ComfortDelGro's train disruption to derail its maintenance expenses

The delay last August 17 will earn the LTA's scrutiny on the NEL's operation, warns Barclays.

According to a statement, the train service on the North East Line (NEL) has been delayed by an average of 20 to 50 minutes in both directions since the start of service last August 17.

This reminded Barclays of the train disruptions on SMRT's rail lines just few months ago.

"It is even more surprising that the disruption took place just few weeks after the Committee of Inquiry submmited its report on the SMRT train disruptions. The incident will very earn the LTA's scrutiny on the NEL's operations and may result in higher maintenance expenses for the company's rail operation, which should undermine the profit from the segment, in our opinion. We expect the rail operation to contribute 9% of the company's 2012 operating profit."