Serious BREAKING: Government and SMRT reach agreement on new rail financing framework

[SNTCK]

fter more than four years of negotiations, the government and rail operator SMRT have reached an agreement to transfer to a new rail financing framework. In this framework, which will kick off from Oct 1 pending approval from SMRT shareholders, the government will take over all operating assets from the Temasek-owned company.

The assets will be bought over at around $1 billion, with trains making up the bulk of the value. In turn, SMRT will pay a licensing charge annually to run the North-South and East-West Lines (NSEWL), the Circle Line (CCL) and the Bukit Panjang LRT (BPLRT).

The operator will have to abide by a more stringent maintenance regimen, as well as service standards. On top of current penalties for breaches, more will be added.

To reflect its asset-light status, the new framework will reflect a risk-and-reward sharing formula which will result in SMRT posting an average EBIT (earnings before interest and taxes) margin of 5%.

In turn, SMRT will pay a licensing charge annually to run the NSEWL, CCL and BPLRT for 15 years, with a possible extension of five years. The Land Transport Authority will decide when to renew assets or increase capacity, freeing up SMRT to focus fully on meeting service standards.

The operator will have to abide by a more stringent maintenance regimen, as well as service standards.

On top of current penalties for breaches, more will be added.

The Land Transport Authority will decide when to renew assets or increase capacity, freeing up SMRT to focus fully on meeting service standards.

13:42

 

[frenchbriefs]

More unnecessary red tape and bureaucracy and money changing hands.

 

[xebay11]

fter more than four years of negotiations, the government and rail operator SMRT have reached an agreement to transfer to a new rail financing framework. In this framework, which will kick off from Oct 1 pending approval from SMRT shareholders, the government will take over all operating assets from the Temasek-owned company.

The assets will be bought over at around $1 billion, with trains making up the bulk of the value. In turn, SMRT will pay a licensing charge annually to run the North-South and East-West Lines (NSEWL), the Circle Line (CCL) and the Bukit Panjang LRT (BPLRT).

The operator will have to abide by a more stringent maintenance regimen, as well as service standards. On top of current penalties for breaches, more will be added.

To reflect its asset-light status, the new framework will reflect a risk-and-reward sharing formula which will result in SMRT posting an average EBIT (earnings before interest and taxes) margin of 5%.

In turn, SMRT will pay a licensing charge annually to run the NSEWL, CCL and BPLRT for 15 years, with a possible extension of five years. The Land Transport Authority will decide when to renew assets or increase capacity, freeing up SMRT to focus fully on meeting service standards.

The operator will have to abide by a more stringent maintenance regimen, as well as service standards.

On top of current penalties for breaches, more will be added.

The Land Transport Authority will decide when to renew assets or increase capacity, freeing up SMRT to focus fully on meeting service standards.

13:42

SMRT ceo easier and less work, more pay.

 

[SNTCK]

like this, Government make sure MRT no more breakdown loh

 

[johnny333]

I'm a bit confused because I thought the PAP gov't made our public transport into a monopoly decades ago. They created SMRT & gave the majority of shares to Temasek. Now they want to take over, again

 

[scroobal]

The model did not work as proven internationally and locally when it comes to public services and utilities. Companies will neglect infrastructure and fail to invest in it as well as maintain it for short terms profits. Bonuses for CEOs and senior executives are pegged to profits. Both Saw and Kuek could not be bothered. The new model is similar to the one that has been rolled out for Buses where the govt owns the buses, depots etc. 5 year contracts are tendered out. So far 2 tenders have been won by 2 foreign companies. For trains the periods will be for 15 years.

The Pubic transport Operators (PTOs) who win the tender and operate will be required to meet more stricter service standards. If they exceed they are entitled for 10% over the annual fee. Don't meet the standard, minus 10%.Thats for the buses. Trains yet to come out but expected to be similar. All fare and revenue collected will go straight to the Government.

When MRTC which was a Stat board ran the MRT, it had much better service and hardly a glitch. Trouble started when we gave it to Temasek's SMRT.

I'm a bit confused because I thought the PAP gov't made our public transport into a monopoly decades ago. They created SMRT & gave the majority of shares to Temasek. Now they want to take over, again

 

[CABcommander]

Lesser responsibility for fat cat Desmond. Massive paycut please.

 

[scroobal]

I can guarantee you that he will leave but will take up something within Temasek or a GLC.

Lesser responsibility for fat cat Desmond. Massive paycut please.

 

[johnny333]

The model did not work as proven internationally and locally when it comes to public services and utilities. Companies will neglect infrastructure and fail to invest in it as well as maintain it for short terms profits. Bonuses for CEOs and senior executives are pegged to profits. Both Saw and Kuek could not be bothered. The new model is similar to the one that has been rolled out for Buses where the govt owns the buses, depots etc. 5 year contracts are tendered out. So far 2 tenders have been won by 2 foreign companies. For trains the periods will be for 15 years.

The Pubic transport Operators (PTOs) who win the tender and operate will be required to meet more stricter service standards. If they exceed they are entitled for 10% over the annual fee. Don't meet the standard, minus 10%.Thats for the buses. Trains yet to come out but expected to be similar. All fare and revenue collected will go straight to the Government.

When MRTC which was a Stat board ran the MRT, it had much better service and hardly a glitch. Trouble started when we gave it to Temasek's SMRT.

A case of ownself check ownself. As long as there is no independant body checking there will always be abuses. Just look at the Public Transport Council & how they approved all the fare increases.

With so many PAP cronies in the system, what is to prevent the same from thing from happening all over again

 

[red amoeba]

It's not nipping the problem at the bud. A bunch of paper scholars in LTA gonna decide when and how to buy trains n the frequency of maintenance ? Come on, it's more than cracks we see next time.

 

[virus]

cheating public money again. when it losses transfer back to national coffer for a profit and let it bleed n all losses covered by taxpayers