02-02-2012, 08:13 AM
Why is LTA paying for the trains with taxpayers' money and SMRT reaps the profits????
02-02-2012, 08:13 AM
Why is LTA paying for the trains with taxpayers' money and SMRT reaps the profits????
02-02-2012, 08:15 AM
(01-02-2012, 10:50 PM)weijian Wrote: It looks like LTA is paying the bill for the new trains for NEL/CL and Tuas West Extension, but SMRT has to pay for its own trains and signalling system at its NSEW lines... New financing framework from DTL onwards, LTA Appoints SBS Transit Limited to Operate Downtown Line under New Rail Financing Framework Extracts, 7. The appointed DTL operator, SBS Transit Limited will pay an annual License Charge. This will apply over the 19-year license period. This payment is expected to reach an estimated total of $1.6 billion at the end of the 19 years. Key Features of the New Rail Financing Framework Basically, it's not "free trains" from LTA, but rather, the operator would be paying a new license fee to LTA, who'd mainatain a sinking fund for such CAPEX.
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
02-02-2012, 05:47 PM
hi KopiKat,
Yeah i knew that. But check out below..it only started in 2010, shouldnt be applicable for CCL and NEL. Key Features of the New Rail Financing Framework The new rail financing framework was put in place in 2010 to achieve the objectives stated in the Land Transport Master Plan (LTMP). The objectives are to (a) facilitate the future expansion of the Rapid Transit System (RTS) network in a financially sustainable manner; and (b) inject greater contestability into the rail industry.
02-02-2012, 10:14 PM
(02-02-2012, 05:47 PM)weijian Wrote: hi KopiKat, You are right! But I doubt that LTA is giving the new trains to the licensees for free. I suspect LTA must have set up a new framework for existing licensee (prior to the 2010 Amendment Bill) to ensure continuity (Section 16A), but I couldn't find any useful info.
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------ (02-02-2012, 10:14 PM)KopiKat Wrote:(02-02-2012, 05:47 PM)weijian Wrote: hi KopiKat, Finally found something. From SMRT FY11 AR, pg 76, The Licence to operate the Circle Line (“CCL Licence”) is for an initial period of 10 years from 4 May 2009 at an annual licence fee calculated at 0.5% of the gross annual fare revenue and 0.5% of the gross annual non-fare revenue, unless modified by LTA in accordance with the provisions contained in the Rapid Transit Systems Act. At least 12 months prior to the expiry of the CCL Licence, SMRT Trains may request LTA to extend the CCL Licence for a further 30 years, which is subject to LTA’s discretion and such other terms and conditions as LTA may impose. SMRT Trains is obliged to purchase the operating assets of the CCL on 4 May 2019, based on the net book value recorded in LTA’s audited accounts with depreciation charged on a straight line basis over the useful lifespan of the operating assets. These assets include trains, permanent way vehicles, power supply equipment and cabling, supervisory control system, escalators and lifts, platform screen doors, environmental control system, signalling system, communication system, automatic fare collection system and depot equipment. The infrastructure of the Circle Line MRT system, which includes tunnels, tracks and station structures, remains the property of LTA and is leased to SMRT Trains at a nominal annual fee. SMRT Trains is required to repair and maintain the infrastructure as stipulated in a separate lease and maintenance agreement. The salient terms and conditions of the CCL Licence are stated under the Licence and Operating Agreements section in the Notes to the Financial Statements. Look at the figure on that page. Easier to understand. Extract (Click on pix below),
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
11-02-2012, 09:05 AM
hi Kopicat,
Thanks for getting out the search. Just some additional information i got from SMRT IR: Under the existing framework, the Government funds the one-off capital outlay for rail infrastructure, such as the stations, tunnels and viaducts, and the first set of operating assets, which includes trains and signaling systems. The PTOs are responsible for operating and maintaining the system as well as funding the replacement of existing operating assets and procuring additional operating assets needed for higher ridership growth. This framework of co-financing between the government and operations have helped to keep systems costs low for commuters. With the signaling system for the NSEW lines in place since 1987, SMRT has undertake to upgrade the system to address technical obsolescence and support a shorter operating headway. The Tuas West Extension, on the other hand, is a new extension where the Government is responsible for the first set of signaling system. - Taken from 8 February 2012, Today Newspaper, Ms Helen Lim, Director, Media Relations and Public Education, LTA -This explains why SMRT is paying for 17 new trains and signalling system for NSEW lines. -In another seperate thread, i had questioned the stagnant CCL's ridership of 300k in 2Q and 3Q. The answer from IR was it was due to 'round off effects' and more importantly, seasonal factors like 'school holidays'. -In light of higher maintenance costs, they had replied expected breakeven costs for CCL to be 400k now (raised from 350k previously)
Good search work by Kopicat. Appreciate that.
12-02-2012, 11:47 AM
PAPAYA has said something like: "SMRT will not survive if it does't make money every year."
What do you people think? Will PAPAYA allow SMRT to be in the RED in one of the future years? If it happens, i will be very afraid.
WB:-
1) Rule # 1, do not lose money. 2) Rule # 2, refer to # 1. 3) Not until you can manage your emotions, you can manage your money. Truism of Investments. A) Buying a security is buying RISK not Return B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return. NB:- My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
12-02-2012, 12:23 PM
(12-02-2012, 11:47 AM)Temperament Wrote: PAPAYA has said something like: "SMRT will not survive if it does't make money every year."PAPAYA always think pp are stupid. Of course SMRT must make money every year. But the question should be, must SMRT make INCREASING profit every year.
12-02-2012, 04:43 PM
PAPAYA will still think some of the people are stupid(maybe the famous last 60% of the last election), but hey! PAPAYA have lost one GRC. If they are not careful they will lose more in 2016. At least 40 % of the people are not.
WB:-
1) Rule # 1, do not lose money. 2) Rule # 2, refer to # 1. 3) Not until you can manage your emotions, you can manage your money. Truism of Investments. A) Buying a security is buying RISK not Return B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return. NB:- My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore. |
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