SMRT

[Ben]

I think it will be difficult for LTA to buy over SMRT retail assets. LTA will need justification to raise additional funds; and SMRT will not be wiling to part with them cheap.

I don’t think LTA or any stat board will be interested to run a retail business. They don’t have the necessary expertise to do it. Besides, it is not LTA mandate to run a retail business. They will have to face questions in parliament if ever they were to go in that direction. So, IMO, SMRT will continue to own and run the retail assets until its licence expire and the line open up for tender. And whoever fighting for the licences in future will need to take into account the retail business as a total package.

Nobody knows what the outcome of the discussion of the new rail framework will be. My guess is that they will eventually reach a compromise on the value of the rail assets to be transferred, and SMRT to keep the retail assets and continue to run/profit from it. It is like a “compensation” to them for losing out on fare revenue (fare increases way below entitlement) all these years. After the expiry of its operating licence, everything restart all over again and they have to complete with other interested PTOs, taking into account the contribution from retail business. Just my opinion.