SINGAPORE – The costs associated with a

major six-day disruption on the East-West Line (EWL

) in September 2024 have weighed on the finances of rail operator SMRT Trains, which posted a 21 per cent decline in earnings and an 8 per cent dip in profit in the most recent financial year.

SMRT said on July 31 that its trains division turned a $6.9 million profit after tax in the 12 months ending on March 31, 2025, representing a net profit margin of 0.75 per cent.

This is down from $7.5 million in profit after tax during the previous financial year, which translated to a net margin of 0.85 per cent.

SMRT, a wholly owned subsidiary of state investment company Temasek, said revenue from its rail operations rose 4 per cent to $918.2 million in the 2024/25 financial year, up from $886.7 million before.

This came on the back of higher average fares, which were

hiked in December 2024

by 6 per cent, as well as increased ridership on the four MRT lines and one LRT line that it operates.

But revenue growth was negatively impacted by a loss in income due to the EWL breakdown in 2024, which affected one in six train trips daily from Sept 25 to 30 that year.

For the six days of disruption, SMRT Trains provided free travel to passengers alighting at Jurong East and Buona Vista stations.

The rail operator was also hit by the expenses it incurred to provide free bridging bus and shuttle services , as well as to repair extensive damage caused to 2.55km of track and trackside equipment.

It was reported that the total cost borne by SMRT exceeded $10 million. This includes the $2.4 million fine that was levied by the Land Transport Authority (LTA) as a penalty for the service disruption.

As a result, SMRT Trains’ earnings before interest and tax slid to $4.9 million in FY24/25, down from $6.2 million before, the operator noted. Profit was boosted by higher interest income.

Another silver lining was the more than $165 million in savings that SMRT was able to accrue from ground-up staff initiatives to improve productivity and safety.

The company said these savings helped to ease the financial pressure.

For instance, it was able to save $50 million in electricity costs through initiatives like optimising train energy use using data analytics, though this was offset by higher repair and maintenance costs, said SMRT chairman Seah Moon Ming.

LTA’s investigations into the 2024 EWL disruption, which involved a faulty part on a 37-year-old first-generation Kawasaki Heavy Industries (KHI) train, found that SMRT had extended the interval between overhauls without a detailed engineering and risk assessment.

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However, LTA did not review the extension either, and did not require SMRT to seek its approval.

SMRT, meanwhile, has cited repeated delays to the

delivery of new replacement trains

that would have allowed it to retire the faulty train earlier.

The new trains were ordered by LTA in 2018, two years after the authority took over ownership of SMRT’s rail assets under a revised financing model. They were meant to arrive from 2021 in time for the KHI trains to be decommissioned, but were delivered only from 2023 onwards.

SMRT said it decided to overhaul the first-generation KHI trains as a result of these delays, but it pointed to challenges in procuring spare parts due to global supply chain disruptions during the Covid-19 pandemic.

These factors were why LTA lowered

the fine that SMRT will pay to the Public Transport Fund

as a penalty for the September 2024 incident, to $2.4 million from $3 million. This was after SMRT made its final representations on the matter.

SMRT said on July 31 that the 2024 EWL breakdown has prompted “deeper reflections” on the challenges of operating rail assets beyond their intended lifespan.

Noting that MRT trains in Singapore are designed to be operated for 30 years, it called for stronger frameworks to manage an ageing fleet of trains.

It suggested that LTA issue a formal certificate to train operators confirming that such trains are safe to use beyond their designed lifespans. This is already being done for new trains before they enter service.

“If there was a tighter coordination across all the stakeholders... I think the September 2024 incident could have been prevented,” said SMRT group chief executive Ngien Hoon Ping, who was a former LTA head.

“We need robust, forward-looking, lifecycle planning, clear roles and responsibilities, and much tighter cross-agency collaboration going forward. Because if you don’t learn the right lesson... it could happen again,” he added. 

SMRT said it also plans to deepen direct engagements with equipment manufacturers , pointing to its partnership with French train maker Alstom to accelerate the testing of new EWL and North-South Line (NSL) trains being delivered .

“This proactive approach allows potential reliability and interoperability issues to be resolved ahead of full deployment. We remain on track to retire all first-generation KHI trains by end-September 2025,” the operator added.

There are 13 KHI trains still operating, and they are used only during weekday peak hours.

In November, SMRT will complete a project dubbed Depot 4.0 to upgrade the 39-year-old Bishan Depot, which will double the depot’s train overhaul capacity from two trains to four trains per month.

Two years after the first Alstom Movia R151 train (pictured) was deployed on the North-South and East-West lines (NSEWL) in 2023, 61 of the latest seventh-generation MRT trains have now entered service.

PHOTO: ST FILE

This joint initiative with CRRC Qingdao Sifang will tap the Chinese train manufacturer’s expertise, and leverage automation and digital solutions to improve maintenance quality.

CRRC Qingdao Sifang has already produced trains for the North-South and East-West lines (NSEWL) and the Thomson-East Coast Line in a joint venture with KHI, and it will supply trains for the upcoming Cross Island Line.

SMRT added: “Depot 4.0 will serve as a model for designing future depots and renewing existing ones, helping to future-proof our train depots against growing demands.”

In a joint message on July 31, Mr Seah and Mr Ngien also flagged the need for SMRT to diversify into new business areas.

“MRT fares in Singapore are one of the lowest in the world, while operational costs continue to rise,” they said.

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In 2024, SMRT restructured its businesses into two pillars: the public transport business comprising SMRT Trains and SMRT Buses; and the “non-fare” businesses comprising Strides, which offers engineering, digital and mobility services, and Stellar Lifestyle, which manages retail and advertising spaces.

Strides has since secured a six-year contract to provide transport services to the Elections Department, and the vehicle maintenance arm of taxi operator Strides Premier has inked deals with the likes of Changi Airport Group and the Republic of Singapore Air Force to service their fleets.

An entity called Strides Technologies has also been created to tap the company’s engineering nous to sell “next-generation” rail solutions to the wider industry , including internationally. One example is its Project Overwatch initiative, which uses artificial intelligence (AI) to monitor train services.

With the Ministry of Transport (MOT) set to make a major push to deploy autonomous vehicles (AVs) to strengthen the public transport network, SMRT said it has actively advanced its expertise in the field and trained selected bus drivers to have the relevant operational skills.

The company said its 2022 investment in self-driving technology company WeRide supports a broader strategy to implement AV shuttles in Singapore.

SMRT is exploring launching shuttle services with an AV manufacturer by early 2026.