SMRT

(25-04-2012, 02:36 PM)ken Wrote: Well, last year maintenence expenses is about $77 mil. The latest $900 mil for about 9 years is about $100 mil per year. That will be a $23 mil increase, which will be shared with LTA.

Later years, fares have to be increased to be in line with expenses, particularly oil prices.

I believe dividend of 8.5 cents will remain, but do not expect any increase.

This work out to be about 4.8%. Better than puting it into fixed deposits.

The R&M expense of ~77 Mils is not only for train. It includes taxi and buses as well. But with higher complexity, train R&M expense should carry higher ratio.

Even with that, i do not think we should just offset R&M expense with new capital expense, although it will lower the R&M expense in the initial years.

my 2 cts

indeed, the $200 million contract for signalling is a new contract while the resleepering is going to take up a major part of the $900m too since it will last until 2019. LTA should be taking around 20-40% of the total expense. Anyway they can capitalise the cost according to their license expiry which is 2028. The problem now is how are they going to raise the money? perpetual again?

(25-04-2012, 03:58 PM)shanrui_91 Wrote: indeed, the $200 million contract for signalling is a new contract while the resleepering is going to take up a major part of the $900m too since it will last until 2019. LTA should be taking around 20-40% of the total expense. Anyway they can capitalise the cost according to their license expiry which is 2028. The problem now is how are they going to raise the money? perpetual again?

Is cost-sharing % of LTA been announced? In fact, i am waiting for it before i proceed further to access the impact.

Anyway, the 900 Mils is either sharing by LTA or by commuters with highly fare.

Yes, it is logical for SMRT to capitalise the expense till 2028. Future expense will increase due to higher depreciation expense, and probably higher staff/R&M expenses with more stringent inspection cycle and part replacement requirement

why must it be shared by either LTA or commuters? why can SMRT not offset the expense with its own profit?

it is not like SMRT is making a loss from its train service.

(25-04-2012, 03:58 PM)shanrui_91 Wrote: Anyway they can capitalise the cost according to their license expiry which is 2028.

Personally, I don't think they can capitalise the cost till 2028. That is 16 years in total. Can they justify that the economic life of whatever they are planning to do with the $900 million can last for 16 years? Based on such heavy usage of trains service, I would think most likely 10 years is the max, but of course I am making all these assumptions as a layman.

I will consider buying the shares again if the dividends yield is close to 5%. And I believe the DPS will reduce quite a bit, that means the shares price will have to drop quite a lot from current level to be attractive to me again

http://app.lta.gov.sg/corp_press_content...u8381p6o95

LTA has already forked out $370m to procure for 34 trains (yes, train is very cheap $10m can be used for 25 years). As they cannot raise train and bus fare now, the government needs to subsidize them indirectly.

Seriously, they should just nationalize it and there won't be anything like listed co needs to earn money. Competition is useless here as even if SMRT gives you the lousiest service, you cannot choose to take NEL to go from Jurong East to Yishun. They earn money by giving you the lousiest service as there is no alternative route. And if they compete for the same route, they will suffer losses for sure. Is the government trying to say that if they run it, there will not be competition and the government will give you lousy services?

They are allowed to capitalise till 2028 as these are long-term maintenance that has never been carried out since the start of MRT line. I don't think they will be doing a resleepring, changing of claw and signalling system every 10 years. 900 millions can get you 800 buses for 4+ years

(25-04-2012, 04:48 PM)shanrui_91 Wrote: http://app.lta.gov.sg/corp_press_content...u8381p6o95

LTA has already forked out $370m to procure for 34 trains (yes, train is very cheap $10m can be used for 25 years). As they cannot raise train and bus fare now, the government needs to subsidize them indirectly.

Seriously, they should just nationalize it and there won't be anything like listed co needs to earn money. Competition is useless here as even if SMRT gives you the lousiest service, you cannot choose to take NEL to go from Jurong East to Yishun. They earn money by giving you the lousiest service as there is no alternative route. And if they compete for the same route, they will suffer losses for sure

too many complaints to LTA, the government will be nervous. and boss of SMRT also need to answer not just to shareholders.

They would like to raise fare, but due to many negative news and poor services of MRT, it is unlikely they will do so.

(25-04-2012, 04:29 PM)freedom Wrote: why must it be shared by either LTA or commuters? why can SMRT not offset the expense with its own profit?

It is SMRT management interest (it is also the shareholder interest) to request co-sponsorship of the un-plan expenses. SMRT management is accountable to shareholder. Shareholders will not happy if SMRT management decided to offset the full expense with its own profit, without a final verdict that SMRT should bear full responsibility of the faults.

My 2 cts

(25-04-2012, 04:56 PM)CityFarmer Wrote:

(25-04-2012, 04:29 PM)freedom Wrote: why must it be shared by either LTA or commuters? why can SMRT not offset the expense with its own profit?

It is SMRT management interest (it is also the shareholder interest) to request co-sponsorship of the un-plan expenses. SMRT management is accountable to shareholder. Shareholders will not happy if SMRT management decided to offset the full expense with its own profit, without a final verdict that SMRT should bear full responsibility of the faults.

My 2 cts

so the public should just be okay with years' profit from low maintenance? anyway, better to wait for the final judgement about the whole saga to have a better understanding.

but the SMRT service really is getting worse and worse. not just EW, NS lines, but circle line.