Fare hikes needed to keep bus contracting model sustainable

ALL content used in this not-for-profit blog remain the property of their respective owners.
http://www.todayonline.com/singapore/fare-hikes-needed-keep-bus-contracting-model-sustainable-lui?singlepage=true

Regular fare increases will be needed and new routes could be cancelled if there are insufficient passengers after some months, in order to make sure that the new bus contracting model is sustainable.

Transport Minister Lui Tuck Yew made these points yesterday in Parliament, in response to concerns raised by several Members of Parliament (MPs) on how much taxpayers’ money will be needed to run it.

He also revealed that the Land Transport Authority (LTA) is working on a framework to assess the passenger threshold a new route ought to meet before it can be operated.

Mr Lui said: “The cost of the overall bus system has to be paid for either by commuters in the form of fares or by taxpayers in the form of Government subsidies.”

He added: “There is surely no free lunch ... regular fare adjustments are still necessary to ensure the overall financial sustainability of the public transport system.”

The overhaul of the bus industry was announced in May. Under the new model, the Government will take over all bus operating assets and infrastructure and contract out bus services.

Mr Lui declined to reveal the Government’s budget to operate the system and how much it was prepared to subsidise the routes at this juncture, noting that doing so may skew the bids.

Nevertheless, he said the LTA would have to spend about S$150 million to S$200 million to buy about 400 buses for each package of routes. This translates to about S$1.8 billion to S$2.4 billion to pay for buses for the 12 packages in all that will be contracted out under the model.