SINGAPORE: Land Transport Authority announced on February 14 that it had concluded discussions with SBS Transit for implementation of the government’s New Rail Financing Framework model on the North East Line and the Sengkang and Punggol peoplemovers. This completes the 10-year transition of the island’s entire rail network to the new framework.
SBS Transit will transfer the ownership of its operating assets to LTA on March 31 for a net book value of S$28·8m. In return, SBS will be granted a licence to operate the lines from April 1 until March 31 2033. SBS will then pay LTA a licence charge to be set aside in the Railway Sinking Fund to finance the renewal of operating assets.
LTA will pay for the assets in tranches over the next two years: 60% is to be paid on the date of transition, and the remaining 40% in two equal instalments on the next two anniversaries of the transition. LTA is to undertake a survey of asset conditions, after which SBS must provide warranties on their condition over the two-year period. LTA will beentitled to withhold payments for assets requiring rectification or replacement.
The New Rail Financing Framework was announced by the government in 2008 and initially implemented in 2011 for the Downtown Line, which is operated by SBS Transit. In July 2016 LTA reached agreement with SMRT for the transfer of the North-South and East-West metro lines, the Circle Line and the Bukit Panjang LRT.