The Minister for Transport (Mr Lui Tuck Yew): Mr Speaker, Sir, in January, I delivered a Ministerial Statement in this House on the service disruptions that took place along the North-South Line on 15 and 17 December 2011. More than 200,000 commuters were affected and the severity of the incidents was unprecedented.

A Committee of Inquiry (COI) was convened on 29 December, led by Chief District Judge Tan Siong Thye, with two other members, Prof Lim Mong King and Mr Soh Wai Wah. It was tasked to investigate the causes of the disruptions, as well as other factors that might have contributed to them. Based on the findings, the Committee would make recommendations to minimise the recurrence of similar incidents, and improve the management of such incidents.

The COI's report resulting from the inquiry was submitted to my Ministry on 3 July 2012. The report is comprehensive, detailing the Committee's findings and recommendations. These will be invaluable to on-going efforts to improve the reliability of our public transport system.

I want to put on record my deep appreciation for the Committee's hard work. The inquiry was demanding and challenging, given the technical nature of the issues. Prior to the start of public hearings, the Committee had to expend time and effort to equip itself with contextual and technical information in preparation for the inquiry. The public hearings started on 16 April, and lasted six weeks, concluding on 25 May. During this time, a total of 116 witnesses were called to the stand.

Apart from the Committee members, I must also thank the team that supported the Committee, including but not limited to its secretariat, resource persons, officers from the Attorney-General's Chambers, and investigators from the Criminal Investigation Department and the Air Accident Investigation Bureau. I also thank witnesses who testified at the inquiry, including expert witnesses, LTA and SMRT senior management and staff, as well as members of the public. Without them, the inquiry would not have been successfully completed.

I will first summarise the COI's key findings and recommendations, and then provide the Government's response. I will update Members on the measures that we have already taken, and further measures that we will take, to improve MRT reliability and incident management. While the COI found shortcomings in SMRT, LTA too fell short. I will also speak about the improvements that LTA must make, particularly with regard to how it regulates the public transport operators.

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Let me say here before I proceed any further, that my Ministry accepts the findings and recommendations of the COI.

As the media has reported extensively on the findings of the COI, I do not intend to dwell at length on them.

The COI assessed that the immediate cause of the stalling of the trains in both incidents was damage to their Current Collector Device (CCD) shoes, due to contact with a sagging third rail. The third rail, or power rail, runs along the MRT tracks and supplies electrical current to the running trains, which draw this power through the shoes mounted on the trains. During both incidents, sections of the third rail were found to have sagged and multiple claws dislodged. These claws are a key component of Third Rail Support Assemblies (TRSAs), which hold the third rail above the track.

The incident on 15 December was initiated by a defective fastener on one of the TRSAs. This caused the claw of that TRSA to dislodge and the third rail to sag. Although trains continued to pass the sag, it rendered the two adjacent TRSAs more vulnerable to vibration. Over time, these two TRSAs, which insulators were coincidentally also defective, failed gradually. By the evening of 15 December, the third rail sag had gone beyond the tolerance limits of the trains' shoes, damaging the CCD shoes on trains passing the incident site. Some trains stalled after passing the site as they were no longer able to draw sufficient power from the third rail. At the incident site, multiple trains impacting the sagging third rail eventually caused three more claws to dislodge, such that a stretch of the third rail came to rest on the track-bed. This segment of the track then became impassable to all trains.

The COI attributes the incident on 17 December to one, or possibly more, "rogue train(s)" that suffered CCD shoe damage when they passed the 15 December incident site as the third rail there was progressively sagging. The damaged shoes of these rogue trains destabilised the third rail system at other locations along the North-South Line on 16 December, causing one third rail claw on the south-bound track between Newton and Orchard stations to dislodge and the third rail to sag. On 17 December morning, there was a train, which was traced to Train 119, that made unusually forceful contact with the third rail at the incident site, causing an adjacent claw to also dislodge. And now, with two adjacent claws dislodged, the third rail sagged further, and caused damage to the CCD shoes of this Train 119 and the trains that passed after it. Some of these trains subsequently stalled as they were no longer able to draw sufficient power.

