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Letter to Straits Times: Temasek supports SMRT on rail system renewal

5 December 2017

We note recent commentaries on SMRT, including some useful observations by Christopher Tan in his opinion piece, Lessons for MRT from the NY subway.

He noted, “there is no reason why our MRT cannot be among the best – if not the best – in the world”. 

We agree.

Temasek took ownership of SMRT in 1987, just as it started operations with five stations over six kilometres of track, between Toa Payoh and Yio Chu Kang. 

Many SMRT staff still remember with pride their role in its inaugural service.

Temasek listed SMRT 13 years later, in July 2000. 

Now 30 years old, SMRT operates 106 stations over 148 kilometres, with 2 million commuter trips daily. 

One key reason Temasek took SMRT private in October 2016 was our assessment that SMRT needs to prioritise renewal of a fast-ageing system, and complex upgrades like re-signalling, and win back the trust and confidence of the commuting public.  

The New York Times article referenced by Christopher Tan, had noted that the “Mean distance between failure … has worsened almost every year since 2010” for the NY subway. 

This engineering reliability measure is the first critical indicator of system health. SMRT is rightly monitoring and aiming high on this.

SMRT has successfully completed its multi-year sleeper and power rail renewals. These are the first of over 100 renewal projects, big and small, to be done for systems over 30 years old, to improve reliability.

Renewals are not just about replacing end-of-life systems. They are precious opportunities to re-examine and re-design for better system reliability, maintainability and availability.

It takes time to plan and execute renewals, and upgrade safely and sustainably. We seek public understanding, government and regulatory support, and SMRT commitment, to do these well.   

Christopher Tan also mentioned dividends from SMRT to shareholders. 

Since IPO, Temasek has paid SMRT-related dividends to our own shareholder. We also paid over S$1 billion, to some 50,000 minority shareholders, to take SMRT private. These payouts total more than the dividends Temasek had received from SMRT since its IPO, including the S$540 million special dividend declared prior. 

As a shareholder and steward, we want SMRT to be viable, both financially and structurally.

Taking SMRT private is part of our journey to support SMRT in its focus to be among the very best in the world, through operational and engineering excellence.

 

Juliet Teo
Head, Transportation & Logistics
Temasek

 

 

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TEMASEK REVIEW 2017

TEMASEK REVIEW 2017

Investment Themes

Investment Themes

Our investment activities continue to be guided by four investment themes and the long term trends they represent.