PUBLIC TRANSPORT COUNCIL (AMENDMENT) BILL

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PUBLIC TRANSPORT COUNCIL (AMENDMENT) BILL: Order for Second Reading read.

The Minister for Transport (Mr Raymond Lim Siang Keat): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the Bill seeks to amend the Public Transport Council Act (PTC Act) to enable

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the PTC to support the development of a more integrated public transport system, by introducing distance-based through fares.

Our public transport system is based on a hub-and-spoke model. This is a much more efficient model than having many direct services. How this works is that we have more frequent and faster services bringing commuters to a transport hub and then onwards to their destination, with the same amount of resources.

This will deliver better outcomes for commuters because more frequent feeder services will mean shorter waiting times for commuters. Making transfers can also reduce overall travel time, especially for longer journeys. This is the correct model for a compact city state like Singapore.

Going forward, we will enhance our hub-and-spoke public transport system to address waiting time, travel time and crowding levels, which Members often raise in this House, as key areas of concern to commuters.

Transfers are part and parcel of a hub-and-spoke system. However, our fare structure today is not fully integrated and does not support transfers. In fact, a commuter pays more to make a transfer journey compared to a direct journey, even if he travels on a comparable route over the same distance. Although he receives a rebate of 25 cents whenever he makes a transfer between bus and rapid transit, or between buses, this does not fully cover the additional cost of the transfer. Commuters who make transfers today therefore bear a financial 'penalty' for making a transfer. In effect, revenues from transfer journeys cross-subsidise direct journeys.

A better, more integrated fare structure would be distance-based through fares: charging commuters based

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on the distance travelled, regardless of the number of transfers made. This would be more equitable for all commuters as it will eliminate any cross-subsidy between transfers and direct journeys. It would also benefit all commuters, whether they make transfers or not, in that all commuters would be given more choices over the routes for their journeys. They would not be penalised for choosing to make transfers if doing so were faster, more direct or provided a better travel experience, compared to having to wait for a direct service in order to avoid paying the "transfer penalty".

More importantly, distance-based through fares would make our public transport system more seamless. As transfers are part and parcel of a hub-and-spoke network, we should have a fare structure that removes the current impediments to making transfers. In addition, providing commuters with more choices and greater convenience will increase the attractiveness of public transport as a whole.

As the PTC already oversees matters related to public transport fares, it is the most appropriate agency to lead the integration of public transport fares. To that end, a new function has to be enacted in the PTC Act.

Sir, the PTC Act will be amended for the PTC to take on a new function: to drive fare integration by introducing distance-based through fares.

Clause 2 of the Bill expands the PTC's current functions under section 4 of the PTC Act, to include promoting and facilitating the integration of bus and Rapid Transit System (RTS) fares to ensure the provision of efficient public transport services and facilities. This will give the PTC the necessary mandate to integrate fares by introducing distance-based through fares.

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The key amendments arising from this new function are:

(i) The PTC to initiate and impose changes to the public transport fare structure and the apportionment of fare revenue among the public transport operators; and

(ii) The widening of its range of enforcement powers on its decisions on fares.

Let me elaborate and highlight the key provisions in the Bill.

First, the PTC will be able to initiate a review of the bus and RTS fares and make changes to the fares and apportionment of fare revenues, for the purposes of integrating public transport fares. This will be in addition to the PTC's current mandate in the annual fare revision exercise.

To do this, clause 5 proposes inserting two new sections to the PTC Act.

Section 24AA empowers the PTC to make structural changes to any fare by varying them, or imposing such changes as conditions to its approval of fares.

The PTC would also need to have powers to determine the rules for revenue-sharing among the public transport operators. This is meant to ensure the continued financial viability of the operators and the overall system, even as fares are being changed to a more integrated form. Section 24AA will, therefore, also provide the PTC with the power to impose conditions on operators with regard to the apportionment of fare revenues. Such conditions could also require the operators to publish the integrated fares for the benefit of commuters.

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These structural changes will affect many parties, especially the public transport operators who provide the services. To ensure due process in making these changes, we propose to insert a new section 24AB, which requires the PTC to give notice to and consult the relevant parties.

Once the PTC decides on the revisions in fares, it would need powers to enforce its decisions, to ensure the public transport operators comply with its decisions.

Clause 4 of the Bill amends section 24 of the Act to enable the PTC to take a wider range of enforcement measures if the operator does not comply with its decision. Depending on the gravity of the non-compliance, the PTC can decide to revoke its approval of the operators' fares, suspend its approval for a period not exceeding six months, impose a financial penalty not exceeding $100,000 or publicly censure the operator.

The PTC will be required to give notice to the operators concerned, and allow the operators to show cause as to why the PTC should not take action before carrying out the enforcement.

To align the current enforcement provisions with the changes, clause 3 of the Bill amends section 23 of the Act to make it clear that any public transport fares suspended by the PTC will be deemed not to be an approved fare. Clause 3 also clarifies section 23 to make it an offence to charge fares that are not approved by the PTC under the amended provisions of the Act.

The introduction of distance-based through fares will mean structural changes to our bus and RTS fares. This is necessary to better integrate our hub-and-spoke public transport system, and will benefit commuters by giving them more choices. By giving the PTC the necessary

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powers to integrate our fare structure and introduce distance-based through fares, it would help to realise our vision of a more people-centred land transport system.

Sir, I beg to move.

Question proposed.

4.07 pm

Mr Cedric Foo Chee Keng (West Coast): Mr Speaker, Sir, I rise in support of the Public Transport Council (Amendment) Bill introduced by the Minister for Transport.

Currently, commuters who make a transfer between buses, or bus and MRT, or the LRT and the MRT, face a transfer penalty, as the Minister pointed out. This arises because the current transfer rebate, a misnomer, of 25 cents, does not fully offset the boarding charge of 60 cents for the subsequent leg of a transfer journey. These commuters are effectively cross-subsidising direct journeys.