On incident management, the COI recognised the complex challenges that SMRT and LTA faced on the two days, given the trying and unprecedented circumstances. While commuter safety was not compromised, there were lapses and gaps in the management of the incidents. Individual SMRT staff generally did their best, but the overall incident response was skewed towards train safety and operational considerations, resulting in insufficient attention to the well-being of passengers in stalled trains and stations.

The COI's key conclusion is that the incidents were preventable, had adequate maintenance measures and checks been carried out. The COI found shortcomings in SMRT's maintenance work culture, and in its overall maintenance and monitoring regime. In particular, the COI agrees with the expert witnesses that the material defects in the fastener and insulators likely took time to develop before the 15 December incident. However, they were regrettably not identified and remedied by SMRT's maintenance efforts. After the first incident on 15 December, SMRT's checks, including the checks done after MRT operations the following night − so they had two night windows − failed to detect the damaged CCD shoes on the rogue trains and the third rail sag. This allowed the 17 December incident to take place.

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Sir, let me now bring the House through the COI's key recommendations to improve MRT reliability. Let me assure Members that we will follow through on all the recommendations. SMRT and LTA have already implemented or decided to implement many of the recommendations, while some others require further feasibility study. SMRT has given its initial response last week on how it is already improving its maintenance and monitoring regime and work processes. LTA, as the MRT regulator, will provide its detailed response later today.

The COI has made a number of recommendations specifically on the third rail system as this was the source of the problem in the December disruptions. We need to avoid a situation where we have two or more adjacent claw drops, as the third rail will then sag beyond the tolerance limit of the CCD shoes. This means that we must identify third rail sags and fix the sags in a timely manner. In this regard, SMRT has accepted the COI's recommendation to enhance the maintenance regime for the third rail system. Full maintenance requirements in the original MRTC maintenance manual, which includes annual TRSA inspections, will be implemented. Non-destructive tests such as ultrasound scanning have already been carried out at vulnerable stretches of the third rail, to pick out cracks on third rail joints. LTA and SMRT are reviewing the upgrading of SMRT's current Multi-Function Vehicle (MFV). The review will be completed by August this year, at which point SMRT will call for tender to upgrade the MFV. A new MFV will be acquired on top of this current MFV. In the meantime, the MFV that is deployed on the Circle Line will be redeployed for use also to the North-South and East-West Lines (NSEWL).

SMRT will explore capabilities to detect third rail sags via the installation of sensors on selected trains. Installation and testing of this mode are expected to begin by the end of this month. In addition, SMRT will study a camera-based system so that the third rail can be monitored on a real-time basis. As an interim measure, SMRT will implement stainless steel capping on TRSAs with cable ties at higher-risk areas such as high speed ramps of tight turn-outs. This will further reduce the likelihood of claw dislodgements.

The COI has also recommended that the design of the TRSAs be reviewed. Those in the older parts of the NSEWL are over 20 years old. There are now better and more robust designs which have more effective locking features. SMRT will undertake a change-out programme for the older TRSAs on the NSEWL. Fifth generation claws will be installed on the sections of Floating Slab Tracks (FST), where several of the dislodged claws were found in December. This will be completed by August. Thereafter, the current speed restrictions that we have imposed on these segments since the incidents last December will be progressively lifted. In addition, SMRT and LTA will continue to study plans to replace TRSAs for the rest of the network, and make a final recommendation on the type of TRSA that will be used before the end of the year.

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Specific train components also contributed to the December incidents, in particular, severe vibrations caused by wheel defects. SMRT will monitor the condition of train wheels through the use of a Wheel Impact Loading Detection (WILD) system which automatically picks up wheel defects. This system is already in place on the Circle Line today. It will be implemented on the compass lines by December. In addition, SMRT will procure additional wheel lathes for wheel re-profiling to rectify wheel defects. To monitor all this, LTA will require the MRT operators to introduce formal processes to track indicators and analyse faults, including the number of trains in queue for wheel profile works. LTA and SMRT will also study the COI's recommendations to improve the maintenance regime for CCD shoes, and to explore means to detect defective shoes.

