Fresh start for delisted SMRT

Transport operator SMRT Corp was delisted from the Singapore stock exchange yesterday - ending a 16-year saga which saw a government-linked entity trying to balance public and private interests, often with mixed results.

The main reason given by SMRT and its main shareholder - state investment firm Temasek Holdings - for the delisting was so that the rail operator could focus entirely on serving the public, without the distractions of being a listed company.

The top priority of this new focus is getting the MRT network back to good running order. This is a task of national importance, since the rail network forms the backbone of Singapore's public transport system. But will being delisted actually help make SMRT trains more reliable? Not necessarily.

A myriad of contributing factors needs to be dealt with in order to address the root causes of breakdowns, with political will and enlightened corporate leadership being the two most crucial. That applies especially to the more serious breakdowns, which have not diminished in number despite the hard lessons of 2011.

The Land Transport Authority, being manager of all of Singapore's rail projects, must first of all seek to build quality. There is plenty of room for improvement, seeing how various fairly new components have given way.

These include power cables on the Circle Line which had to be replaced when the line was just three years old. Likewise, 1,600 U-bolts holding up the North East Line's power cables were rendered brittle by ammonia and chlorine in the tunnels when the line was barely 10 years old.


While delisting will give SMRT more bandwidth to devote to getting its house in order, it must start by ensuring that its staff are adequately motivated, equipped and empowered to do their jobs well. ST PHOTO: JAMIE KOH

And, of course, there is the problematic Bukit Panjang LRT, which has broken down countless times since it opened 17 years ago.

It is good that the LTA is now taking steps to bolster the network's electrical system and checking the level of salt contamination in tunnels. But what about ammonia and chlorine? Why was there such a high level of these compounds that caused thick steel bolts to snap?

And why should train tunnels not be made waterproof? Leaks, after all, are the cause of many problems. And if tunnels cannot be made waterproof, what better measures should be in place to mitigate the effects of leaks?

Should project tenders incorporate a longer warranty period so that builders and suppliers can be held more accountable for flaws? If contractors are deemed responsible for any such flaw, should they be made to pay liquidated damages on top of rectification? And should professional engineers who sign off on completed projects be made to be more answerable for inherent faults?

These are not easy questions, but they need to be answered if the goal is infrastructure that performs well, offers longevity and is good value for all stakeholders. SMRT, whether it is listed or not, cannot answer these questions because it is not involved in the construction stage. It is, however, responsible for maintaining the operating assets and is audited by the regulator - in this case, the LTA - for service standards. While a fussily designed or less-than-well-built system is harder to maintain, no operator can pass the buck entirely on this front.

A case in point for SMRT is the July 7 breakdown last year, which was traced to a salt-encrusted insulator. Would SMRT personnel have spotted the salt-encrusted insulator if the operator had not been a listed entity? Probably not, if all else in the company remains the same.

The breakdown - which paralysed the North South and East West lines for the entire evening - was of such a magnitude (nearly half a million commuters stranded) that it made the twin breakdowns in December 2011 seem like minor glitches.

And what about the string of breakdowns on the East West Line in the past week? Were the "distractions" of being listed to blame?

Truth is, SMRT must be accountable for many of its recent missteps, including one which led to the deaths of two young employees on a track early this year.

Just days after an embarrassing bus driver strike thrust the operator into the limelight in November 2012, newly minted chief executive Desmond Kuek admitted that the company had managerial, structural, cultural and systemic issues. Fixing those "deep-seated" issues, he said, was going to be a top priority.

Four years on, it is clear some of those issues remain unresolved. To be fair, no one person can effect profound change in an organisation of some 9,000 employees. A top-down approach rarely works. Change has to come from within, and start from the bottom. Management has to walk the talk, and be ready to join the troops in the trenches.

While delisting will give SMRT more bandwidth to devote to getting its house in order, it must start by ensuring that its staff are adequately motivated, equipped and empowered to do their jobs well.

To do that, it will have to spend more on salaries and perks. It will have to spend more on training. It will have to put in place a system that rewards the lowliest employee for pointing out a potential fault or malpractice, and penalises one who repeatedly misses something.

The rank and file must be given some autonomy in pointing out that which is amiss, instead of merely going through a prepared checklist (which may or may not say "report salt-encrusted insulator").

It is easier said than done, of course. It is easier to buy and install machines which can detect or even predict flaws - which SMRT is doing, by the way. But the company must know that machines are far from infallible. Just think of the new circuit breakers on the Bukit Panjang LRT which caught fire in March last year.

At the end of the day, SMRT must still invest heavily to build up its operational capability and engineering core. That means investing more in its people.

If it were listed, such a move would raise its cost exponentially and impact its bottom line drastically. That would no doubt incur the displeasure of minority shareholders. Now that its only shareholder is Temasek, and Temasek's interest is aligned with Singapore's, there is new hope for SMRT.

Yet, hope might remain unfulfilled if parties concerned are unwilling to review the status quo or to make some difficult decisions.

A version of this article appeared in the print edition of The Straits Times on November 01, 2016, with the headline 'Fresh start for delisted SMRT'. Print Edition | Subscribe