SMRT Limited’s endeavour to regain commuters’ faith-

Singapore’s SMRT Corporation Limited is one of the two multimodal transport operators in Singapore. Since its incorporation in March 2000, SMRT has been operating in the mass rapid transit (MRT), light rapid transit (LRT) bus, and taxi segments in Singapore.

At present, SMRT is going through a rough patch due to the ageing infrastructure and its inability to keep up with the rapid increase in demand for public transport. Its profit after tax has been declining over the past few years, even as its operating ratio has remained on the high side. The group’s operating profit declined to S$148.7 million in 2011-12, 24 per cent lower than in 2010-11. The slide could be attributed mainly to higher operating expenses, rising diesel prices and staff costs, the depreciation of its bus fleet, as well as increasing repair and maintenance (R&M) costs.

Adding to its woes has been a spate of breakdowns/faults in its various lines, the most recent of it was in April 2013. In July 2012, the Land Transport Authority imposed a maximum fine of S$2 million on the company for violating its licence obligations pertaining to the two breakdowns in the North–South and East–West lines in December 2011. Since then, the government has tightened SMRT’s service conditions, including those for taxi operations.

The SMRT Group

Singapore MRT Limited was established in 1987 to manage the operations of the North–South and East–West lines of Singapore’s MRT system that was commissioned in the same year. Further, Singapore LRT Private Limited that was set up in 1997 secured the operation of the Bukit Panjang LRT system in 1999. Incorporated in March 2000, SMRT was listed on Singapore Exchange Securities Trading Limited four months later. SMRT is the holding company of SMRT Trains Limited, SMRT Light Rail Private Limited, SMRT Buses Limited, and SMRT Taxis Private Limited.

MRT

SMRT holds the licence to operate approximately 86 per cent (126.5 km) of the total MRT network in the island country. The average daily ridership on SMRT’s network currently stands at about 2 million. The network comprises three metro lines:

  • The 44 km North–South (Red) Line with 25 stations connects central Singapore to the north and the south. It is also the first MRT line to operate in Singapore (in 1987).
  • The second oldest MRT line is the 49.2 km East–West (Green) Line with 31 stations. It links central Singapore to the west and the east, including Tanah Merah that goes to Changi Airport.
  • The Circle (Orange) Line is the latest addition to the MRT network. The 35.3 km line that connects all the other lines was completed in January 2012. With 30 stations, it is also the longest fully underground, automated, and driverless rapid transit line in the world.

SMRT has the right to operate the MRT system till 2028.

Currently, SMRT is also engaged in the construction of extension lines for the routes it operates. The first project that will extend the North–South Line by 1 km and one station is likely to be completed by 2014. At least two more stations may be added to the line in the future.

The second project involves the addition of two extension lines to the East–West Line extension. The first is the 8 km Tuas West line that will be a fully elevated westward extension from Joo Koon station. France-based Alstom has been contracted by SMRT to design, supply, and install double tracks on the viaduct, the aluminium third rail, four elevated stations, and an 18.5 km single track at the Tuas depot by 2016. Passenger service is expected to commence by 2018. The second is the fully elevated 6 km southward extension line from the easternmost station along the Tuas West extension that will include two new stations by 2025.

In order to tackle disruptions in train services, SMRT is working with the relevant government entities to put in place revised processes for the operations and maintenance of its lines. This measure was one of the follow-up steps that ensued from the December 2011 breakdowns that affected over 200,000 passengers.

LRT

SMRT was awarded the 30-year operating right for the Bukit Panjang line that was commissioned in 1999. The system that connects the Bukit Panjang estate to the MRT network at Choa Chu Kang station is fully automated and driverless. There are 14 stations on the 7.8 km elevated LRT track. The LRT service has witnessed several disruptions that have caused inconvenience to commuters. As part of its contingency plan,  SMRT has made transit/bridging arrangements free of charge for the affected passengers in such situations.

Buses

With around 1,050 buses in its fleet, SMRT provides 74 bus services that connect the western and north-western areas to the rest of Singapore. It mainly operates premium and chartered bus services. In mid-2012, SMRT expanded its fleet with the addition of 200 MAN A22 buses and 40 Mercedes-Benz Citaro O530 buses. Further, SMRT joined hands with China-based BYD Corporation, which enabled it to launch an electric bus service in Singapore.

There are five bus interchanges operated by SMRT, all of which are near an MRT station – Bukit Batok, Choa Chu Kang, Sembawang, Woodlands, and Yishun.

Taxis

SMRT is also the largest taxi operator in Singapore with a fleet of over 3,000 taxis. The taxi fleet includes sedans, limousines, multi-purpose vehicles, and compressed natural gas vehicles. The taxi segment is the only one that generated a higher profit during the third quarter of 2012-13 (S$2.3 million) than in the corresponding period of 2011-12 (S$1.1 million).

SMRT launched a number of consumer-friendly initiatives to facilitate a comfortable ride experience:

  • A smartphone application – “Tap a Cab” – for booking taxis;
  • A NETS payment terminal in the recently introduced taxis for cashless payment; and
  • London taxis for wheelchair-bound passengers.

At the same time, SMRT implemented a taxi fare hike in December 2011. Apart from increasing the flag down rate by S$0.2 and S$0.3 for standard and limousine taxis, respectively, it adjusted some surcharges as well.

Fare system

Singapore uses the most advanced fare system in the Southeast Asia region. It has an interoperable system that combines payments of all public transport modes and retail purchases. A contactless smart card called EZ-Link is used for fare collection on public transport. The card is based on the FeliCa technology created by Japan-based Sony. This interoperable system was introduced in December 2008 with the aim of transforming Singapore into a largely cashless society. A single, multi-purpose, stored-value card is used for micropayments including transit (bus, MRT, LRT, and taxi), parking, and shopping.

With regard to the fare structure that was introduced in July 2010, fares for trains, LRT, and buses are based on the distance travelled by passengers. Concessions are given to students, senior citizens, and full-time national servicemen. Passengers also have the option of travelling with single-trip tickets or contactless smart cards. SMRT offers rebates to passengers using the latter option. Further, the fare is revised according to a formula that is based on the consumer price index and a change in average monthly earnings.

Bumpy recovery ahead

“MRT operations will remain SMRT’s core business in the future,” noted Koh Yong Guan, SMRT’s chairman, SMRT, in one of the company releases. However, it has to work hard to rebuild commuters’ faith in the public transport system after several service disruptions. Currently, a debate is taking place within the country regarding the public transport model that has been blamed for the fall in service levels, even as costs for commuters have continued to rise. Going forward, SMRT faces potential headwinds, as the government could decide to change the public transport model in the country.

With regard to financial sustainability, the company is confident about its growth prospects for various reasons. With the decline in global fuel prices, SMRT’s operation cost is expected to decline. Further, the fare hike of just 1 per cent, which was introduced in October 2011, will improve SMRT’s revenue.