2 big things that could hit Singapore's train system off the rail

Progress has been sluggish.

According to Maybank Kim Eng, the new rail financing (NRF) framework, introduced in 2010, is designed to give the Land Transport Authority (LTA) better control over the timing of capacity expansion for the rail network. 

Currently, only the Downtown Line (DTL) is on the NRF, although all other rail lines are expected to eventually transit to a similar model.

Here's more from Maybank Kim Eng:

But progress has been slow, perhaps due to the complicated process of unwinding contractual agreements under the old regime.

The treatment of rail assets owned and asset purchase obligations of the operators are the key obstacles to the transition, in our view.

Other than the operating assets of the North South East West Line (NSEWL), which are owned by SMRT, all other rail assets are currently held on LTA’s balance sheet. Under the old regime, rail operators are required to purchase them from the LTA in the future.

Over the years, as the rail network expanded, the value of the train fleet and operating equipment on LTA’s balance sheet similarly increased.

Assuming that 70-100% of the operating equipment is related to rail operations, we estimate that LTA holds SGD2.4–3.1b worth of rail assets on its balance sheet as of 31 Mar 2013.

In the absence of detailed disclosures, we estimate that more than half of these purchase obligations are due to Circle Line (CCL) related assets. Unlike other rail lines that were in operation more than a decade ago, the CCL was only fully opened from October 2011.