Will nationalising our public transport operators keep fares affordable?

Having a nationalised public transport system does not necessarily mean more affordable fares. A comparison of fares across cities by the Public Transport Council indicated that public transport fares in Singapore are are comparable or lower than cities such as London, Paris, Seoul, and Sydney which have nationalised parts of their public transport systems. This is especially so for journeys involving transfers between different buses or trains, as unlike many cities, Singapore has a fully integrated distance fare structure with no additional boarding charges when commuters make transfers.

In fact, Singapore's public transport fares have become more affordable over the past few decade. 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 2.4% in 2023, down from 2.2% and 3.1% in 2014, 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), with competition spurring players to continuously improve.  

Competition has led to positive outcomes, for example, average bus tender prices have fallen by 15% in recent years. The productivity gains by the Public Transport Operators are then shared with commuters through the Productivity Contribution component in the fare formula. 
 
At the same time, over the past decade, we have steadily enhanced the quality of our public transport system by expanding the network, and improving accessibility and reliability of services. This has been achieved through the strong tripartite partnership between the Government, operators, and workers. Together, we will continue providing a high quality public transport service to Singaporeans that is safe, convenient, and financially sustainable in the long run.