SMRT, LTA in talks over rail-financing framework

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http://www.todayonline.com/singapore/talks-between-smrt-lta-rail-financing-framework-ongoing

About three months after SMRT submitted a proposal to sell its rail assets to the Government, the Land Transport Authority (LTA) and the public transport operator are still some way off from reaching any agreement.

Adding that he was unable to disclose details of SMRT’s proposal, Transport Minister Lui Tuck Yew said he understood that there “remains a wide gap between the opertator’s expectations and LTA’s position”.

“One of LTA’s considerations is that the valuation of SMRT’s business must take into account not only the value of existing assets that SMRT owns but also its current and future capital expenditure obligations, as required under the existing licences.”

SMRT has been in talks with the Government for some time on extending the new rail-financing framework — which was introduced in 2010 and applies to new MRT lines — to its existing lines.

Under this system, the Government will pay for and own rail assets such as the trains and signalling systems, which will be leased to operators.

A Transport Ministry spokesperson said it needed to study it in detail and that a transition to the new framework “will only proceed on mutually acceptable terms to both the Government and the operator”.