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Profitability of rail operations not main concern

22 Jul 2019 Media Replies

1.     We agree with Mr Paul Chan Poh Hoi (Profitability should not be main concern for rail operators, July 18) that profitability should not be the main concern for rail operators. Their primary objective is to provide a safe and reliable MRT service.

2.     But if they keep incurring losses because revenue does not fully cover operating cost, they will not be able to deliver safe and reliable services. Mr Chan referred to the Hong Kong and Tokyo metros as possible financing models.

3.     They are indeed good operators with healthy bottom lines and they run their trains well. They also charge fares which are significantly higher than in Singapore.

4.     As noted by Mr Chan Choon Yuan (Include profits from rental, ad space when computing earnings, July 18), all metro systems rely on a mix of fare and non-fare revenue.

5.     Our rail operators' non-fare revenue from advertising and retail spaces covers less than 10 per cent of their operating costs.

6.     We encourage them to strive to increase non-fare revenue, but they must not be distracted from their core business of running a safe and reliable MRT service.

7.     Like Mr Ramamurthy Mahesh Kumar noted (Government can't keep subsidising public transport operations, July 16), we are mindful that heavy government subsidies in public transport put a strain on taxpayers.

8.     Nevertheless, we do subsidise public bus and train services heavily to keep public transport affordable. We will continue to do so, but it has to be done in a sustainable way.
 
Christine Yap
Senior Director, Corporate Communications Division
Ministry of Transport