SINGAPORE – Shares of Singapore's public transport provider SMRT Corp Ltd fell 3.6 per cent on Monday to its lowest level in more than two months, following three major breakdowns in its trains last week.

At 0104 GMT, shares of SMRT were traded at S$1.755 with 145,000 shares changing hands.

The disruption in SMRT's train services prompted calls for its chief executive to resign, but the Straits Times reported that she said she was not planning to step down.

'The problems with the trains would likely lead to additional costs. The free shuttle buses and extra fuel used, all this needs money. If they decide to do a major overhaul, it will cost even more,' said a local dealer.

The Circle tightens around SMRT boss

Minister expresses concern over way incident was handled; after spate of disruptions, some ask if problem is systemic

THIS year has been SMRT CEO Saw Phaik Hwa’s annus horribilis and it might also be her last. Resignation has suddenly become an option for Ms Saw, after the worst train breakdown in the firm’s 24 years of operations happened on her watch, on Thursday night.

When asked yesterday at a press conference if she would resign, Ms Saw said: ‘It’s something I would seriously consider if it is necessary to do so, but I think I will reserve comment at this moment.’

Ms Saw apologised for the five-hour breakdown on the North-South Line that left 127,000 commuters stranded, including the 4,000 that were stuck in train carriages with little or no ventilation.

This comes on the back of the 40-minute breakdown on the Circle Line, which caused a six-hour disruption to the full service, squarely in the middle of the morning rush period on Wednesday.

When asked about the likelihood of Ms Saw stepping down, Transport Minister Lui Tuck Yew said: ‘The important thing to us is to hold the SMRT board and management responsible and to deliver the commitments that they have made.’

He was speaking to reporters at Changi Airport last night, after returning from the Asean Transport Ministers’ meeting in Phnom Penh. ‘I was very disappointed with how this was handled, especially for the commuters that were in the affected trains.’

Calling Thursday night’s disruption ‘immensely serious’, Mr Lui added that he had spoken to SMRT chairman Koh Yong Guan yesterday afternoon to ‘reiterate the government’s concern over the incident and how it was handled’.

Some wanted to move on from the incident. ‘Singaporeans should just let go,’ said housewife Kylie-Lee Wearnes.

If there is any sympathy for Ms Saw, there is certainly very little for the corporation itself, which has seen a chain of service disruptions and two major security breaches in recent years.

On two separate occasions, SMRT’s train depots were broken into, and its train carriages vandalised. In September, a four-hour disruption on the Circle Line was blamed on a faulty cable.

The woes of the Circle Line have been especially difficult for transport specialists to swallow, given how new it is. Referring to SMRT’s statement on Wednesday about the ‘communication network problem’ that had not yet been fixed, associate professor Lee Der Horng of the National University of Singapore said: ‘This, I can only say, is very disappointing. (The Circle Line) is brand-new . . . and this can still happen. I believe that before they opened, they worked with regulators to do the checking and testing.’

On Thursday night, Mr Lui said on Facebook: ‘I do not know if these are isolated incidents or whether there are systemic and more serious underlying issues causing these breakdowns.’

He added yesterday that a team of specialists will be assembled by next week for a ‘thorough review’ of the transport system.

Anthony Chin, an associate professor of transport economics at NUS, told BT: ‘The Circle Line took 10 years to complete – 10 years is enough time to test the system. If it’s a systemic problem, then we’re in for a lot of trouble.’

Where the 24-year-old North-South Line is concerned, Prof Lee – who is a transport researcher – was willing to concede that it might have been an issue of age. SMRT had attributed Thursday night’s breakdown to a ‘power rail problem’.

‘It’s possible as time goes by, the power rail may have some additional wear-and-tear. If this is the reason, it cannot be used as an excuse. The increased train service frequency doesn’t mean we should have to compromise on service reliability. They should also intensify the maintenance,’ he said.

Three years ago, the company made history with a record-breaking fine – $387,176 – when the East-West Line experienced a seven-hour disruption. This affected 57,000 rush-hour commuters – less than half the number stranded on Thursday night.

While a fine of a similar size will not be material to SMRT, which took in $161 million in net profit for its last financial year, some transport analysts are expecting a new record-breaking fine.