It has been reported that four in 10 commuters today make at least one transfer journey each day and they are not a happy lot. The need to make a transfer is inevitable in a hub-and-spoke system, as the Minister also pointed out. The alternative to hub-and-spoke system is to have direct services but the cost will be too prohibitive for a small city like Singapore. The proposed introduction of distance-based through fares and the removal of transfer penalties is therefore long overdue and represents a sensible and positive move.

Commuters who need to make transfers are already inconvenienced as their total journey time would be longer and yet, these commuters are being penalised for having to make a transfer. This should be stopped if we are to attract more to take public transport. Such commuters should be enjoying a full

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rebate of the boarding charge for any subsequent leg of their journey.

In the shipping or the airline business, if you ship something from Perth to Los Angeles and the container has to be transhipped in Singapore, you cannot charge the customer more. In fact, you might have to charge lower because of the time delay in transhipment.

If the PTOs want to rationalise the public transport system to reduce overall network cost, it should, at the same time, pass such savings on to those who are affected by such rationalisation. The proposed amendment is, therefore, an equitable and efficient way forward as part of MOT's strategic thrust of making public transport the choice mode. Moreover, Sir, I think there are other potential benefits beyond what we see, based on today's travel patterns. The benefit of distance-based through fares does not stop here. There are many other commuters who are currently not making transfers because they do not wish to pay the transfer penalty. With the removal of the transfer penalty, more commuters will take to the hub-and-spoke network which will further enhance its efficiency and make it work better. Also, hopefully, concession fares (monthly concession season fares and so forth) can be rationalised and offered seamlessly for commuters of both bus and rail.

Sir, while I support the Bill, I would like to ask the Minister a few questions regarding the Bill.

Firstly, could he highlight the number of commuters who could potentially benefit from the distance-based through fares?

Secondly, would the majority of six in 10 commuters that make direct journeys today be made to bear the burden of removal of the transfer penalty? And if so, does MOT have any plans to ease such a burden?

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Thirdly, for commuters to reap the benefits of a distance-based through fare system, the hub-and-spoke system needs to work better. On the Government's part, what is being done to improve our hub-and-spoke system further, especially the capacity of our bus and MRT terminals which act as transfer hubs today because we can envisage that these terminals would be handling much more traffic than they are currently handling?

Also, the Bill seeks to enable the PTC to take various enforcement measures, including imposing a financial penalty of up to $100,000. The Minister did mention there are other measures that the PTC can take, like revoking the licences of the PTOs. But such measures are draconian in nature and have public interest implications. Can I ask the Minister whether the $100,000 penalty is sufficient to ensure compliance of PTOs without resorting to more draconian measures?

Sir, in conclusion, I strongly support the Bill because the new framework will pave a more equitable way forward as part of MOT's strategic thrust of making public transport a choice mode. At the same time, the hub-and-spoke system has to be further improved in tandem and the new framework should not come at the expense of commuters who make direct journeys.

Sir, I support the Bill.

4.13 pm

Mr Ong Kian Min (Tampines): Mr Speaker, Sir, with firm conviction that the integration of bus and rail fares will mark an important milestone in the continuing improvement of our public transport system. I rise in support of the proposed amendments.

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Economic and population growth are two compelling reasons to raise the bar on our public transport system. As we plan for a global city that 6.5 million people can proudly call home, we also have to plan for a transportation system that will take them anywhere within the city as easily as possible. More immediately, rising fuel costs, coupled with plans to lower the vehicle population growth rate to 1.5% per annum as room for road expansion becomes more limited, mean that the cost of private car ownership and usage will increase over time and become less practical for many. Public transport must be improved so that people are able to move and travel conveniently and comfortably on buses and trains without overstraining their budget.

It is timely that we embark on a major revamp of our public transport system to bring about a people-centred system as set out in the Land Transport Masterplan. To succeed, this major revamp requires fares to be integrated and bus services to be realigned and coordinated. With these amendments to the Public Transport Council Act, the PTC will have the powers to initiate and change the fares, including the fare structures, to be charged by the public transport operators. From 2009, the Land Transport Authority (LTA) will take over centralised planning of the bus network and services with the PTC retaining oversight. On both fronts, the PTC plays a very crucial role in the implementation of these changes as both of them are extremely sensitive and emotive exercises.

As can be seen from the recent fury of protests in the forum pages of newspapers and in the various blogs and podcasts such as the mrbrown show podcast which puts forward a humorous but biting take on transfers, and I quote, "fare game", those who end up inconvenienced will naturally be dis

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gruntled but those who end up better served will not thank anyone for it.

Sir, there is a need to redress this imbalance in the feedback that we receive. I understand it can be very difficult to speak out. When we attend a dinner, for example, and everyone around the table is complaining about how adversely affected they are, I am sure you will feel quite shy to say out loud that you are happy because you are benefiting. Somehow, it is popular to criticise and complain. Somehow, we do not want to be seen to take pleasure in the unhappiness of others or we simply do not want to attract undue sarcastic comments from those who are unhappy around us.

Some inconveniences and unhappiness would inevitably arise in some quarters when a change is implemented. Nevertheless, I would strongly encourage those who support or benefit from fare integration to come out and be more vocal about their views for the change. More importantly, I urge all commuters to look at the bigger and longer term picture.

The vision of the Land Transport Ministry is to ensure a quality urban living environment as the economy and population grow and to achieve this goal, the commuter is put squarely in the centre. The interest of the commuter is right at the heart of the Land Transport Masterplan. In other words, the intention of the present fare integration exercise is to give a better commuter experience as a whole. Ultimately, it is critical for the Government to have the political will to carry out measures which may not enjoy popular support in the short term but will result in the long-term benefit for commuters as a whole. In other words, short-term pain for some, long-term gain for the majority.

Currently, the public transport operators, SBS Transit and SMRT, operate

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within a fare structure that has been agreed and approved by the PTC. Any application for increase or change has to be submitted to the PTC for approval. But the PTC has no authority to proactively force an operator to change the fare that he charges and could only react when an application is submitted by the operator. Hence, it is only recently, after many years of persuasion and petitioning by the MPs and the public, that SBS Transit introduced the season pass that allows unlimited rides within a given period of time.

