Photo of SMRT train from Asian Nikkei

According to an announcement by the Land Transport Authority (LTA) yesterday (Sep 15), public transport operator SMRT have won the new Thomson-East Coast Line’s (TEL) operating contract by being 30% cheaper at S$1.7 billion.

The tender of the 31 MRT stations in the new line is open to only government-linked companies SMRT and SBS Transit – both owned by Singapore’s sovereign wealth fund company Temasek Holdings.

LTA claimed that SMRT have better quality than SBS Transit, but did not explain how because SMRT-operated train lines have higher train disruption frequency than SBS-operated train lines.

According to LTA, SMRT promised to charge lesser if they are unable to perform:

“SMRT Trains also undertook a set of contractual guarantees in the form of service fee deductions should key obligations not be met.”

The “operations-only” tender is part of the new legalised corruption scheme called a “contracting model”, where expensive physical assets and maintenance are paid for by Singaporean taxes while the lucrative portion of human resources and operations are reserved for the state-owned companies, both of which are under Temasek Holdings managed by the Prime Minister’s wife Ho Ching. Profits are guaranteed in the “contracting model”, which in turn contribute to the profits of Temasek Holdings.