Late Again? Oh The MRT Got Delayed Lor

“Oh the MRT lor, delayed again!”. This excuse has served me well in the recent times when I was late for appointments – by no fault of MRT at all. How has the symbol of efficiency become a byword for delay?

Public transport, especially the Mass Rapid Transport (MRT) has taken a lot of flak with disruptions in Dec 2013 and Jan 2014, earning SMRT a recent S$1.6mil fine! But recently, the relevant authorities appear to be doing something right with a lower frequency of such delays.

2 Key Indicators of train reliability have improved over the years:

1)    Service Delays above 5mins

2)    Train Withdrawals

In comparison with most parts of the world, Singapore’s public transport in my opinion can still be ranked close to the top. Try asking people who had issues with the London Tube! On 1 Jul 2014, London was faced with an eight-day strike by the power control staff! What’s new.

 

“MRT Breakdown Again? SMRT Lor!”

When the train breaks down, most of us would tend to blame SMRT Corporation Ltd (SGX:S53). With the 3 out of 4 of the letters of SMRT made out of MRT, it wouldn’t be too tough to guess why everyone would jump to that conclusion.

 

Is It Always SMRT’s Problem?

Nope! It definitely isn’t!

Most people may not be aware that Singapore’s public rail system is considered to be a duopoly with the 2 players being SMRT and ComfortDelGro Corporation Ltd (SGX:C52). ComfortDelGro (CDG) has a 75% equity interest in SBS Transit Ltd (SGX:S61). Both SMRT and CDG dominate the rail, bus and taxi businesses in Singapore.

 

Who Controls Which MRT Line?

SMRT: North-South Line (Red), East-West Line (Green) and Circle Line (Orange)

CDG: North-East Line (Purple) and Downtown Line (Blue)

 

What Was The Recent Hoo-ha With The “Rail Financing Framework”?

At the moment, SMRT only owns the trains and signalling system on the NS and EW lines. In light of the proposed “Rail Financing Framework”, Land Transport Authority (LTA) would own both the operating and non-operating assets and the operators – SMRT and CDG would pay a license to operate the trains. This framework is currently being tested out in the DT line!

This would release the weight off SMRT as they wouldn’t have the burden of the heavy capital commitments required to upgrade the rail networks. Previously, rail operators were caught in a classic case of a “catch-22” with their revenues capped by the Public Transport Council against the ever-rising inflation as well as the need to improve the rail system. This “Rail Financing Framework” is explored in detail in our subsequent post!

 

Value In Action

Hopefully with the proposed system, the government would be able to bring Singapore’s public transport system back to being the symbol of efficiency!

In future, don’t put the blame on SMRT even if a disruption occurs on the NEL 😀

 

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All views and opinions articulated in the article were expressed in Mun Hong’s personal capacity and do not in any way represent those of his employer and other related entities. Mun Hong do not own any shares in the companies mentioned above.

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