SMRT trains experience more breakdowns per week than an unpopular 13 year old. That’s one reason for their fare hikes: to better maintain the rail system. A justification that, you might notice, makes it possible for SMRT to raise revenue by failing harder. But maybe, just maybe, the rail refinancing network will fix that:
What is the Rail Refinancing Framework?
The idea is the Singapore government will purchase and own the rail lines (as well as some other major rail assets). Private companies, such as SMRT, will then rent / lease the rail assets, and operate them for profit.
The rationale behind this is:
- It will improve SMRT’s bottom line, since now they don’t have to pay to maintain the rail lines.
- The government will have better control over the fares.
- There might be fewer fare hikes, since its cheaper to run the trains.
- The government might a better job of maintaining the rail lines. It can’t be hard to improve on the current management. I’ve known three-pack-a-day chain smokers to manage their lungs better.
Will it Result in Lower Fares?
Right, because that’s a precedent in this country. Transport operators who actually lower existing fares.
Look, it probably isn’t happening. Private companies aren’t fond of lowering prices, not when the customer has already adjusted (psychologically, not financially) to the higher prices.
And precedent aside, do remember this is a company that once paid a CEO $1.67 million in one year (including stock options), and is rumoured to pay interns $1,800 a month. All that money has to come from somewhere.
Will it Result in Less Frequent Fare Hikes?
There is now a theoretical reason for fewer fare hikes. Either that, or the fares will rise by smaller amounts. A lot of this depends on how much the license to operate the trains will cost, when the government takes over.
Will it Result in Better Service?
If the Land Transport Authority (LTA) takes over, and implements its customary blend of insane attention to detail and disdain for sleep, then yes. We should see fewer disruptions.
Do you like the new rail financing framework? Comment and tell us why!
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