Debated in Parliament on 24 Feb 2021.
Mr Ang Wei Neng asked the Minister for Transport (a) whether LTA has plans for a major revamp of bus routes following the staged opening of Thomson-East Coast Line; (b) what is the number of current bus routes with fare revenue (i) exceeding operating cost and (ii) falling behind operating cost; and (c) of these, which are trunk and feeder services respectively in 2019 and 2020.
Mr Speaker, Sir, the Government is expanding the rail network from 230 kilometres to 360 kilometres in the early 2030s, with the progressive opening of new stations and Mass Rapid Transit (MRT) lines. When the expansion is completed, our MRT network coverage will be comparable to major cities like New York and London. Eight in 10 households will be within a 10-minute walk of a train station.
Past experience shows that the opening of new rail lines would lead to significant falls in ridership of parallel bus services. If we keep the services as they are, it will mean more operating subsidies and greater use of public funds.
In 2019, we have a total of 356 bus services. Only 11 services could generate fare revenue that covered operating costs. The other 345 could not generate enough fare revenues to cover operating costs. The difference was made up by Government subsidies amounting to about $1 billion.
In 2020, with public transport ridership falling due to COVID-19, only two feeder services were able to generate revenues to cover their operating costs.
Sir, to maintain financial prudence and meet new demand for bus services, the Land Transport Authority (LTA) needs to continually review bus routes and implement changes to those with low ridership. These are often tough decisions with difficult trade-offs on what we choose to spend on at the national, and also at the local levels and after careful consideration of the impact on different groups of commuters.
We seek the understanding and support of Singaporeans to make such adjustments from time to time, in order to optimise our limited resources to benefit as many commuters as possible.
Mr Ang Wei Neng.
Thank you, Mr Speaker, for your indulgence and to the Senior Minister of State for the comprehensive reply. I would like to declare interests as I am part of the management team of ComfortDelGro, which also runs both train and bus services. I have two supplementary questions.
Firstly, we know from the Senior Minister of State that the current subsidies for the buses is about $1 billion a year. And the Public Transport Council (PTC) surveys have shown that Singaporeans' satisfaction with the bus service has improved over the years. Ten years ago, there were subsidies for train services, but they were virtually no subsidies for bus services and yet the two public bus companies at the time were still making slight profit. Ten years on, what has changed? I would like to ask the Senior Minister of State what has changed that cost the subsidy to balloon to $1 billion? Is it just more bus services on the road and more buses on the road?
Secondly, I would like to ask whether the bus subsidies will increase further when LTA rolls out more bus services to serve the new HDB estates such as Bidadari and Tengah?
Speaker, Sir, I would like to thank Mr Ang for highlighting the importance of ensuring financial prudence. As Mr Ang mentioned, we now spend $1 billion a year in terms of Government subsidies for bus services and another $1 billion a year on train services.
Mr Ang asked why is this $1 billion spent or what is it spent on in terms of bus services? It covers different aspects. But basically, when you roll out new bus services and that bus service cannot quite cover operating costs – that means the revenue and the fares that are being collected are not enough to cover operating costs and there is a deficit. And to cover the deficit, we are using the subsidies to pay the operators to run these otherwise non-commercial, sorry, uncommercial, in terms of viability, these bus services would not normally be run. But we understand why these bus services are required. Sometimes, it is to serve certain areas where we still need to provide the connectivity, but the ridership is low. Sometimes, it is because there are new housing estates, new residents and we do need to provide new services to connect them to key transport nodes like MRT stations and bus interchanges.
However, in the process of doing so, we cannot keep on increasing the total sum of subsidies. Because if we do that, the fiscal burden for this generation and future generations of Singaporeans will increase. So, our approach is as far as possible, we want to be able to meet new demand, cater to new groups of commuters, new services, by re-adjusting some of the existing services that have low ridership. And as I mentioned earlier in my main reply, an example of these services will include those that run parallel to the train lines.
In fact, one of the concepts that I think we need to get people used to, is that what we want is to provide adequate transport connectivity via public transport through a combination of bus and MRT. This means that we want to ensure that residents have adequate connectivity between their homes and the train station with buses increasingly focusing on the first and last mile connectivity, to complement the expanding MRT network that will provide the connectivity for longer travel distances.
Assoc Prof Jamus Lim.
I thank the Senior Minister of State for his detailed response to the thinking behind bus service provision for LTA. If I may just make a request, I wonder if LTA will consider implementing surveys to consider continuing to ply certain popular routes at a reduced frequency, perhaps during off-peak hours, and even if at a loss? And especially if these routes prove popular with the elderly, who tend to prefer bus services as opposed to MRTs.
Sir, LTA has been conducting surveys to get a sense of the demand from commuters and especially when there are new housing developments, we do look at how do we provide the connectivity for residents.
I would like to highlight one point that I think Assoc Prof Jamus Lim mentioned. And that is, he said that even if the bus services were to lose money, will we still be willing to provide? Actually, we have been doing so for the large majority of bus services. As I mentioned in my main reply, only two feeder services are able to generate enough revenue to cover operating costs in 2020. For the rest of the services, we are covering through Government subsidies from the $1 billion pool of total public funds that I mentioned.
If you are talking about new services, we want to have more new services, it is not that we cannot do it but we have to assess this carefully, because resources are finite and we need to ensure financial prudence. So, if we spend on one, we will have less resources to spend on another. That is the trade-off. If we are going to cater to new demand and yet, we do not wish to take away or adjust existing bus routes, then you can work out the sums. Mathematically, I think it will be clear to everybody that the total amount of public subsidies would have to go up. The concern with doing that is over time, it becomes financially unsustainable and we are increasing the fiscal burden for this generation and the next generation.
Therefore, the Government has to strike a balance between a few important considerations: quality of service, fare affordability for commuters and financial sustainability of our public transport system. These are all important objectives and ideally, we want to be able to do all of them. But we know there are practical trade-offs. So, therefore, we need to continually review how we can optimise the use of our scarce resources.
PAPERCUTS