viability of Public Transport Operators (PTOs) </li></ul>14/4/2008
    4. 4. Simple objectives, challenging mandate <ul><li>PTC seeks to: </li></ul><ul><ul><li>- assure the quality of basic bus services </li></ul></ul><ul><ul><li>- keep bus & train fares affordable </li></ul></ul><ul><ul><li>- safeguard public interest in the mode of payment of public transport fares </li></ul></ul>14/4/2008
    5. 5. Partnership in regulation 14/4/2008 Commuters Basic Bus Optrs Train Optrs Other Bus Optrs Taxi Optrs Service Providers Integrated Services EZ-Link Transit Link PTC PTC Act Regulators LTA LTA Act RTS Act RT Act Advisory, Support & Agent
    6. 6. <ul><li>How to ensure affordable fares? </li></ul><ul><li>How to ensure bus quality of service? </li></ul><ul><li>How to manage trade-offs moving forward? </li></ul>3 key challenges 14/4/2008
    7. 7. How to ensure affordable bus and train fares? 14/4/2008
    8. 8. a. Put in place a fare review mechanism <ul><li>PTC approves maximum bus & train fares </li></ul><ul><li>- guided by a fare review framework </li></ul><ul><li>Fare review mechanism adopted since 2005 </li></ul><ul><li>Deterministic fare cap protects commuters </li></ul><ul><li>On-going challenge to balance </li></ul><ul><li>commuters’ interests & PTOs’ long-term viability </li></ul>14/4/2008
    9. 9. Fare review mechanism 14/4/2008 <ul><li>A formula to cap fare adjustment </li></ul><ul><li>- cap based on macro-economic factors: CPI and WI </li></ul><ul><li>- commuters are protected as operators cannot passed on their cost increases by raising fares </li></ul><ul><li>PTC’s flexibility to vary or reject: </li></ul><ul><ul><li>- adverse economic conditions (GDP, unemployment) </li></ul></ul><ul><ul><li>- significant deterioration in affordability </li></ul></ul><ul><li>Reality check using ROTA </li></ul><ul><li>Affordability indicator for tracking </li></ul>
    10. 10. Track fare affordability 14/4/2008 <ul><li>Affordability Indicator - % of household income (2nd quintile) spent on bus/train travel by a characteristic family </li></ul>
    11. 11. b. Update the fare formula regularly <ul><li>Fare adjustment formula recently reviewed </li></ul><ul><li>- the revised formula to be applied from 2008 to 2012 </li></ul><ul><li>Max Fare Adjustment = Price Index – 1.5% </li></ul><ul><li>Price Index = 0.5 ( ∆ CPI) + 0.5 ( ∆ WI) </li></ul><ul><ul><li>CPI = Consumer Price Index </li></ul></ul><ul><ul><li>WI = Average monthly earnings for all workers, adjusted for any change in employer’s CPF contribution </li></ul></ul><ul><li>“ - 1.5%” is the productivity extraction set for 5 years </li></ul><ul><li>- higher factor set: 1.5% compared to previous 0.3% </li></ul>14/4/2008
    12. 12. Why distance-based through fares? <ul><li>Distance-based through fares by 2009 </li></ul><ul><ul><ul><li>Journeys that cover the same distance will have the same fares </li></ul></ul></ul><ul><li>Distance-based through fares provides better choices to all commuters </li></ul><ul><ul><ul><li>Currently, commuters choose different types of journeys </li></ul></ul></ul><ul><ul><ul><li>Transfers more expensive, even if same route and same distance as direct journeys </li></ul></ul></ul><ul><ul><ul><li>Commuters will be better able to choose options that suit them </li></ul></ul></ul><ul><li>Introduced over 2 years to allow a gradual transition </li></ul>
