Workers’ Party released a media statement on July 20 commenting on the new MRT rail financing framework and buyout of SMRT by Temasek Holdings
In the statement penned by Non-Constituency Member of Parliament (NCMP) Dennis Tan, the party stated that although it is a long overdue corrective to a major policy mistake, the new rail financing framework for SMRT is a step in the right direction.
Land Transport Authority (LTA) had earlier stated that it will pay $1 billion to SMRT Trains Limited (SMRT Trains) to purchase the latter’s operating assets under the New Rail Financing Framework (NRFF) after discussions concluded for the transition of the North-South and East-West Lines (NSEWL), the Circle Line (CCL) and the Bukit Panjang LRT (BPLRT).
Soon after the announcement of the NRFF, Temasek Holdings made an offer on Wednesday to buy over and take SMRT private at $1.68 per share.
The party wrote, “This move corrects the mistaken course taken by the government in the year 2000 when MRT operations were privatised, which created a tension between the private company’s impulse to maximise shareholder value from a quasi-monopolistic position, and the rightful goal of operating a public transport system that best serves the public,” .
The statement further stated that the privatisation of the MRT has increased many problems, such as overcrowding to frequent breakdowns.
In its GE2015 manifesto, the Workers’ party had called for all operating assets to be placed under a new government body, the National Transport Council, so the ownership and the regulatory functions can be separated.
It stated that although it may seem like a move towards nationalisation, their concern about the buyout of SMRT by Temasek Holdings could result in none of the benefits of nationalisation, such as government control over MRT’s operations and management, while SMRT’s financial and operations may become less transparent to the public.
The party in its statement called for the following:
1. Shortening of the SMRT licence period from 15 years to 10 years to enhance contestability.
The party states that as SMRT has had 15 years of operating experience as a private company, another 15 years of operating licence is unnecessary before the government considers if and how the award of the operating license can be changed for the NS, EW, Circle and Bukit Panjang LRT lines.
In its last manifesto, the Workers’ Party called for assessing the changed government public transport financing model for 10 years before once again reviewing if the model has worked at driving both quality and efficiency.
Provide clarification if takeover will reduce financial and operational transparency
The party seeks clarity on whether a Temasek takeover would reduce financial and operational transparency given Temasek’s status as a private exempt company, and how Temasek would manage the tension between its role of maximising shareholder value and delivering better public transport value.
Provide clarity if lines operated by SBS Transit will transit to new framework
The party also sought clarification on whether and by when the NE Line and Sengkang-Punggol LRT under SBS Transit would transition to this new framework.