Will nationalising our public transport operators keep fares affordable?

Having a nationalised public transport system does not necessarily mean more affordable fares. For example, an independent study by NTU showed that public transport fares in Singapore are more affordable than cities such as London, New York and Tokyo, which have nationalised parts of their public transport systems.

In fact, Singapore's public transport fares have become more affordable over the past few years. As a share of household spending, both the average household and lower-income households have been spending significantly less on public transport fares – 1.7% and 2.5% in 2018, down from 2.7% and 4.1% in 2008, respectively.

No model is perfect, and each has its pros and cons. Few jurisdictions have fully nationalised their systems. In the absence of market competition under a nationalised model, there would be little discipline to push for cost and operational efficiencies. On the other hand, Hong Kong’s MTR, which is generally considered to be a reliable and relatively affordable system, is privately run.

Instead of being at the extreme ends of the spectrum, it is important for Singapore to choose a spot in this spectrum that best suits our needs and circumstances. Currently, we take a hybrid approach, where we combine the responsiveness of a nationalised system (with Government deciding on bus services, rail lines and operating standards) and the efficiencies of the private sector (with private companies operating buses and trains).

The Government will continue to monitor and calibrate this balance, keeping in mind our objective of providing a high quality public transport service to Singaporeans that is safe, convenient, and financially sustainable in the long run.