Why isn't fare reduced given fxxx up service, oil priced dropped 60% and pay cut is now widespread?
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Nov 7, 2008
COMMUTERS AND SHAREHOLDERS
</TR><!-- headline one : start --><TR>SMRT aims to please them all
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I REFER to Mr Gilbert Goh's letter, 'Corporatisation, if it's only for public good'.
While it is true transport fares have increased over the years, the increase has been moderate and lags behind the rise in operating costs, as well as the cost increase in health care, utilities and household necessities. Over the past six years, the total increase in bus fares was 6.8 per cent, and 4.9 per cent for trains. Factoring in the 4 percentage point increase in GST over the same period, which we fully absorbed, the actual fare increases applied were 2.8 per cent and 0.9 per cent for buses and trains respectively. The Consumer Price Index, on the other hand, increased by 5.7 per cent from 2003 to last year. In the same period, SMRT's energy costs have escalated. Between last year and this year, energy costs rose by 18.1 per cent.
SMRT is mindful of its twin objectives of keeping fares affordable for the commuting public and ensuring reasonable returns to our shareholders. Both are concurrently attainable by increasing profitability with efficient operations and growing non-fare revenue from overseas business, rental and advertising. This year, we further increased our productivity and this resulted in a reduction in the maximum fare adjustment allowable from 4.5 to 3 per cent. In addition, in support of the Government's efforts to encourage use of public transport, SMRT further absorbed a major part of the increase in transfer rebate. As a result, the effective fare increase this year for both SMRT trains and buses was only 0.6 per cent, despite significant inflationary pressures. Nevertheless, we continue to introduce many proactive initiatives, including additional train runs and train refurbishment. These initiatives are possible because we maintain a healthy bottom line.
As a corporation, it is in SMRT's interest to keep fares affordable. Even though our fares are one of the world's lowest, SMRT is committed to attaining and maintaining high standards of operational and service performance. In a recent global ranking (Nova and CoMET) of the world's top operators in Asia, Europe and the Americas, SMRT Trains was first in the areas of manpower and cost efficiency. We also maintain leading positions for punctuality and safety.
Internationally, SMRT is reputed for consistently delivering exceptional value to the public it serves and to its shareholders. We are sought after by many countries to provide consultancy services and transport solutions. Riding on our established strengths, we will continue to manage costs prudently and grow the company's profitability, while continuing to deliver services befitting those of a leading transport system. Goh Chee Kong
Vice-President, Corporate Marketing and Communications
SMRT Corporation
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Nov 7, 2008
COMMUTERS AND SHAREHOLDERS
</TR><!-- headline one : start --><TR>SMRT aims to please them all
</TR><!-- headline one : end --><!-- show image if available --></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I REFER to Mr Gilbert Goh's letter, 'Corporatisation, if it's only for public good'.
While it is true transport fares have increased over the years, the increase has been moderate and lags behind the rise in operating costs, as well as the cost increase in health care, utilities and household necessities. Over the past six years, the total increase in bus fares was 6.8 per cent, and 4.9 per cent for trains. Factoring in the 4 percentage point increase in GST over the same period, which we fully absorbed, the actual fare increases applied were 2.8 per cent and 0.9 per cent for buses and trains respectively. The Consumer Price Index, on the other hand, increased by 5.7 per cent from 2003 to last year. In the same period, SMRT's energy costs have escalated. Between last year and this year, energy costs rose by 18.1 per cent.
SMRT is mindful of its twin objectives of keeping fares affordable for the commuting public and ensuring reasonable returns to our shareholders. Both are concurrently attainable by increasing profitability with efficient operations and growing non-fare revenue from overseas business, rental and advertising. This year, we further increased our productivity and this resulted in a reduction in the maximum fare adjustment allowable from 4.5 to 3 per cent. In addition, in support of the Government's efforts to encourage use of public transport, SMRT further absorbed a major part of the increase in transfer rebate. As a result, the effective fare increase this year for both SMRT trains and buses was only 0.6 per cent, despite significant inflationary pressures. Nevertheless, we continue to introduce many proactive initiatives, including additional train runs and train refurbishment. These initiatives are possible because we maintain a healthy bottom line.
As a corporation, it is in SMRT's interest to keep fares affordable. Even though our fares are one of the world's lowest, SMRT is committed to attaining and maintaining high standards of operational and service performance. In a recent global ranking (Nova and CoMET) of the world's top operators in Asia, Europe and the Americas, SMRT Trains was first in the areas of manpower and cost efficiency. We also maintain leading positions for punctuality and safety.
Internationally, SMRT is reputed for consistently delivering exceptional value to the public it serves and to its shareholders. We are sought after by many countries to provide consultancy services and transport solutions. Riding on our established strengths, we will continue to manage costs prudently and grow the company's profitability, while continuing to deliver services befitting those of a leading transport system. Goh Chee Kong
Vice-President, Corporate Marketing and Communications
SMRT Corporation
