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SMRT fined record $5.4 million for July 7 breakdown

Rail operator SMRT Corp has been fined $5.4 million for the massive breakdown that crippled both the North-South and East-West lines on July 7.

The amount is the biggest penalty imposed on a rail operator, but substantially smaller than what analysts were expecting.

Maybank Kim Eng analyst Derrick Heng noted new regulations allowed the Government to impose a maximum fine of 10 per cent of a transport operator's annual fare revenue for an affected line.

SMRT's rail revenue for the 12 months ended March 31 stood at $644 million for the North-South, East-West and Circle lines. As the Circle Line was not affected, Mr Heng estimated that SMRT could be fined up to $50 million.

The previous record fine was $2 million, slapped on SMRT for the 2011 North-South Line disruptions on Dec 15 and Dec 17 that affected about 221,000 commuters combined.

The July 7 disruption - the biggest one in Singapore so far - affected some 413,000 commuters, many of whom reached home at midnight - some by walking.

It was caused by electrical power trips at multiple locations in the network. Investigations narrowed the root cause to salt deposits on one of the third-rail insulators near a tunnel leak between Tanjong Pagar and Raffles Place MRT stations.

"The leak, and inadequate maintenance, had resulted in extensive mineral deposits on the insulator and trackside equipment," the Land Transport Authority said in a press release on Wednesday.

"Laboratory tests found high chloride content in samples of the water seepage and in the deposits. The consultants deduced that the conductive mineral deposits, together with the wet tunnel environment, had significantly reduced the effectiveness of the insulator."

Observers pointed out that if the operator had identified and rectified the leak earlier, or had cleaned its surroundings - including the insulators - more thoroughly, the incident could have been avoided.

In the aftermath of Singapore's worst MRT breakdown, the LTA appointed a team of five experts from Parsons Brinkerhoff and Meidensha Corporation to identify the root cause of the power trips and propose improvements.

LTA chief executive Chew Men Leong said investigations found that the disruption was due to maintenance lapses by SMRT.

"LTA hence intends to impose a high financial penalty on SMRT in light of the seriousness of the incident, and given that several hundred thousands of train commuters, as well as motorists and bus commuters, were inconvenienced by this disruption," he said.

"We require SMRT to review and improve their maintenance regime to prevent future occurrences."

The LTA said it has asked SMRT to provide a detailed response and rectification programme to address the findings.

The operator has started replacing all third rail insulators since the incident, starting with those that have shown signs of electrical resistance weakness, it said.

More frequent audits will be conducted on the operators' maintenance regimes, the LTA added.

The $5.4 million fine will go to the Public Transport Fund, which pays for transport vouchers to help needy families.


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