Both rail operators here are expected to face heavier fines after a bill was passed on Parliament yesterday. Under the new bill, the capped maximum penalty will be replaced by 10 percent of the annual fare revenue of a rail line or $1 million - whichever is higher.
Transport Minister, Lui Tuck Yew, said in parliament during the debate on the Rapid Transit Systems (Amendment) Bill yesterday that the stiffer fines will play a greater deterrence and would better reflect the seriousness of incidents and its impact on the commuters.
According to National University of Singapore (NUS) Transport Researcher, Lee Der Horng, the new cap is very significant. He explained to the local paper that the $1 million fine passed to SMRT for two major events in December 2011 was insufficient to make passengers feel justice was served.
The Straits Times estimates SMRT could be slapped with a fine as much as $49 million for a large scale service disruption in the future.
Based on its last financial year ending March 31st, 2013, where SMRT earned $607.9 million from its three MRT lines. There were no breakdown on each line's revenue and the North-South and East-West lines are considered as one system. The Circle Line's ridership is about 19.3 percent of the total, and the local paper estimated revenue contribution to be around 20 percent.
Thus the combined North-South and East-West lines revenue amounts to about $490 million - which would result to a massive $49 million fine for a large-scale breakdown. Similarly, SBS Transit could face a fine of up to $12 million if it is faced with a large scale disruption on the North-East Line.
However, Non-Constituency MP, Gerald Giam, raised concerns the higher fine would indirectly contribute to fare increases. But the Transport Minister replied the fare formula does not include penalties paid by the operators, and this will continue in future.
Additionally, the bill also gave the Land Transport Authority (LTA) power to ask the two operators to strengthen its board of directors, including having enough engineering expertise and to fulfil their main roles as a public rail transport operator.
When the MPs enquired about the lack of provision for LTA to cut bonuses or sack senior management if standards are not met, Mr. Lui responded," I am less interested in heads rolling. I am more interested in heads fixed on and focused on identifying as well as resolving the problems. Whether the CEO should be removed or not, I'll leave it to the board."
