Mypaper.sg, 22 May 2014
The shift to a government contracting model in public bus operations will be a welcome move for SBS Transit and SMRT, which have, for several years, suffered losses in the business, said experts.
Under the existing privatised model, both operators have struggled with the sustainability of their bus operations. While fare increases are regulated by the Government, operators have faced escalating capital and operating expenses.
DBS Bank equities analyst Andy Sim said both SMRT and SBS Transit will benefit, as the losses they are seeing now will be erased when the new government contracting model is implemented in 2016.
"They will be able to cut down on capital expenditure, and the balance sheet will not be so strained," Mr Sim added. Full story