SMRT to move to asset-light model, says report

SMRT trains seen moving along Ang Mo Kio Ave 1 in January 2015. PHOTO: ST FILE
Passengers seen alighting at Braddell Station in December 2011.
A SMRT employee working on the track replacement exercise on the North-South Line carried out by rail operator in late April 2013. PHOTO: ST FILE
(From left) SMRT Trains Managing Director Lee Ling Wee, President and Group CEO Desmond Kuek and Group Chief Financial Officer Manfred Seah addressing the press conference on LTA taking over its assets. ST PHOTO: DESMOND WEE

SINGAPORE (BLOOMBERG) - Singapore will propose moving SMRT Corp towards an asset-light business strategy, people with knowledge of the matter said.

The Government plans to announce a new structure for the Singapore rail system as soon as Friday (July 15), according to the people, who asked not to be identified as the information is private.

SMRT called for a trading halt around noon on Friday pending an announcement. "We will share further details via appropriate channels later today," Mr Patrick Nathan, SMRT's vice-president of corporate information and communications, said in an e-mailed statement.

The new model will allow SMRT to focus on operating and maintaining subway trains, one of the people said.

Singapore has been studying options including having SMRT sell its trains to the Government, people with knowledge of the matter said in December.

SMRT, which has a market value of S$2.4 billion, has faced public criticism for service disruptions in the past four years even as it expanded its network. Transport Minister Khaw Boon Wan appointed an engineering specialist last October to advise on rail transformation and said the Government was discussing changes in the industry structure to bring about "better alignment of incentives".

Any sale of SMRT's trains would follow a similar restructuring announced for the Singapore's public bus system in 2014.

Singapore will own all bus infrastructure, such as depots and vehicles, while bus operators will bid for the right to run services on routes laid out by the Land Transport Authority.

Representatives for Singapore's Land Transport Authority did not immediately answer phone calls and e-mails seeking comment.

A spokeswoman for Singapore's Ministry of Transport said she could not immediately comment.

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