    13. 13. c. Have targeted help for needy families <ul><li>While fares remain affordable, needy families may need more help to adjust to fare increases </li></ul><ul><li>Government and the operators have provided for 130,000 public transport vouchers, of $40 each, to be distributed to needy families </li></ul><ul><ul><ul><li>In 2007: 100,000 vouchers of $30 each </li></ul></ul></ul><ul><li>Additional assistance is available beyond the 130,000 vouchers for needy families </li></ul><ul><ul><ul><li>CCC ComCare Fund is available to provide additional assistance for needy families </li></ul></ul></ul>
    14. 14. How to ensure q uality basic bus services? 14/4/2008
    15. 15. 14/4/2008 Route-based Operator-based * Daily basis ^ 1 not announced a. Set realistic QoS Standards Operating Performance Standards (6) Service Provision Standards (14) Reliability Loading Safety Scheduled trips (1) *Headway adherence (2 ^ ) * Average loading (1) Accident rate (1) Bus breakdown (1) Availability Integration Information 1st, last services (2) Spatial coverage (1) Connectivity (3) Operating hr (1) Headways (3) Pre-trip info (I) Enroute info (2) Timetables (1) ( ) denotes no. of parameters Attributes
    16. 16. Progressively raise the standards <ul><li>Tightening of QoS Standards in Jul 07 </li></ul><ul><li>- increased peak period frequency of all basic bus services to run at 10 minutes (from previous 15 minutes) by Aug 09. </li></ul><ul><li>Introduction of a separate and higher QoS standard for peak hour feeder bus services in Apr 08 </li></ul><ul><li>- at least 90% (from previous 85%) of all feeder bus services to run at headway of not more than 10 minutes during weekday peak hours by Aug 09 </li></ul>14/4/2008
    17. 17. b. Put in place a penalty framework <ul><li>Penalty framework w.e.f. Oct 2007 </li></ul><ul><li>- operators fined twice (Apr 07 & Oct 08) based on review of QoS performance results </li></ul><ul><li>- next 6-monthly performance results in Apr 09 </li></ul><ul><li>Challenge of ensuring practicality of standards </li></ul><ul><li>and yet keep the increase in cost </li></ul><ul><li>within means of the operators </li></ul><ul><li>and hence keep bus fares affordable. </li></ul>14/4/2008
    18. 18. 14/4/2008
    19. 19. c. Consider incentive framework <ul><li>Centralised planning of bus network </li></ul><ul><ul><li>LTA to take over from operators </li></ul></ul><ul><li>Introduce contestability for the market </li></ul><ul><ul><li>LTA to call tenders for bus services and take over bus licensing from PTC </li></ul></ul><ul><li>Performance-base incentive and penalty framework being studied </li></ul><ul><ul><li>Part of licence contracts </li></ul></ul>14/4/2008
    20. 20. How to manage trade-offs moving forward? 14/4/2008
    21. 21. a. Need to consult and engage <ul><li>Preparation of bus master plan </li></ul><ul><ul><li>A new engagement framework that can involve operators, grassroots/community, experts, general public </li></ul></ul><ul><li>Challenge to take on board appropriate inputs and secure buy-in so that the bus network can best meet diverse needs while ensuring financial sustainability of contract packages </li></ul>14/4/2008
    22. 22. b. Need to look at new media <ul><li>Calibrated engagement to explain trade-offs to netizens </li></ul><ul><ul><li>Tracking of views posted on credible online platforms – Sraitstimes and mediacorp. </li></ul></ul><ul><li>Challenge to decipher serious views or trends (from chatters) that warrant responses or intervention so as to manage perception and expectation </li></ul>14/4/2008
    23. 23. Summary <ul><li>PTC’s mandate is to balance commuters interest and long term viability of operators </li></ul><ul><li>Key challenges in ensuring affordability, bus services and managing trade-offs </li></ul><ul><li>There are simply no easy answers </li></ul>14/4/2008
    24. 24. Visit our website at (Annual Report is downloadable) 14/4/2008
    25. 25. Thank You 14/4/2008