Rail operators cannot sustain large losses for long

1.     We thank Mr Lee Kek Chin (Maintenance more cost-effective than replacing old parts, July 12) and Mr Adam Reutens-Tan (Train operators, as public service providers, should not be focusing on profits, July 12) for their comments.

2.     Stepped-up operations and maintenance, and prompt asset renewals have improved rail reliability significantly. With intensified maintenance, the operating costs of running the rail network have increased by $270 million between 2016 and 2017.

3.     This is separate from the $2 billion spent by the Government on renewing key systems for the North-South and East-West Lines.

4.     We agree with Mr Lee that regular maintenance can keep systems in good condition, and delay the need to replace assets. However, as hardware approaches the end of its shelf life, it has to be replaced to ensure public safety.

5.     The losses incurred by the two rail operators are reflected in their financial reports. In the financial year ending on March 31, 2018, SMRT Trains reported a loss of $86 million, while SMRT Corp a loss of around $70 million.

6.     SBS Transit's Downtown Line has similarly registered losses of $125 million over the past three years, while its train division as a whole also lost tens of millions of dollars. SBS Transit, as a group, has been reporting profits in the past few years, chiefly on the back of better performance by its other business units.

7.     No rail operator can sustain such large losses for long, without performance degradation.

8.     As responsible employers, they also need to ensure that their workers' livelihoods are not affected.

9.     The Public Transport Council will find the right balance of costs to be shared between operators, taxpayers and commuters. Our common objective is to deliver a reliable and affordable MRT service for all Singaporeans.

Geraldine Low
Director, Land Transport Division
Ministry of Transport