Greed

Just 3 days after the fare hikes and we see this. Good info.

ST Oct 3, 2007

Bus and train trips hit record levels

SMRT and SBS Transit could earn $20.7m more in fares as average daily rides rise to 4.4m

By Christopher Tan

SINGAPORE'S bus and train operators are reaping the benefit of a surge in public transport use that has sent ridership to record levels - despite fare hikes. (What other choice we have? Walk to work?)

The country's growing population, higher tourist numbers and booming economy are behind the marked increase in usage.

An average of 4.363 million rides were made on buses and trains each day in the financial year ended March 31, said the Land Transport Authority.

This pips the previous high of 4.358 million daily rides in 2001.

And figures from SMRT and SBS Transit show that daily ridership has hit 4.438 million in the April to June period of the current financial year.

Financial second-quarter numbers are not out yet but preliminary data from the two firms indicates that ridership is set to cross 4.5 million.

The striking increases - they even caught financial analysts by surprise - have reversed a worrying sign of two years ago when ridership slumped to a seven-year low.

An appreciable rise in Singapore's population - which grew 4.4 per cent to 4.68 million at the end of June - is a key factor behind the ridership growth, which in turn will swell the coffers of transport operators.

Based on average fares, the extra rides, if sustained, will translate to $20.7 million more in turnover for the two companies - a $12.4 million rise in bus revenue and an $8.3 million increase in rail revenue a year.

Analysts had factored in the positive trend but were still taken aback by the increase.

ABN Amro Asia Securities analyst Fera Wirawan said in a report on ComfortDelGro, the parent company of SBS Transit: 'Bus ridership in the first half of 2007 has exceeded our forecasts for the 2007 financial year by 2 per cent, while that for rail has almost reached our target.'

She is now projecting bus ridership to grow by 3.3 per cent for the 2008 financial year.

Citigroup Singapore strategist Lim Jit Soon said that besides the growth in Singapore's population, a higher employment rate and more tourist arrivals are also driving ridership numbers.

SBS Transit spokesman Tammy Tan said more people moving to Sengkang and Punggol has boosted ridership on the North-East MRT line. The system carried 307,062 passengers a day in July - 56 per cent up on July 2004.

Ms Wirawan expects ridership on that line to continue chalking up 'double-digit growth' for at least two more years. (Yeah more profit!)

But observers point out that the two transport operators would have to earn their keep.

The Public Transport Council (PTC) has just raised service standards for buses, which will mean more vehicles will have to be put on the road to meet them.

The council wants at least 80 per cent of bus services to run at frequencies of not more than 10 minutes during weekday peak hours, down from 15 minutes now. (Easy they just have to reduce the frequency during off peak.)

Bus companies have two years to comply. (Why 2 year? Shouldn't they comply before the fare hike?)

Rail standards are not under the PTC's purview.

Analysts said the transport companies will also continue to face cost pressures from rising fuel prices, higher Central Provident Fund contributions and a higher Goods and Services Tax rate. (I thought a listed compnay can claim GST from the gov? Correct me if I am wrong)

Ms Wirawan said: 'In a buoyant labour market, you need to raise salaries by more than usual to keep people.'

On top of the revenue growth from rising ridership, SBS Transit is expected to gain $9.3 million from the latest fare revision which took place on Monday, while SMRT will reap $3 million. (Bloody blood suckers)