Half of Rail Revenue to be Spent On Maintenance

In the light of several prominent train breakdown, the SMRT said it expects to spend about half its total rail revenue by the end of its financial year on maintenance related expenses for its ageing rail network. 

SMRT CEO Desmond Kuek said that presently 41% of every dollar of fare revenue goes to rail-related maintenance expenditure. This is expected to grow to 50% by the end of its financial year. The remarks were made yesterday (28 Oct) at its second quarter results briefing. 

The reasons for the increase is due to growth expansion, upgrading activities and the recent revision of fares that would take effect by year end. Besides preparing for the Tuas extension, the SMRT is also rolling out 45 new trains from now till the end of the year.  In addition rail sleepers and signally systems will be replaced and renewed.

These measures will inevitably result in higher operating costs which will affect the company’s bottom line results moving forward. 

Source: Rail maintenance expenses to account for half of rail revenue: SMRT (Today, 29 October 2015)

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