NO REDUCTION OF BUS FARES (Reasons)

Mr Liew Kok Pun asked the Acting Minister for Communications why bus fares cannot be lowered even though (i) the price of diesel has dropped; (ii) manpower costs have also gone down because of the use of the more efficient OMO system; and (iii) the prices of vehicles and their accessories are lower owing to the strength of the Singapore dollar.

Dr Yeo Ning Hong: There has been no increase in bus fares for the past 2 1/2 years. However, over the same period the average wage in SBS has increased by about 32%. As wages account for half of SBS operating costs, the effect of higher wages is acutely felt in SBS. In 1982, even though there was a nett decrease of 806 in manpower, the wage cost went up by $13.4 m.

Fortunately, the price of diesel remained relatively stable for more than 2 years and has fallen slightly since the middle of this year. The strengthening of the Singapore dollar has also kept the price of spare-parts from rising with overseas inflation.

At the same time, determined efforts by SBS to cut costs and improve productivity has led to more cost savings primarily through more extensive use of OMO services. 45% of SBS buses are now rostered on OMO services, up from 35% at the beginning of this year. Savings have also been achieved through computerisation and mechanisation.

These efforts have enabled the SBS to hold its fares for the past 2 1/2 years in spite of increased labour cost. By increasing its productivity further, SBS hopes that future fare increases can be kept to the minimum.