The amount that SMRT may be fined for the massive MRT breakdown on Tuesday may be closer to 1 to 2 million Singapore dollars, as opposed to the exaggerated $50 million reported by most news agencies.
In the disastrous breakdown on Tuesday evening rush hour, over 87 stations along the North-South and East-West lines were taken down by a power fault. Over 250,000 commuters were left stranded without transportation home, while roads and expressways became clogged up with free shuttle buses and other public transport which rushed in to satisfy the demand for home-bound transport.
Parliament passed a bill in February last year which would allow the government to impose a fine equivalent to 10% of the railway operator’s annual fare revenue for the lines that broke down. This was an exponential increase from the previous fine limit, which was capped at a maximum of $1 million.
SMRT’s revenue amounted to S$644 million for its entire North-South and East-West Lines, as well as the Circle Line, which means that the authorities have the option to impose a maximum fine of S$64.4 million.
“(Seeing as) the latest service disruptions did not affect the Circle Line, we reckon that the maximum fine for this incident could be closer to S$50 million,” wrote Mr Heng, a Maybank financial analyst. “While the actual fine may be much lower than the maximum possible, it nonetheless poses risks to our forecasts.”
An analyst who declined to be identified said that the potential maximum fine of S$50 million is not “sustainable” given that it amounts to nearly half of SMRT’s net profit for the full year ended March, and estimated that the actual fine would likely be closer to S$1 million. He added that Parliament most likely passed the 10% maximum figure to provide assurance that it takes rail reliability seriously.