SMRT will still shoulder significant risks, says its CEO
Mr Kuek at the press conference last evening after LTA announced that it will take over all of SMRT's operating assets to free the rail operator to focus on improving its service levels. On his left is group chief financial officer Manfred Seah.
Published 6 hours ago
Karamjit Kaur Senior Correspondent and Marissa Lee
While the new rail financing framework means that SMRT gets some protection in terms of fare revenue and profitability, the company will still be shouldering "significant risks", said the operator's president and group chief executive officer, Mr Desmond Kuek.
"We are still not in control of fares and we don't have all the visibility over ridership going forward or the impact that new lines will have on our existing lines in terms of ridership and the total revenue that might be collectible under our existing lines...
"There continues to be significant risks for us which we have very little control over," he said.
For investors, the news will likely come as a relief from the growing uncertainty of SMRT's finances. SMRT itself admitted yesterday that the current model is an "unsustainable" one.
Noted DBS Equity Research senior vice-president Andy Sim yesterday: "(With SMRT) released from capital expenditure, which is a positive... this will lead to more stable financials going forward."
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