Beyond recommendations for specific components, the COI has emphasised the need for SMRT to strive for maintenance excellence. SMRT has assured me that it will improve its maintenance and monitoring regime. I understand that it is already taking steps to enhance its engineering and maintenance capabilities and resources, and that it has put in place a more robust maintenance regime overall.

Let me move on to talk about the regulator. Sir, it is the responsibility of LTA as the regulator to hold the operator accountable for delivering a reliable system for commuters. LTA fell short in this regard. It must do better. LTA must re-look how it can better fulfil its duties as the regulator. It must work with and also supervise more closely the operator, and strengthen its regulatory framework.

Today, the oldest parts of the compass lines have been in operation for some 25 years. Given these ageing assets and the added strain of increased ridership, the quality and robustness of the maintenance regime, especially preventive maintenance, become even more critical. Rather than relying on a corrective approach to rectify problems, we must adopt a systems approach towards maintenance to pre-emptively identify potential areas of concern.

The operator and regulator will therefore need to work even closer than before, on key preventive maintenance and upgrading plans, starting with the NSEWL, but eventually extending this same approach to all other lines as they too will age.

Earlier this year, I directed both LTA and SMRT to set up a Joint Team, comprising engineering and maintenance experts from both sides, to look into reducing disruptions and enhancing the reliability of the compass lines.

The Joint Team has briefed me twice on its findings and recommendations. They plan to reduce the number of train service withdrawals by 30% by 2013, to adopting a systems-based preventive maintenance approach and tackling key areas like, for example, the pneumatic compressors, the propulsion systems, and the brake control units of different generations of trains. The Joint Team has also identified additional areas of improvement, including systematic upgrading and replacement of infrastructure and operating assets. This illustrates LTA's evolving role. While LTA in the past would have largely left it to the operator to decide on what components to change-out as part of mid-life upgrading of the trains, LTA will henceforth jointly work with the operator on critical aspects of such upgrading programmes.

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I expect LTA and SMRT to continue this new Joint Team approach in studying and implementing the COI's recommendations.

But apart from working closer with the operators, the LTA will also strengthen its regulatory framework. LTA's regulatory approach in the past has been outcome-based, with selective intervention on safety-critical aspects. Going forward, its regulatory framework will be enhanced to be more prescriptive and also to exercise greater oversight on areas that affect reliability and commuter comfort.

To exercise closer and more effective oversight over the train operators' maintenance and operations, LTA will require operators to track certain indicators so that early detection of problems and timely preventive actions can take place. This includes indicators such as the Mean Time between Failure (MTBF) of train propulsion and braking systems, incidents of dropped claws, misaligned third rails, and the number of trains in queue for wheel re-profiling works. These will give the regulator a better sense of the operator's maintenance efforts. In addition, the operators will be required to submit to LTA trend analyses and improvements plans with specific timelines to arrest and reverse faults.

The COI has also recommended that LTA impose a requirement on SMRT to conduct a Maintenance Management System audit, to identify areas of possible improvement in their maintenance regime. I fully agree. LTA will require SMRT to engage independent experts to audit their maintenance processes every three years. I have also asked SMRT and LTA to work with and consult their counterparts overseas who have to operate and regulate older MRT systems, to see what preventive measures we should put in place, and what useful lessons we can learn from them.

New Operating Performance Standards (OPS) will be introduced to better reflect commuters' experience. In particular, more stringent standards will be set on the frequency and number of delays. LTA will also review the penalty framework, which includes the maximum fine payable by the operators for regulatory breaches, so that the penalties can be more commensurate with the severity of incidents and their impact on commuters.

For incident management, the COI has called for greater clarity in the roles of stakeholders, and for improved coordination between stakeholders; improvements to various aspects of the incident management plan with an emphasis on the well-being of passengers; and ensuring incident management readiness. LTA and SMRT have taken steps to address the gaps and the lapses that were identified with regard to incident management even prior to the release of the COI report. And I am confident that both parties are better equipped today than they were a year ago to handle similar incidents.

