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Infrastructure blog

IPW: initiative to drive investment in sustainable cities launches, and Singapore raises public transport fares

18 October 2022

In this week’s Infrastructure Policy Watch, we outline the new UN-led local investment platform, and Singapore’s fare increase implications.

IPW: initiative to drive investment in sustainable cities launches, and Singapore raises public transport fares
Singapore’s Public Transport Council (PTC) has announced a fare increase of 2.9% from December 2022. Image credit: Adwo/Shutterstock

Global Partnership for Local Investment launched to accelerate public-private collaboration in cities

A new Global Partnership for Local Investment initiative has been launched by the World Economic Forum and UN Habitat.

This aims to speed up public-private collaboration to deliver infrastructure in urban areas that advances the 2030 Sustainable Development Goals and New Urban Agenda.

The UN predicts that urban populations are expected to grow by more than 2.5 billion people over the next 30 years. Planning, prioritising and financing the infrastructure required is critical to keep pace with this growth.

The Global Partnership for Local Investment has already begun developing a library of case studies that identify best practices and lessons learned from real-world examples of collaboration.

These case studies will sit on a newly developed Urban Transformation Hub that will include city assessment tools, recommended actions and solutions for innovative finance.

ICE’s view

ICE’s 2021 paper on subnational action to meet net zero explored what England’s local leaders need to provide infrastructure that meets their local objectives, drawing on international case studies.

This issue was also discussed at an ICE Presidential Roundtable on levelling up earlier this year.

Strengthening the ability for the infrastructure planning and prioritisation system to get it ‘right first time’ is vital.

A stronger role for subnational actors is essential to achieve this. So is building the capacity of local governments and piloting new approaches for joint planning and co-investment.

Singapore raises public transport fares to manage inflation

Singapore’s Public Transport Council (PTC) has announced a fare increase of 2.9% from December 2022 to manage rising inflation and ensure the sustainability of the city-state’s public transport system.

In the announcement, the PTC emphasised that the cost drivers for public transport rose significantly over the past year, primarily due to increased energy prices.

This could’ve seen fares rise by as much as 13.5% within the PTC’s funding formula. Instead, the PTC has announced a smaller rise, with the remaining fare adjustment to be carried over to future fare reviews.

As of September 2022, public transport ridership in Singapore has recovered to about 80% of pre-pandemic levels, similar to public transport recovery in the UK.

As part of the fare increase announcement, the PTC reiterated its commitment to improve the existing rail network. It will also make available 600,000 public transport vouchers, keeping fares more affordable for lower-income households.

ICE’s view

ICE’s Next Steps Programme on funding public transport post-Covid-19 has explored what options policymakers can take to ensure a sustainable future funding model for public transport.

Regaining pre-pandemic levels of public transport passenger numbers will be difficult, if not impossible. If a lack of funding forces operators to cut services or increase fares dramatically, public transport becomes both less attractive and less affordable.

Few, if any, public transport systems fund their operations entirely from fare revenues – many rely on government subsidies – and none can use it to entirely cover their capital costs.

Singapore’s approach of moderate fare increases is therefore a measured one. It ensures that improvements to the existing network can continue to be made in the medium term.

Whether it’s sustainable in the long term remains to be seen.

The policy choices made when it comes to spending on public transport will determine countries’ ability to reach sustainable development goals and national strategic objectives.

In case you missed it:

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  • David Hawkes, head of policy at ICE