What's delaying Singapore's new rail financing model?

No progress has been made for 15 months.

The proposed new rail financing model has been gathering dust for over a year, with negotiations stalled by disagreements between the Land Transport Authority and rail operator SMRT.

According to a report by Macquarie, the delay was caused by "a stark disparity" in expectations of the price of asset buy backs.

SMRT wants the buybacks to take place at the assets' book value including relevant depreciation, while the LTA is also taking SMRT's future financial obligations into account.

The fact that SMRT also continues to reap a sizable profit from renting spaces out at train stations whilst paying only a nominal amount to the government is also exacerbating the delay, the report noted.

“We were hopeful a conclusion would have been reached over the last 15 months, but differences in expectations from both sides of the table has led to delays.Taking cues from the bus model transition timeline, which will take roughly 2 years from initial early 2014 announcement, we expect any implementation of the new rail model to occur only in 2018/19,” Macquarie said.