I sense that the operators were reluctant to offer season tickets as this was seen as less revenue compared to standard tickets for one-time travel. I, therefore, welcome the amendments to the PTC Act which give the PTC powers to initiate and change the fares, including the fare structure. I look forward to PTC introducing more types of travel passes and season tickets for unlimited travel on bus and rail. For example, in London, although the cash single-fare is prohibitively high, very few people actually pay that fare because there is an array of "oyster" fare, one and three-day passes, off-peak travel cards and season tickets to choose from. Not only does this give the commuter a capped-cost to better manage his budget for transport expenses, it will encourage him to take public transport more, because he has already paid for the season ticket. Such unlimited travel passes will revolutionalise the travel patterns of our population. Perhaps, in addition to the basic transport needs of getting to and from work, people will be able to go out more, to socialise more, to shop more and to dine more.

In line with our pro-family initiatives, I would also like to suggest to the PTC that family fares be introduced, allowing a family travelling together to pay less than the sum total of the individual standard fares. Families can enjoy more outings

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together, especially during off-peak weekends, knowing that their transport expenditure is capped.

Sir, having said the above, I do not think we can start celebrating that the PTC will now favour commuters without regard to the interests of the operators, because the PTC still has the challenging mission of balancing commuters' interest with the long-term viability of the transport operators. I would like to ask the Minister to clarify how this will work in practice. For example, if the PTC thinks that a certain type of season pass should be introduced, will the PTC then have to consult with the transport operators to take into consideration how much revenue operators will lose when commuters use this new season pass and try to compensate the operators with extra fare revenue by allowing an increase in fares from somewhere else?

One recent change which illustrates PTC's challenge is distance-based fare structure and the removal of transfer penalty. As transfers lubricate the wheel that comprises the hub-and-spoke transport system, it makes sense that for the hub-and-spoke model to function optimally, transfers should be the order of the day and not to be penalised. The distance-based fare structure will allow commuters to choose the preferred route to take to reach their destination. The revelation that the distance-based system will help cut transport costs for four in 10 commuters was welcomed. But the news that this loss of revenue will be passed on to direct fares thus would result in higher fares for the remaining six commuters who make direct trips has provoked public outcry.

I was perturbed that the public transport operators are allowed to recoup the loss of transfer penalty by raising fares on direct trips. I think we should

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first observe and monitor the impact on the collections of the PTOs following the introduction of the distance-based through fares and allow some time for the system to settle down before considering making any fare adjustments for direct trips. This will be more favourably received by commuters than imposing an immediate increase in fares for direct trips. With respect, the premise that the fares for direct trips be immediately increased to meet the costs of restructuring is untenable. This is because the exercise to integrate fares by introducing distance-based through fares is not a simple one. We are not talking about a straightforward equation of compensating for the loss of revenue in one area by increasing revenue by charging more money somewhere else. As the PTC is well aware, pricing of fares involves many factors and variables and it is not clear whether at the end of the day, the PTOs will lose any revenue or what the quantum of any loss of revenue would be. It may be well that the overall revenue may increase due to a rise in ridership as more travel options open for commuters with the introduction of distance-based through fares.

Sir, in theory, the hub-and-spoke system is an ideal model on which to base transport planning. It is cost-efficient, energy-efficient and has the capability to match and maybe surpass the journey-time offered by direct services, the only drawback being that commuters have to make more transfers. However, I am not convinced of the effectiveness of the hub-and-spoke system in our HDB estates where there is a heavy dependence on feeder services. In my constituency, Tampines, residents have complained to me that their children have been posted by MOE to schools in the neighbouring housing estate of Bedok. As the crow flies, Bedok may be the nearest town from Tampines. However, to get from their home in Tampines to their school in Bedok, the students have to take a feeder bus to the hub in Tampines, transfer to a

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trunk service or the MRT to Bedok hub before hopping on another feeder to go to school. On the other hand, if their home and their school are served by a couple of trunk services each, their choice of services and connections is multiplied as these services criss-cross each other along their routes.

The Minister for Transport has indicated that when LTA takes on the role of central bus planner, it will seek to make feeder services more direct and frequent. I hope LTA will conduct a fundamental review of the feeder bus system to improve the connectivity in our HDB estates. I am still not convinced why feeder bus services should ply in a loop around the hub. We speak of the hub-and-spoke system. The spokes of a wheel radiate from the hub. Therefore, is a two-directional bus service linking two hubs not better than a feeder service going one full circle in a loop? It will give commuters a choice of taking the service one way or the other way, to either one of the hubs. Such a service linking two hubs can collect and feed people living along the route to either hub.

Sir, with that, I support the Amendment Bill.

4.23 pm

Mr Seng Han Thong (Yio Chu Kang): Sir, I support the proposed Amendment Bill to confer a new function on PTC to drive integration of bus and RTS fares by means of introducing distance-based through fares.

Currently, our fare structure is not equitable and not consistent with our hub-and-spoke model as it is not fully integrated and does not support transfer. In fact, a commuter pays more to make a transfer journey with less travelling time compared to a direct journey that requires more travelling time.

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Take, for example, a commuter that travels from Yishun to Singapore Expo by MRT. He will incur a fare of $1.75 by ez-link card and the journey time is 58 minutes. However, if he wants to cut down travelling time to 50 minutes and makes a transfer by taking a bus and then a train, he will have to incur a higher fare of $2.30, even after transfer rebates.

In order for commuters to enjoy more efficient, more frequent services and shorter journey times, transfer penalty will have to be removed. Indirectly, this also means that transfer rebates will have to be increased.

Currently, the transfer rebate is 25 cents and is paid by the second leg operator. So, if a bus brings commuters to a train, the train will bear the transfer rebate, and vice versa.