The regulator has taken the lead to better integrate stakeholders' and transport emergency plans to ensure that there is clarity in their respective roles. Since the December incidents, LTA has worked with the operators to harmonise their incident classification levels to be consistent with LTA's. This ensures that appropriate support from all parties is rendered in accordance with incident severity. LTA will continue to review and refine these plans, and robustly test these against realistic exercises and challenging scenarios.

We have taken measures to improve the incident management plan with an emphasis on passenger well-being. When I addressed the House in January, LTA and the operators were looking into the improvement of contingency plans for train service disruptions, particularly with regard to bus bridging services and the improvement of communication to in-train commuters and to the general public. Since then, LTA has worked with the operators to provide regular bus services free of charge at designated points nearest to affected stations in the event of an extended MRT service disruption, to improve signages at the stations, and to develop more robust and comprehensive station-level plans to deal with such incidents.

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The premature failure of batteries during the December incidents caused some discomfort, indeed, great discomfort to commuters. In response to the COI's recommendation to improve back-up power, SMRT has committed to instituting more battery checks, while a detailed study will be carried out to look into the feasibility of extending the current duration of back-up batteries from 45 minutes to 60 minutes.

As regulator, LTA issued to the PTOs early this year, a Code of Practice (COP) on incident management. This new COP sets more prescriptive standards for compliance on key aspects of incident management such as incident reporting by the operators to the LTA and other authorities, information management via regular and comprehensive announcements, the detrainment of passengers from stalled trains, and bus bridging services. The introduction of a COP relating specifically to incident management signals its importance and will raise standards of incident management. Beyond the COP, the rail operators will now be required to seek approval from LTA for their Rail Incident Management Plan (RIMP).

Sir, the COI was set up to look into the causes of the December disruptions and to make recommendations to minimise the recurrence of such incidents, as well as how on future incidents should be managed. The COI has delivered on their Terms of Reference, and done so in a manner which is open, transparent, and fair in allowing for due process. This also means that it is to be expected that the parties involved will hire good lawyers and credible experts as part of the inquiry processes. More importantly, I believe that the COI has taken an objective, fact-based and thorough approach in its inquiry, with a clear emphasis on being constructive and forward-looking. MOT is satisfied that the Committee has met its objectives and our expectations.

In particular, the COI has enabled us to get to the root of what happened on 15 and 17 December as best as we can, given that unfortunately, some of the information was not preserved or available by the time the Committee started its work. We will therefore have to implement more effective forensic investigation procedures as recommended by the COI, so that we can learn useful lessons whenever we have significant incidents and disruptions. Nonetheless, as a result of the COI's thorough and systematic work, we now know much more about the vulnerabilities of the NSEWL and can take more appropriate preventive and remedial measures.

It is not the purpose of the COI to determine accountability and penalties to be imposed for the incidents. LTA, as the regulator, will separately complete its investigation into the December incidents. The findings of fact within the COI report will provide useful input to LTA's investigation and I understand that LTA will announce the outcome of its investigation shortly, including the penalties that will be meted out.

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Sir, let me conclude. SMRT's maintenance regime had shortcomings, but we too – both MOT, as the supervising Ministry, and LTA, as the regulator – have to shoulder our share of the responsibility. We could have done more, and could have done better. The December incidents were a painful lesson but we can and we will learn from them. We will improve our ability to address new challenges that arise with an expanded public transport network. I give the House my assurance that we will spare no effort to improve.

The COI itself may have drawn to a close, but it marks the start of the next phase for all of us. We know that we must work hard to restore confidence in the MRT system. We will put in place measures to address specific problems that have been identified to improve the overall reliability of our system. We will move towards a more holistic and robust framework for maintenance issues and we will strengthen today's regulatory framework so that the operator is held more accountable.

This Government is responsible for delivering a quality public transport system to Singaporeans. We take this responsibility seriously and we will deliver.

3.25 pm

Mr Cedric Foo Chee Keng (Pioneer): Sir, it is very heartening to hear that the Minister has received and accepted the COI report and has also acknowledged that the LTA has also fallen short. Can I ask the Minister what gives him the confidence that LTA will correct all its shortcomings, and also what gives him the confidence that SMRT will from now on improve its maintenance culture and regime?