Under the Rapid Transit Systems Act, the LTA can fine rail operators up to $1 million if service disruptions are found to be caused by negligence.

‘The fine for this one has to be more. (LTA) also has to take into consideration public sentiment at the moment,’ a transport analyst told BT.

‘I am more concerned about the infrastructure at this point – whether they need to make a massive overhaul. The refunds to passengers and the cost of the broken window will be minute compared to SMRT’s earnings.’

The window the analyst was referring to was broken by a marine insurance professional who had been among the thousands stuck in trains for almost one hour on Thursday night.

Even as SMRT tallies up the total cost, economists believe that the emotional and social costs borne by the passengers affected are bound to be hefty.

It’s traumatic for a lot of people who had to walk in the tunnel, especially young children, and this will form their reference point about public transport.

This latest series of public transport snafus has come at an inopportune time, on the heels of an unpopular cab fare hike and in the wake of a Chinese national bus driver getting lost for two hours after being diverted from his route.

While the quality of service standards for bus operators have been tightened over the last few years, there has been no change to the financial penalties imposed since implementation in 2007.

‘Cab fares have just been raised and (the disruptions) happen,’ said Vishnu Varathan, economist at Mizuho Corporate Bank. ‘(The average commuter) will say, ‘Why am I hemmed in?’ And we will attribute it to all kinds of things – our policy on foreigners, on how we regulate public transport and then you get pretty miserable, thinking about these things.

‘Maybe you can’t argue that the breakdown was due to more (foreigners). That’s a bit spurious. But you can argue that the fact that people have to miss three trains and we’re seeing packed trains – that is something, though.’

SMRT ‘very sorry’ for MRT breakdown

Disruption, which hit 127,000 commuters, caused by a section of misaligned third rail that supplies power

THE five-hour disruption on the North-South MRT Line on Thursday started with four trains stopping in the tunnel, leaving 127,000 commuters stranded – 4,000 of whom were stuck in stuffy carriages.

SMRT Corp president and CEO Saw Phaik Hwa apologised for the lapse at a media briefing yesterday.

‘Many commuters are unhappy at the moment. There is nothing more to say except that we are very sorry,’ she said. ‘We apologise for the considerable inconvenience, especially to those who were uncomfortable in the stranded trains.’

The disruption started at 6.47pm and was caused by a 40-metre section of misaligned third rail between Dhoby Ghaut and City Hall MRT stations.

The third rail, which supplies power, damaged the collector shoes of the four north-bound trains and caused them to stall – two at Dhoby Ghaut station, one before Orchard station and one at Braddell station.

SMRT immediately despatched its engineers who took an hour to rectify the fault, said SMRT Trains executive vice-president Khoo Hean Siang.

The service could have been restored by 9pm, but Ms Saw said that to ensure safety was not compromised SMRT staff had walked from one station to another to inspect the third rail.

The train services resumed at 11.40pm. Stations from Marina Bay to Bishan were affected by the breakdown.

Three of the stalled trains were eventually pushed out, while the passengers of the train at Dhoby Ghaut had to be evacuated on foot, but not after enduring stifling conditions with only ventilation but no air-conditioning.

When asked why commuters had been left onboard, SMRT said it preferred to get the train moving again in such a situation.

‘As far as possible, we try not to detrain passengers and try to move the train to the nearest station,’ said Goh Chee Kong, SMRT Corp’s senior vice-president of communications and services.

Ms Saw said the cause of the misalignment was still being investigated but ruled out ageing infrastructure because the listed company undertakes strict routine maintenance and regular overhauls.

‘We can’t ascertain why it happened because it’s never happened before,’ she said.

SMRT said a confluence of factors complicated ‘a complex situation’. There was the peak-hour congestion as well as the severity of the problem.

Although 300 off-duty staff were activated to help deal with the crisis, and 87 buses deployed as part of a bus bridging service, SMRT has been hit by a deluge of brickbats from the public for its response to the breakdown and a lack of communication to commuters.

In response, it said it was difficult to gauge exactly how much information was relevant or accurate, and that the train operators and station staff had to balance communication with system reset work.

