According to CEO Desmond Kuek, the “new rail financing framework (NRFF) should help operator SMRT Corporation shoulder the risk of fare revenue”. NRFF = taxpayers + commuters. But really, where is the risk when:
– public transportation is a public good not meant to generate profit
– the government can suka suka adjust fares through PAP-controlled Public Transport Council, eg high or low oil prices, fares still up
– SMRT is a monopoly and SMRT has never made any losses from rail operations, thanks to PAP’s liberal immigration policy
– ridership is guaranteed to increase by more than 3 million per day by 2030 under PAP’s Population White Paper.
Ex paper general Kuek wants to milk as much money from commuters as possible and has bent backwards to serve his political master: this will also assure him of million-dollar bonuses. And commuters are expected to believe the government is serving our interest!
Kuek: “One of the things we are looking for in a more sustainable rail financing framework is to manage the risk of fare revenue, because this . . . is entirely borne by SMRT,”. Kuek is being disingenuous by excluding other assets which were handed to SMRT on a silver platter.
Kuek is taking the public for a ride by conveniently ignoring this fact: prime properties are a sure way to make money for SMRT. Kuek wants to keep all the guaranteed profits from super prime properties while expecting taxpayers to shoulder the burden of financing rail infrastructures.
Did it not occur to Kuek that a percentage of the $133 million non rail profit should not be paid out as dividends? Why should SMRT pay Temasek $71.8 million (54% shareholding) in dividends from non-rail profit instead of keeping a percentage for maintenance?
“Under the NRFF, Temasek- owned SMRT is expected to emerge as an asset-light company and a pure operator”. If SMRT really intends to be a “pure operator”, it should cease running all non-core businesses and return $133.3 million in non-rail profit to the government.
But of course this is never going to happen. Imagine headlines screaming paltry profits made by scholars, wouldn’t that be an insult to PAP? Where will Temasek hide its face?
In short, the government will strike a deal with SMRT to take over the maintenance of SMRT assets except profitable ones. This will result in more profit from SMRT being channeled into Temasek and a higher pay package for paper general Kuek and his buddies at the expense of taxpayers and commuters.