Singapore Said to Move Subway Operator SMRT to Asset-Light Model

Singapore will propose moving SMRT Corp., the city-state’s biggest subway operator, toward an asset-light business strategy, people with knowledge of the matter said. 

The government plans to announce a new structure for the Singapore rail system as soon as Friday, according to the people, who asked not to be identified as the information is private. The new model will allow SMRT to focus on operating and maintaining subway trains, one of the people said. Singapore has been studying options including having SMRT sell its trains to the government, people with knowledge of the matter said in December. 

SMRT, which has a market value of S$2.4 billion ($1.8 billion), has faced public criticism for service disruptions in the past four years even as it expanded its network. Singapore Transport Minister Khaw Boon Wan appointed an engineering specialist last October to advise on rail transformation and said the government was discussing changes in the industry structure to bring about “better alignment of incentives.”

Any sale of SMRT’s trains would follow a similar restructuring announced for the city-state’s public bus system in 2014. Singapore will own all bus infrastructure, such as depots and vehicles, while bus operators will bid for the right to run services on routes laid out by the Land Transport Authority. 

Shares of SMRT were suspended from trading in Singapore earlier Friday, pending an announcement. “We will share further details via appropriate channels later today,” Patrick Nathan, SMRT’s vice president of corporate information and communications, said in an e-mailed statement.

Representatives for Singapore’s Land Transport Authority, which regulates train and bus operators, didn’t immediately answer phone calls and e-mails seeking comment. A spokeswoman for Singapore’s Ministry of Transport said she couldn’t immediately comment.