Mr Lui Tuck Yew: Mr Speaker, Sir, I thank Mr Cedric Foo for that excellent question. Let me first of all talk about some of what SMRT is doing. I think when both the chairman and the interim CEO talk about re-engineering the company, I am very much heartened by the fact that it is not just about re-jigging the organisational structure but putting a renewed emphasis on engineering, maintenance and its role in providing an essential public service.

My understanding is that this is felt on the ground. When I visited SMRT, talked to the people on the ground, the people doing the maintenance and operating the systems, they too sensed that there was that renewed emphasis on engineering. And I urge SMRT to continue this because ultimately it is, I think, the culture of the organisation that will set the direction and for the team thereafter to effect these changes.

On LTA, it has always taken its regulatory role seriously. It tries to strike a judicious balance between being the designer and developer of the MRT system as well as regulating the system. In that sense, I think it has done reasonably well in both.

In the past, I think the emphasis had been on an outcome-based approach, and the focus had been on safety-critical aspects. And it has realised that it needs to do more in this regard, not only working in closer cooperation with the operators on an ongoing basis but also to revise the regulatory framework to pay more attention to not only the safety-critical aspects but also to reliability-critical aspects and commuter comfort. There are also other regulatory changes that I have mentioned, and on which LTA will provide greater detail later. And I believe that, overall, this will strengthen the regime within LTA.

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Mr Gerald Giam Yean Song (Non-constituency Member): Mr Speaker, I thank the Minister for his comprehensive explanation. I have two broad questions: first, the focus on the PTOs that has arisen from this incident; and, secondly, how much leverage LTA has over them. First question – we have seen from the report that there have been shortcomings in the maintenance work culture and the COI recommended that SMRT focus on being an engineering company, which suggested that it was not really focused on that before. So, is this due to the setup of the structure of this system where there is a focus on making profits rather than engineering, which is a cost centre? Engineering is the cost centre for SMRT at this point of time and it will be for the foreseeable future. Second question – what leverage does LTA have over the operators? The Minister mentioned that there are plans to increase the fines and there are also plans to work together more with the operators and have more performance metrics. Besides all these things, I think underlying the whole thing is just the fines that are going to be increased. Is there any other leverage that LTA has over the operators to ensure that they do what they are supposed to do?

Mr Lui Tuck Yew: Mr Speaker, Sir, I thank Mr Gerald Giam for his questions. Let me deal with the second one first, which is on the leverage. In addition to working with them, fines and so on, there is also the issue of a licence. What happens is that we have a licence that is for a limited duration. For the North-South-East-West Lines (NSEWL), the licence expires in 2028.

And because we have more than one operator in the system, we do have – as we had done for the Downtown Line earlier last year – the possibility of putting out the lines for tender and getting the best offer from potential operators to run these lines. So, it is not as if SMRT will be able to run these lines indefinitely. They have a licence. The licence is for a fixed duration and it will be up for renewal. In the very extreme situation, of course, if they are egregious in breaching the licence conditions, then LTA can take other actions against them, based on the licence conditions.

Let me move on to his first question which is on the focus of the operators, because I think that is a fair question to ask. They have to find the balance between being a commercial entity as well as being an engineering company that provides an essential public service. The COI – and I agree with them – felt that going forward, the SMRT needed to pay more attention to the engineering aspects. Has there been an over-emphasis on the commercial aspects and should we strip it out from the operator altogether? That probably is the gist of the question. If I could continue the discussion from yesterday on buses and extend it to trains now – and we look at what is happening in different parts of the world – back to this issue of whether public transport should be nationalised? Should it be single operator concentrating solely on not the commercial parts, but the engineering and delivering the service? I think you will find that there are different models. The two models that I thought maybe worthy of bringing to the attention of the Members of the House is that adopted by London tube and the New York subway. Both of these systems are run by nationalised entities that focus only on the delivery of the essential service. I do not think it is in our interest to emulate the outcomes or the standards that are provided by both the London tube and the New York subway.

