Debated in Parliament on 7 Jul 2014.
Mr Gerald Giam Yean Song asked the Minister for Transport (a) whether there is apportionment of costs between SMRT and LTA for the $900 million rail asset renewal plan announced by SMRT in 2012; (b) if so, what is the apportionment of the costs between SMRT and LTA and the basis for the apportionment; and (c) how will the asset renewal plan be affected by the Rail Financing Model proposal submitted by SMRT.
Under the current licensing and financing framework, SMRT is responsible for procuring operating assets, such as trains and the signalling system, to meet projected ridership. When replacing such assets, SMRT can apply for a Replacement Grant to cover the cost of inflation for such operating assets. For infrastructural assets, which include permanent structural elements, such as viaducts and tunnels, SMRT can request LTA to fund major replacement or renewal of such assets that have reached the end of their useful lives.
These principles guide the apportionment of the $900 million asset renewal plan for the North-South-East-West Line, which comprises two main projects the replacement of
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sleepers and the upgrading of the signalling system.
The Government is funding the replacement of sleepers as these are considered infrastructural assets. The total cost for the project will be determined after the contracts for the various phases of re-sleepering have been progressively awarded over the next few years.
SMRT will fund the replacement of the signalling system as it is an operating asset. SMRT has applied for a Replacement Grant and LTA is currently assessing the application.
The asset renewal projects are not affected by the Rail Financing Model proposal submitted by SMRT. Discussions between SMRT and LTA on the proposal are ongoing and they have not reached any agreement nor are they close and, unless and until they do reach agreement, we will continue to work on the basis of the current financing framework.
PAPERCUTS