Mr Speaker, Sir, I would like to seek clarifications from the Minister on the following three issues:

(i) Transfer rebates. How will PTC ensure that the rules of transfer rebates and revenue sharing are equitably introduced so as to balance the interests of commuters, operators and workers in the transport industry? If transfer rebate is high, commuters that make transfer journey will understandably be happy. However, it may not be so for operators as it may affect their financial viability. For workers in the transport industry, they could be worried too as the operators’ revenue may be affected. Like any other ordinary Singaporean workers, they too look forward to annual wage and bonus increases. On the other hand, will commuters on direct journey be made to pay a higher fare as a result of this structural change?

(ii) Fares for Distance. Currently, PTC has a formula to determine the appropriate annual fare increase after submission by the operators. As the

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current fares are set by the operators based on fare stages, which is also distance-based, what will be the roles of the operators and PTC in determining and setting the fare for a particular distance with the empowerment to PTC to introduce distance-based through fares? As the Minister mentioned just now, with the amendment, PTC is required to consult the relevant parties. Who are the relevant parties that PTC needs to consult?

(iii) Transfer and Direct Journey. Does MOT have the information on the number of commuters who make transfers and what were their patterns? Is it bus-bus between the same operator, or bus-train between different operators or bus-train-bus? This will be useful in determining how the structural change in the fare system will affect the commuters and their travelling patterns.

4.27 pm

Mr Siew Kum Hong: Mr Speaker, Sir, I rise in support of the Bill.

The amendments contained in the Bill will put in place the necessary framework to allow the Public Transport Council to implement distance-based through fares, which is, in my view, a fair basis for determining public transport fares. So I only have two points to make in relation to the Bill.

Clause 3 of the Bill amends section 23 of the Act, in particular clause 3(b) amends section 23(2) such that PTC may, in certain circumstances, prohibit persons from charging fares lower than those approved by the PTC. This is a change from the current situation where persons are freely permitted to charge fares lower than those approved by the PTC. This seems counter-intuitive. After all, if an operator is able and willing to reduce its

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fares, why should the PTC stop it from doing so? I would think that lower transport fares are a good thing, especially in these times of high inflation. I therefore hope that the Minister can clarify the situation in which the PTC will proscribe persons from charging lower fares than what have been approved and what measures will be put in place to ensure that the PTC will do so only in these situations.

Secondly, Sir, the new section 24AB creates a mechanism for the PTC to consult with licensed bus service operators and licensed Rapid Transit System operators. But this excludes the public. I hope the Minister can clarify why only the operators and not the public who, after all, are the persons who will be paying these fares, will be consulted. Indeed, a recurring complaint from the public is that the PTC does not pay sufficient heed to the concerns of the commuters themselves, considering that it is the commuters who will be using the system and paying the fares. I think there is room for the Act to be amended to allow for greater public consultation.

Sir, with that, I support the Bill.

4.29 pm

Mdm Cynthia Phua (Aljunied): Mr Speaker, Sir, I rise in support of the Public Transport Council (Amendment) Bill, as it is indeed very timely with the increasing call of the public to switch to public transport.

With the population projected to increase in the years ahead, we must be conscious in our approach in urban planning and ensure that what we implement must be far-sighted so that we do not leave our future generation with problems that are insurmountable. Central to our style of urban living is the public transportation system.

Our economy, our

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entire society, revolves around it – a fact highlighted by the more than five million trips that are made on it every day. Yet this is overlooked, sometimes taken for granted even. Demands from its users for its absolute perfection, in terms of cost and efficiency, are continually heard. Such expectations are healthy, as it stimulates constant improvement – an element which is very necessary when we look at the demands on our transport system.

With the proposed amendments, I hope we can have before long a more equitable fare system so that commuters would not be penalised by the fare structure for the many criss-crossing they have to make daily from one transport service to another. I have a few concerns and suggestions to make on the integration of fares and the PTC.

Firstly, I would like to urge the Ministry to hasten the integration of fares. Do not take another six months of review like the issue on safety belts. If necessary, implement in phases and roll out the new plans so that the benefits could expeditiously benefit the commuters without further delay as they are long overdue. As with motoring, speed of travel is the equation to efficiency. I am glad that the Ministry has recognised time as the key measure for transport efficiency. Hence, the distance-based fares to allow the commuters to switch from one mode of transport to another depending on the availability of services, and the key is the availability of bus and rail services and the timeliness of these services is critical for an integrated public transport system.

With an integrated public transport system, then only can the PTC ensure that there is maximum value for the commuters through distance-based fares. So the PTC should not only look at the distance-based fares but also look at the availability of the rail and bus services at

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the same time and also the timeliness of the arrival of these services. So this key change is welcome as it would mean lower costs for commuters and a shorter travelling time.

However, for single long distance-based commuters, I hope the Ministry would consider lowering the fixed cost fare for the first journey since the other component, the distance-based fare, would take into account most of the cost of travelling.

With PTC taking on the additional responsibilities to initiate and impose changes on the transport fare structure and the apportionment of fare revenue, I would like to call on the PTC to review the fare structures for our senior citizens and students of tertiary institutions in view of the gloomy economic situation ahead. I make this call against the backdrop of the call for our senior citizens to work beyond 62 and to lead active lifestyles. In addition, with many young adults aspiring to have a tertiary education and the latest statistics show that 59% of our annual batch of students are pursuing tertiary education, we should look into how to help this group of students as they need to travel more frequently and are active.

To summarise, the Ministry, together with the PTC, should look closely at the route planning and distance-based fare structure to ensure that our commuters, especially the senior citizens and tertiary students, with their limited income, can enjoy the maximum value for the fare that they pay travelling on public transport. This is something that is long overdue as the present benefits extended are limited, in terms of time of travel and the number of trips.

The introduction of the Through Card for all public transport mode is very much overdue as well. With MOT taking over the role of central route planning and the

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PTC tasked to initiate the fare structure, it is timely to introduce the Through Card for all public transport modes. This would enhance the maximum value, offer convenience for our frequent travellers.