Ms Saw reserved comment when asked whether she or senior management would take responsibility for this episode and recent disruptions by resigning, although she did say she would consider it if necessary.

Thursday’s train disruption came one day after an early-morning breakdown on the Circle Line.

In October, the North-South Line and East-West Line were also affected by faults on two occasions, with the latter occurring during the evening peak period.

SMRT is the bigger of Singapore’s two rail operators. It runs the North-South and East-West MRT Lines, as well as the recently fully opened Circle Line with a total network of about 126km, compared with SBS Transit’s 40km.

SMRT revises taxi fares from Dec 20

SMRT is revising its taxi fares with effect from Dec 20 in a bid to help its taxi drivers mitigate rising operating costs and inflation. This comes hot on the heels of a similar fare revision by ComfortDelgro.

The flag-down rate for standard taxis will be raised by 20 cents, while distance-based charges for the same taxi category will increase by between $0.02 and $0.03 per kilometre, on average.

Booking fees for standard taxis will be reduced by 20 cents, and all location surcharges will remain the same. The flag-down fare, and both normal and advance bookings for SMRT’s Chrysler luxury taxis remain unchanged.

SMRT said that it has to keep pace with the fare revision by other taxi operators so that its 4,000-plus drivers ‘will not feel deprived of a better income opportunity’.

‘Our drivers need a more substantial level of income, not just lower costs or rental rates, in order to cope with the increasing cost of living and higher diesel prices, and continue their businesses,’ SMRT added.

It stressed that rental rates for its taxis are not excessive and its financial records have shown a weak or non-profitable performance in the taxi business.

ComfortDelGro’s new taxi fare structure kicked in yesterday.

Among the changes, the flagdown fares for ComfortDelgro taxis have been raised by 20 cents for most taxis, and by 70 cents for limousines. Meter fares have also gone up by two cents per fare band, over a slightly longer distance. Peak period is lengthened in the morning from 6am to 9.30am, compared to the previous period of 7am to 9.30am.

SMRT Q2 profit plunges 25.6%

Operating expenses rise 15.5% as electricity and diesel costs surge 44%

RISING energy prices continued to take their toll on SMRT Corp, with its net profit falling 25.6 per cent year on year to $34.1 million for the second quarter ended Sept 30.

Revenue for the three months climbed $15.1 million or 6.1 per cent to $261.1 million. This was due mainly to higher MRT and bus ridership, contribution from Circle Line, higher taxi rental revenue, increase in external fleet maintenance revenue and higher rental and advertising revenue, partially offset by lower average fare for MRT and bus.

But total operating expenses rose 15.5 per cent to $223.8 million as electricity and diesel costs surged 44 per cent or $13.3 million to $43.4 million.

The rail and bus operator also faced margin pressure from higher staff and related costs, repairs and maintenance costs as well as other operating expenses, although these were partially offset by higher revenue and other operating income.

Operating profit for the quarter came in 24.9 per cent lower at $42.1 million. Q2 earnings per share fell to 2.2 cents from 3.0 cents in the year prior.

Revenue from train operations rose 6.0 per cent year on year to $140.9 million on higher ridership, partially offset by lower average fare for MRT. But operating profit slid 24.7 per cent to $22.8 million mainly.

Bus operations also registered a 2.0 per cent gain in revenue to $55.8 million. However, the segment chalked up an operating loss of $2.6 million as compared with a profit of $1.4 million in the corresponding period last year.

Taxi operations raked in a gain in revenue of 24.7 per cent to $28.9 million, but suffered a 68.5 per cent decline in operating profit to $146,000 mainly due to higher depreciation and insurance costs.

SMRT declared an interim dividend of 1.75 cents per share.

For the first six months of the financial year, SMRT’s revenue climbed 6.8 per cent to $514.2 million while net profit fell 18 per cent to $68.9 million.

SMRT expects revenue to be higher year on year in the third quarter and the next 12 months due to expected rises in ridership following the opening of all Circle Line stages.

The one per cent net fare adjustment approved by the Public Transport Council for trains and bus fares has taken effect from Oct 8. However, increasing cost pressures, particularly energy costs and staff and related costs, are expected to have an impact on the group’s performance.

SMRT shares closed four cents higher at $1.89 yesterday.