Rising operating costs offset transport sector’s gains from 2.8% fare hike

Gross revenue is pegged at $48.5m.

The gains from the recently announced fare hike may not make any significant changes to transport companies’ financials.

Singapore’s Public Transport Council has decided to grant an overall net fare adjustment of 2.8% to be made effective in April.

According to Maybank KE, with a fare revenue pool of $1.7b pa, this fare hike will translate into higher gross revenue of $48.5m for the sector. It implies net benefits of $35m, $16.4m accruing to SBST and $18.6m to SMRT.

Singapore’s two public-transport operators are also required to contribute a combined $13.5m to the Public Transport Fund: $5.5m from SBST and $8.0m from SMRT.

Meanwhile, OSK-DMG expects gains to Singapore’s land transport companies from current fare rise will largely be offset by rising operating costs and contributions made to the Public Transport Fund.