With limited land and physical capacity, to ensure that we continue to have an efficient public transport system is to employ technology in route planning and fare structure. With advancement in computer technology, I am sure we can tap on the ability of computer programming to chart an efficient distance-based network for commuters. If motorists can use GPS to plan their routes, I am sure the public transport operators too should do better to ride on technology to deliver their services with greater efficiency to their customers. We should also look at how other countries apply technology to the best advantage. And I urge PTC to look into setting up a Research and Development function so that we can build up our own technology as we move towards the future. The employment of technology should not only be in the functions of PTC but also in the communication with commuters in real time. Let me give you an example. I understand that one department in the Infocomm Development Authority (IDA) is developing a software by taking into account the existing public transport route information to direct a commuter from one place to another. They are able to recommend the lowest cost route or the fastest route based on cost and times as parameters which include the buses and rail. Such R&D would benefit the public.

Although the impetus of tapping on technological advancement is critical, we must always adopt an open system and not allow any system to be the monopoly. These criteria should be a system that allows and promotes integration and wider usage. Use the ez-link card as an example. I look forward to the day when

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we can do away with the current system of having to pay $1 deposit for the ez-link card and to get a refund when you return the card.

Currently, PTC comprises a panel of members who are mostly professionals. This is good because, by their training and understanding of how to manage issues and find solutions, they are well-equipped to handle their responsibilities. However, I would like to suggest that the Minister consider enlarging the Council or set up more and specific ad hoc committees, comprising more of the ordinary man-in-the-street, the working class or the "broad masses", if I may borrow the phrase. For example, if the central bus route planning and fare structure are for the area, say, Aljunied GRC, then more residents of Aljunied GRC could be called upon to assist and contribute. This ad hoc committee will serve as a reference to give feedback on the day-to-day goings-on at the bus stops, the train stations and the taxi stands. They will also be able to share with the PTC on the impact of fares on their expenses and how they have been coping. With all due respect to the members of the PTC, many of whom may be car owners, the frequency and the time they spend on public transport will not be sufficient to give them an appreciation of the headaches, the heartaches and the frustrations confronting the commuters who day in and day out have to muscle and jostle with everyone, not just once a week, but every day, five days a week.

Moreover, the members of this committee can serve as "ambassadors" for PTC, giving it more transparency and support for the public.

The criteria for members to qualify for appointment to this ad hoc committee should be based on their income level and non-car ownership. Also, members of this ad hoc committee will serve for only one term so that we can give as many people

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as possible an opportunity to serve on the committee.

I know PTC members do get feedback but, in getting public feedback, often it is those who are vocal that will speak out and we may not get the true picture of others who have a different viewpoint to share.

In addition, the timeliness of service of our buses is still far from ideal. Presently, PTC only measures the timeliness of the buses at the starting time of the service. However, with the extension of dedicated bus routes, PTC should look into the promptness of this service at the midpoint of each bus service journey. This would ensure that the waiting time for our buses could be reduced and hence overcrowding during peak periods.

At the end of the day, I am confident that, with PTC's guiding hand, the quality of our public transportation system might one day parallel or even surpass that of its counterparts in Tokyo, Japan. We are already on track to build our own comprehensive transport system, what with our current 109 km of MRT lines, more than 3,000 buses and the upcoming Circle and Downturn Lines that are still in development.

I have no doubt that the PTC will build on these achievements and continue to advance the standard of our public transportation system beyond our most optimistic expectations for the benefit of all our citizens. Approving these amendments will give it a leg up, but it is only the beginning.

4.40 pm

Mr Lim Biow Chuan (Marine Parade): Mr Speaker, Sir, thank you for allowing me to speak on this Amendment Bill. I rise in support of the Bill.

Earlier this year, LTA released its Master Plan where the Government stated

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that one of its objectives is to make public transport the choice mode, and this will in turn lead to making Singapore a liveable city. Sir, I support the LTA Masterplan as well as the plans to make public transport a choice mode in view of the fact that there are increasing demands on our roads.

As the Minister has stated, our transport system is based on a hub-and-spoke model. This means that there are less direct services for the commuters. Instead, the commuter has to usually take a bus from his original starting point to the hub where he then changes to a train or to another bus to go to work or to another location. And as the hon. Member for Tampines GRC, Mr Ong Kian Min, has said, sometimes, they have to change from bus to a train to another train and then to another bus, and this is only one way. It will be the same for the reverse way where they have to change to a bus, to a train, to a train and back to a bus.

Sir, if you ask many residents, they would prefer to have a direct transport service from their home to their workplace as this would save them waiting time and also save them on transport costs.

However, I accept that the hub-and-spoke model is more efficient as it is very difficult to be able to have direct transport services from your home to the market, or to your office or to the Orchard Road shopping area. However, the hub-and-spoke model inconveniences the commuters as they have to spend additional time waiting for their bus and then for their next train or for another bus. In addition, under the current fare system, even though a fare rebate is given, the commuter still has to bear the cost of the inconvenience as he has to pay more than one base fare, as he changes his bus or train to bring him to the next destination. Sir, this is unfair to the commuter as he spends more time on

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commuting as well as waiting and then he has to pay more whenever he changes the mode of transport.

As such, I support the PTC (Amendment) Bill as it seeks to allow the Public Transport Council to initiate and change the fares and fare structure and to allow the PTC not only to set the fares but also to re-allocate the revenue amongst the transport operators. The Government's aim of amending the fare structure such that the commuter is not penalised by having to pay more than one base fare is, to me, a step in the right direction.

Currently, there is some concern that after the Act is amended and a distance-based fare is implemented, the commuters would have to share the loss in revenue with the public transport operators (PTOs). It has been estimated that six in 10 commuters may end up having to pay more. Sir, I would urge the Public Transport Council to ensure that this loss of revenue is not passed on to the commuters but instead absorbed by the transport operators. The current public sentiment is that the public transport operators have made sufficient profit from their transport operations. As such, they should consider their public and moral obligation to their customers to maintain fares at an affordable rate and to provide value to their customers. Further, the Public Transport Council Act only requires the Council to consider the need for the public transport operators to remain financially viable and not to continue making a profit.

