The Singapore government’s Land Transport Authority and private public transport operator SMRT are not budging in their negotiations over a proposed new rail financing model introduced 15 months ago in March 2014.

According to a report by investor group Macquarie, the dispute was caused by “a stark disparity” in expectations of the price of asset buybacks. SMRT want to buy back the assets like existing rail way lines at its book value including depreciation. The LTA wishes the buybacks take into SMRT’s future financial obligations into account, and is also complaining that the SMRT is only paying a small nominal fee to the Government while SMRT makes aplenty of profits by renting out retail spaces at the train stations.

Photo of SMRT train from vrzone
Photo of SMRT train from vrzone

Macquarie Group said that they expect the two to continue fighting and arriving to a conclusion only in 2018 and 2019:

“We were hopeful a conclusion would have been reached over the last 15 months, but differences in expectations from both sides of the table has led to delays.Taking cues from the bus model transition timeline, which will take roughly 2 years from initial early 2014 announcement, we expect any implementation of the new rail model to occur only in 2018/19.”