The pros and cons of more MRT lines in Singapore

CIMB warns of lower average fares due to shorter distances travelled as commuters make more transfers.

According to CIMB, rail has been gaining popularity as a mode of transport, with the proportion of residents relying on MRT having jumped from 24% in 2000 to 31% in 2010. The government plans to extend this rail network further. Upcoming lines include the Downtown Line, which has been awarded to ComfortDelGro’s subsidiary SBS Transit, and Thomson Line, which has not yet been tendered. New lines will be awarded under the new rail-financing framework.

Here's more from CIMB:

Positives:
- Ridership boost in the long term. A more comprehensive and extensive rail network will encourage the population to switch from private to public transport.
- More opportunities for rental and advertising, the high-margin businesses.

Negatives:
- Lower average fares, due to shorter distances travelled as commuters make more transfers.
- Short-term drags on profits. Operators will incur start-up losses in the initial years before ridership gains traction. Hiring, training and utility costs are usually incurred ahead of ridership growth. The Northeast Line took three years to break even, while the Circle Line remains loss-making after two years of operation.