Sir, there are a few queries on the Bill which I wish to seek clarification from the Minister:

(1) Under what circumstances would the Public Transport Council consider suspending approval for fares which had

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been previously approved? In such a situation where the fares had been suspended, what would happen to the services which had been approved? Is it the intention of the Public Transport Council that the fares are suspended but the services continue to operate, ie, the commuter travels for free? Otherwise, if the fares are suspended and the transport services are correspondingly suspended, then the powers of suspension are really not effective at all.

(2) In respect of section 24(8), would it be more relevant for the Public Transport Council to consider an applicant's conviction for an offence "under the Act" rather than for any "criminal offence"?

(3) When the Public Transport Council carries out a review under section 24AA, would the Public Transport Council have to consider only the consideration stated in section 24AA(2) which is that "the decision is in the interest of the public and would to any extent promote or facilitate the objectives referred to in subsection (1)(a) or (b) or both", or would the PTC have to consider the first limb of section 24(2) which is to consider the financial viability of the applicant who is the public transport operator?

Sir, is there any provision for any public transport operator to make an appeal against the decision of the Public Transport Council if they are not satisfied with the decision made under section 24AA(2) even after they have been consulted? Would there be a corresponding amendment to section 22I of the Public Transport Council Act to allow an appeal to the Minister whose decision would then be final?

Sir, the Minister's clarification would assist the Public Transport Council greatly in making their decision as the Council is an independent body, with council members who are not part of the

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Government and who are mostly volunteers.

Finally, Sir, I wish to urge the Government to make more efforts to explain why is there a need to ensure that public transport operators remain financially viable. Many people simply do not understand the rationale for the Government to have a law to protect the profitability of listed commercial companies.

Sir, with that, I support the Bill.

4.46 pm

Mdm Ho Geok Choo: Mr Speaker, Sir, I rise in support of this Bill.

Sir, I note that this Bill is about empowering the PTC and indeed it is a very good idea to protect our public transport users against unjustifiable fare increases. However, I am concerned about the avenues through which the transport operators could seek redress should they feel that their proposals for fare increases have not been considered thoroughly.

The proposed clause 4 empowers the PTC to enforce compliance with certain conditions. My concern is that there seems to be no avenue for the public transport operators to appeal if they should feel that approval for fare changes was withheld unfairly or revoked unfairly. Currently, an appeal to the Minister is available under section 22(1), but only for certain decisions made by the PTC as listed in section 22(1).

Could the Minister clarify if the decision to limit appeals to the Minister is deliberate? If so, what can public transport operators do if they are dissatisfied with a decision handed down by the PTC? It should not be that operators have to take the PTC to court over such decisions because the cost of

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doing so could result in unnecessary expenditures for both the PTC and the operators. Alternatively, if costs are passed on, law suits could result in increased cost for commuters.

The above scenarios would not benefit commuters in the long term. Also, the proposed section 24(7) seems slanted in favour of the PTC because the PTC is empowered to decide if sufficient cost is shown by the operator threatened with a sanction when in the first place the PTC was the body intending to issue the sanction. While it seems to me that this section was aimed at giving the operators a chance to explain their apparently errant behaviour before the PTC imposes a sanction and to do so efficiently, I wonder if there could be a slightly fairer way of doing so, for instance, by asking a third-party to decide if sufficient cause is shown.

Clause 5 of the Bill empowers the PTC to initiate reviews and fair changes to the fare structures. It is good that the PTC can take the lead in ensuring fares are fair for all parties. However, it sounds rather draconian to allow the PTC to impose new conditions, especially those suggested in the Explanatory Statement that public transport operators may be required to enter into agreements with each other on terms specified by the PTC regarding the re-allocation of revenue on public transport operators before fare changes are approved. This is especially so in light of the proposed section 24AB where the PTC only has to consult and give notice to affected public transport operators before they impose decisions made under the new power to initiate fare reviews. While I have every belief that the PTC will arrive at its decision fairly, there is no requirement that the PTC has to accept the views of the public transport operators. Therefore, if the public transport operators feel aggrieved by the decision, what recourse will they have?

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This Amendment Bill is timely, especially in light of public sentiments that fares have only been going up and never down, despite temporary declines in oil prices. Perhaps, more transparency in the review process and public disclosures of review reports would help the public better understand how fares are decided upon.

Sir, on this note, I support the Bill.

4.50 pm

Mr Raymond Lim Siang Keat: Mr Speaker, Sir, I thank Members for their comments and strong support for the Bill.

Let me just take the House through some of the key issues that Members have raised in the course of this debate.

Mr Cedric Foo brought up an important point. He said that, right now, four in 10 commuters benefit because they make transfers daily. But he argued that the potential benefit should be wider. And he is right, it is much wider. The four in 10 ratio understates the benefits to the commuters because it is looking at whether or not the commuter takes the transfer daily. But the commuter might not take it every day. He might take it two or three times a week. So Mr Foo is right and it is an important point to stress that the benefits of this distance-based through fare that we are putting through today are much wider than four in 10 commuters.

In fact, in terms of potential benefit, it is even wider. Travel patterns change. If we take a commuter today who does not make any transfer at all, he might change his place of work and his home, and that might involve transfer journeys in the future. Even if he does not change his place of work or his home, he now has the option of choosing what is the optimal

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service combination to get to his destination. As Members have said, this might be a shorter waiting time and a faster journey, without having to pay a transfer penalty.

The other item that has been brought up is this issue that as we move towards distance-based through fares, how do we allocate the adjustment costs? As a matter of principle, both the public transport operators (PTOs) and the commuters benefit and therefore they should each bear some of the adjustment costs. The commuters benefit because they now have a fairer fare structure and greater choices. The PTOs benefit, as Mr Ong Kian Min correctly pointed out, as they should see higher ridership in the long term. Both benefit, so as a matter of principle, both should bear some of the costs. What the PTC will be doing is to look into the details of this and see how these adjustment costs should be borne between the public transport operators and the commuters.

