(Oct 30): Desmond Kuek, CEO of SMRT Corp, worked hard last year to persuade shareholders of the company to accept an offer from Temasek Holdings to take the company private via a scheme of arrangement. SMRT’s business, he said, needed a restructuring that was best done away from the glare of the public market. “The privatisation allows an environment where this can be focused on much more decisively and allows us to bring about those changes in a more determined way, without the short-term pressures of earnings expectations,” Kuek said in an interview with The Edge Singapore in September last year.

Days before the scheme of arrangement was unveiled, SMRT had also announced the transition of its rail business to a new rail financing framework. The NRFF mitigates the revenue and earnings risk for SMRT, through a risk-sharing mechanism with the Land Transport Authority. However, LTA’s sharing of the downside risk is limited. At the same time, the NRFF caps SMRT’s earnings potential from the rail business. Together, the introduction of the NRFF and the privatisation of SMRT were supposed to be good for commuters as well as investors. As it happened, shareholders of SMRT accepted the offer from Temasek, and the company was taken private on Oct 31.

Almost exactly one year on, a host of statistics suggest that SMRT’s rail reliability is good and getting better. Its train service availability, measured as a percentage of trains that operate on schedule, is 99.6%. The international average is 98%. Other facilities, such as ticketing machines and escalators, function at or near 100%. On the North-South and East-West lines, the average number of delays exceeding five minutes has fallen to 0.33 per 100,000km travelled, for the first eight months of this year. In 2011, that figure was 1.8. The number of trains that had to be taken out of service has fallen from 3.32 per 100,000km in 2012, to 1.42 at the last count. The number of disruptions lasting over 30 minutes has fallen from nine last year to two on each line in the first eight months of this year. These numbers do not take into account weather and signalling-test-related delays.

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