SMRT

[freedom]

The biggest gap, I guess, is the valuation model. The government probably prefers book value. But there is no way that SMRT agrees that. SMRT probably prefers replacement cost or operational model. Though SMRT originally bought the assets from the government at book value, it is obvious that the assets are worth much more after so many years. For example, the cars. Many of the old cars are of little value on the book, but they can continue to run for another 5 years. It might not be worth of a new car, but could well fetch half of the value of a new car.

There is no point of talking about obligations. Whatever the obligations is, if SMRT were to bear the cost, it would sell it to the government at least at book value. Therefore, SMRT will increase it's asking price by the same amount. We are not talking about the government taking over SMRT, but the operating assets. SMRT's obligations has little bearings on the talk.