It is worth emphasising what PTC Chairman, Mr Gerald Ee, said that for this year's fare revision and fare restructuring exercises which are both taking place at the same time, even though the maximum fare cap this year is 3%, his Council will endeavour to ensure that the net fare adjustment will be below 1%. This is actually lower than last year's fare cap, which was 1.8%. He further said that he would also, when looking at the details of this fare revision and fare restructuring, ensure that the majority of commuters benefit, that they will pay less than 3%. This will turn on the transfer rebate the Council will give, how this will be allocated between the PTOs and the commuters, what sort of fare increase and how is that spread across the fare stages. I would like to assure the House that he understands the current difficult economic conditions and that his Council will endeavour to make sure that the majority of commuters benefit.

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Mr Cedric Foo also pointed out that under the current system, what is happening is that commuters who are taking direct trips are effectively being cross-subsidised by those taking transfer journeys, and he is right. I think Mr Ong Kian Min alluded to it in his speech when he said that we are actually trying to correct an existing inequity in the system. He said quite rightly that it is the majority of people who will benefit and that those who benefit should actually speak up. I fully support him in this.

Another issue that was brought up by Members is enhancing the existing hub-and-spoke system. To put matters in perspective, we have a good public transport system. We conduct surveys every year. In the last two years, 2006 and 2007, eight in 10 commuters who took public transport said that, overall, they were satisfied with it. Yes, certainly, there are areas for improvement. Members have mentioned, for example, waiting time and travel time. All these can be improved, and both the LTA and the PTC are looking into these pain points in our system.

Mr Foo asked what else are we doing to enhance the hub-and-spoke system. As Members would know, we are doubling the rail network within a span of 12 years. We will spend close to $40 billion. Every other year, there will either be a new rail extension or stage of rail line opening. For example, next year, we are going to have the Circle Line opening up in the north-east sector.

We are also having more integrated public transport facilities. We have also introduced integrated public transport travel information, a point which Mdm Cynthia Phua brought up, that is we are using technology to provide travel information to commuters. We will see what more we can do.

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And, of course, we are looking into central bus planning, which a few Members mentioned. LTA will be the central public transport planner. They are already doing that now for the rail system. They will take on board from 2009 onwards the bus side, so that they can look at the system as a whole, how best to optimise the network from the commuters' viewpoint.

Mr Siew Kum Hong made two points. First, he asked whether under the amendments to the Act we are changing the current position, which is that a public transport operator can charge a lower fare. The answer is no. It is up to the public transport operators. They can offer discounts, whatever package they want, and to offer a lower fare than that which is approved by the PTC.

What are the principal circumstances in which they are not allowed to do that? It is in the premium bus sector. In the premium bus sector, there is a price floor. This is to ensure that the premium bus operators do not cannibalise the basic bus services because they run only during the peak hours. So, if we allow them to price-compete with the basic bus operators, the basic bus operators would be under stress. The basic bus operators, when they run a service, they have to run it for at least 18 hours a day, whereas in the case of the premium bus operator, they only run it during the peak periods. For the premium bus services, they are not allowed to price-compete, they compete on quality.

Mr Siew also brought up, in terms of representation to the PTC, that there should be commuter input. This is actually part and parcel of the PTC as embodied in the composition of its members. Community leaders are members of the PTC. It takes in people from all walks of life. We wanted to ensure that it is representative. So I would like to assure

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Mr Siew that that has actually been taken into account and is part and parcel of PTC as an institution.

On the matter of community engagement which Mdm Cynthia Phua brought up, as Members know, right now, we have set up a division called the Land Transport Community Partnership Division precisely for the reasons that the Member has said, ie, it is important that our land transport planners and decision makers have a feel of the issues on the ground. So, every constituency now has a Land Transport Authority officer sitting in their Citizens' Consultative Committee taking in the feedback. If there is more that can be done, whether small groups should be formed like Mdm Cynthia Phua suggested, this is something that we can study. But the principle is there, that we want to engage and hear what the difficulties are on the ground and see how best some of these difficulties can be resolved.

There are also some clarifications which Members – Mr Lim Biow Chuan and Mdm Ho Geok Choo – sought on amendments to certain specific clauses. Mr Lim Biow Chuan asked about the suspension of the approved fares.

The whole idea, when we amended the Act, was to give the PTC a range of sanctions that they can use. So it can be a censure, it can be a fine, it can be a suspension which is really a temporary revocation for not longer than six months, or it can revoke the approved fares completely. And when it does that, like Mr Cedric Foo mentioned, it is a draconian measure.

So when will we use this? It has to be very grave and repeated breaches, because if you revoke the approved fares, there are serious financial consequences on the public transport operators as they will still be running the service. It does not mean that when you revoke the fares,

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they stop running the service, which is the point Mr Lim Biow Chuan brought up.

So the idea was to give the PTC a range of sanctions and they can then calibrate how best to meet particular circumstances, including the $100,000 fine that Mr Cedric Foo brought up. It is a part of the range of measures. Next, Mr Lim Biow Chuan pointed out that section 24(8), which refers to any criminal offence, should really be for an offence under the Act. He is right because if you read section 24(8), it refers back to section 24(4) and that makes it clear that the offence in question is an offence under the Act.

Mr Lim also brought up the point about section 24AA on the review of fares and whether or not financial viability would be one of the considerations when the PTC deliberates on this matter. The answer is yes. Section 24AA says that the PTC must take into account the interest of the public, and the interest of the public is wide enough to cover the financial viability of the public transport operators.

Mdm Ho Geok Choo and Mr Lim Biow Chuan asked about the recourse if PTOs are unhappy with the PTC's decision. The PTC plays many roles. But in the case of the fare review, it is really taking on the position of an arbiter and so it is not really a case of the relation between the PTC and the public transport operators. The Council is trying to balance the interest of the public transport operators and the interest of the commuters. We deliberated and decided that we should have an independent body, comprising people from all walks of life, that looks into this matter and that was why the PTC was set up in 1987. They will be the final decision maker when it comes to matters relating to fares. That is the reason why the PTOs cannot appeal beyond the PTC to the Minister.

