Will SMRT be nationalised as bothersome breakdowns persist?

Private firms lack the incentive to invest, say analysts.

Rail maintenance woes have been the bane of SMRT’s operations for a while now, as its rail operations suffered a third straight quarter of operating losses on back of maintenance costs.

While frequent delays and breakdowns continue to bug SMRT and its commuters, analysts stress a further need for government intervention.

According to RHB Research citing Lee Kuan Yew school of public policy dean Kishore Mahbubani, Singapore’s public transport system should be run by the government, as private corporations lack the incentive to invest in the long-term maintenance of a public good.

Meanwhile, RHB says there is still the hope of the new rail financing framework, which will improve the profitability of SMRT’s rail operations.

“[It will also] free up capital through the transfer of rail assets to the Government, appears more palatable at this juncture and could happen latest by 2019, which more clarity being received from Land Transport Authority (LTA) by 2017,” RHB Research added.

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