NSW bus fares could rise 3% a year

The NSW pricing watchdog has paved the way for bus fares to increase by up to three per cent a year until 2017 in Sydney and surrounding areas.

The Independent Pricing and Regulatory Tribunal (IPART) has given government and private operators the green light to increase bus fares by an average maximum of 2.6 per cent in January next year and by three per cent each year for three years after that.

The changes would apply to bus services in Sydney, Newcastle, Wollongong, the Central Coast, the Hunter and Blue Mountains.

IPART chairman Peter Boxall on Tuesday said the tribunal set maximum average fare increases, but changes to individual fares were set by the government.

But if the 2.6 per cent increase was applied to any single "MyBus" ticket, it would mean an increase of 10 cents, while a "TravelTen" ticket would increase by up to 80 cents.

The main reason for the fare increases was the cost of the government bus fleet expansion, Dr Boxall said.

Transport Minister Gladys Berejiklian said the government would consider the recommendations and respond by the end of the year.