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In terms of consultation, the process is therefore built into the system. Before the Council makes deliberations, whether it be on distance-based through fares or on the annual fare review, it invites submissions, it hears out the PTOs, and then makes a decision. So there is due process.

Some Members mentioned about season passes. The LTA is working on it. It is also working on central bus planning, such as more direct routes. These are matters which PTC and LTA will look into, but what is important is that when it looks into this, one of the key things that they have to take note of is to ensure that whatever that has been developed, proposed and launched is commercially viable. I think Mr Ong Kian Min made that point. He said that the challenge is to ensure that when we do all these things to try to benefit the commuters, it is also important, at the same time, to ensure that, if you are launching a travel pass, or you are working out a particular bus route, at the end of the day, you do not compromise the financial viability of the system as a whole. In fact, this goes to Mr Lim Biow Chuan's last point where he said that some people are confused and they think we set up the PTC to protect the PTOs, which is not the case. As I have said, the PTC was set up to find a balance between the commuters' interest – to ensure that they have an affordable high quality public transport system – and the financial viability of the PTOs. The financial viability of the PTOs is important because if the PTOs are financially not viable, your public transport service will deteriorate over time and that is against the commuters' interest, and that is why the PTC has to do this balancing act.

Mr Speaker, Sir, I think I have answered most of the key issues that were raised.

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Mr Cedric Foo Chee Keng: Mr Speaker, Sir, thank you for the opportunity to seek some clarification from the Minister. I fully understand and support the Minister's view that public transport operators must be financially viable. Otherwise, they will not invest in replacement capital and our quality of transport will deteriorate. Can I ask and clarify with the Minister what does he think is the right level of financial return for public transport operators in Singapore?

Mr Raymond Lim Siang Keat: The PTC deliberates on this matter and it looks at the PTOs' ROTA (Return on Total Assets). This matter actually has been debated in Parliament and the Government has accepted that we will use ROTA as an indicator on the financial health of the PTOs. In deciding what is the right ROTA figure, there is no magic number, because it changes over time and circumstances might be different, so we normally look at the benchmark – what are comparable PTOs and industries, whether in Singapore or overseas, how they are doing – before making a decision on this.

Mr Cedric Foo Chee Keng: Sir, I would like to urge the Ministry, when considering how to apportion the drop in revenue as a result of removing the transfer penalty, not just to look at the marginal change but to look at the overall net effect on the financial return of the public transport operators. As our parliamentary colleague, Mr Ong Kian Min mentioned, it is a dynamic situation and, as we remove the transfer penalty, there would be a resultant increase in ridership and so forth that would also benefit the transport operators. So it is not a static situation and it is also not just a case of apportionment based on marginal change but what is the overall net effect on the transport operators' returns. I think that would be a more relevant point to look at.

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Mr Cedric Foo Chee Keng: 5.09 pm

Mr Raymond Lim Siang Keat: This is exactly what the PTC would have to do in this year's exercise. That is why I said they have to look into two things. One is the fact that, with distance-based through fares, commuters will benefit, and the other is that the PTOs would also benefit. I think one point that is worth emphasising is that, however we cut it, the immediate impact on the PTOs is a loss of revenue. So when you cut it and say that this is the amount that the PTOs will have to take, it is forgone revenue for the PTOs as they are effectively transferring this to the commuters who would not pay this amount anymore.

In the case of commuters, if they were to take some of the adjustments, they are not taking on an extra burden, it is really a redistribution exercise. This is the amount being paid out in transfer rebate and we are spreading it between those who take direct trips and those who take transfer trips. So as long as the PTOs take part of the burden of adjustment, overall at the net level, commuters are ahead. But what should that number be, that is his question. Should it be more or less? Should it be 50-50? Should it be more than 50-50? This is something that the PTC will have to deliberate and make a decision for this year's fare review.

Mr Seng Han Thong: Mr Deputy Speaker, Sir, the Minister has not answered my two clarifications on the transfer rebate. I said that if a transfer rebate is too high, it will jeopardise the viability of the PTOs and that will affect the welfare of the public transport workers. How do we ensure that?

Secondly, does MOT have the pattern of the transfers made: (a) bus-bus between the same company; (b) bus-train

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between different companies; and (c) bus-train-bus between different companies. That will really be useful in determining how the fare structure change will affect the commuters, the travelling public and also the public transport workers.

Mr Raymond Lim Siang Keat: My apologies to Mr Seng. The second question first. As I mentioned just now, the PTC is looking into this data right now - all these transfers that are taking place - and seeing how best to do this year's exercise where the majority of the commuters will benefit. So that is being done. What we know is that four out of 10 commuters take transfers every day but, as I said earlier, this understates the benefit because a person might take a transfer every other day and it is not captured in the four in 10 data.

The other point about transfer rebate, that is exactly what the PTC has to do. They have to see what level to raise the transfer rebate this year because it does have an impact on the PTOs' finances, and they have to make sure that they do it in such a way that the PTOs continue to be viable in the long term. As Mr Cedric Foo mentioned, the PTOs need these earnings to come in because companies need to invest, renew their fleet and upgrade. So this is a challenge, like Mr Ong Kian Min said, that the PTC will have to do, and they have to balance these two things.

Mdm Cynthia Phua: Mr Deputy Speaker, Sir, although the Minister has mentioned that the viability of the transport operators is important, I would like the Minister to comment and to consider again the concession fares for our senior citizens and tertiary students as well.

Mr Raymond Lim Siang Keat: The Minister does not consider these things. The Public Transport Council considers these things and the Public Transport

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Council looks into these matters every year. The Member is talking about student/child concession, which has actually not been changed for many years, and also the concession for senior citizens, polytechnic and tertiary students. But one thing that the Council will always have to bear in mind when they review these is that, every time they lower fares for one group of commuters, another group of commuters will have to take a higher burden. This is something that they will have to consider.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mr Raymond Lim Siang Keat].

Bill considered in Committee; reported without amendment; read a Third time and passed.