I think at the end of the day, when we have a profit motive in the equation, it actually engenders certain behaviours in the operators that require them to be more efficient, to be more productive. And when a new licence comes up or the existing licence comes up for tendering, they have to put in the best possible bid, as we have seen for the Downtown Line. There is that pressure on them to be efficient and that is a helpful ingredient that I would like to see in our public transport network.

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Mr Christopher de Souza: Mr Speaker, on the issue of the audit, there is going to be a lot more kilometres of line of rail in the next few years. A lot more stations, obviously a lot more manpower. How will the audit of every two years, or every three years, have the capacity for that "give" in future of operations?

The second clarification is not the debate of whether SMRT should stop its retail business, but really that the bandwidth of SMRT operations is occupied by operations, the maintenance, the aligning of services and the customer-centric nature of transporting individuals from one place to another. So, it is not to do away with the retail or the commercial sensibilities of the business, but to have the assurance of the Minister that at the front centre of the bandwidth is operations.

Mr Lui Tuck Yew: Sir, I thank the Member. Those are very, very valid comments. If I were to take on the second point that the Member mentioned with regard to bandwidth, and where SMRT is focusing its orientation, that is indeed a very valid point. At the end of the day, just like LTA, with the need to balance between being a designer, developer and a regulator, likewise, the operators will also need to balance their dual roles. In that sense, it is a fair point and we will need to constantly remind both the management as well as the board that they should not pay undue attention to only one aspect, to the detriment of the other. So, that is an absolutely valid point.

On the audits: in addition to what LTA does and will continue to do, we are talking about getting independent auditors and assessors to come in, to take a look and provide us with a heath check every three years or so. Depending on the size of the network as well as the terms of reference for the auditors, I am sure they will size up their resources accordingly.

Mr Speaker: I have a request. We have got quite a few Members who want to ask questions. Can we keep the questions short, please? Mr Low Thia Khiang.

Mr Low Thia Khiang (Aljunied): Sir, I noted that the Minister has worked hard in response to the December incidents. I have two clarifications. One is I wonder whether the profit nature of the operators, which forces them to look after the bottom line, has resulted in the consequence of a lack of focus in the maintenance. Secondly, I would like to seek clarification on incident management. The Minister earlier said that there is now a new incidence classification system that is in sync with both the SMRT and the LTA. I would like to know what the new classifications are and what happened in the past. I also understand that there is now a new code of practice on incident management. So, may I know what can commuters expect if the December incidents were to happen again?

Mr Lui Tuck Yew: I thank the Member for the questions. Like I said, we really do need from time to time to review and to re-orientate where the balance is: for the regulator, balancing between designing and developing and regulating; for the operators, balancing between the commercial and the engineering aspects. This is something that we have the commitment from SMRT to look into.

To some extent, it depends on the composition of the management team, especially at the senior level as well as the culture of the organisation. Over time, the culture shifts. It will take time, I think, for the culture of the organisation to shift towards paying a lot more attention on the engineering as well as the maintenance aspects.

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As I have said, talking to the people on the ground, those who are really directly working on the systems, what we find is that the management team is paying far more attention, going down to the ground and understanding some of the issues, the challenges that they face, the resources that they need to support it.

On the Member's second question on incident classification: in the past, the SMRT used a six-level classification whereas the LTA used a three-level classification. So, you can imagine that sometimes, there is not a lot of clarity between the six different levels, nor a lot of alignment between the six and the three. After the December incidents, LTA has worked with both the operators to make sure that we have a common alignment, a harmonisation of the incident classification systems. It is important that we can not only communicate clearly between the operators and the regulator but also reach out to the other stakeholders like TransCom, SCDF and other agencies that might be able to provide support.

Now, let me say that, actually, before the December incidents, there was already an SOP, where the operator could draw on support from all these stakeholders. It is not as if, prior to December, there was no such mode of requesting for help and support. It is just that after December, there is a clearer harmonisation and, hopefully, less confusion of the different roles and responsibilities going forward.

On the Code of Practice and what commuters can expect to have: one thing we require them to look at is their detrainment procedures to make sure that the decision is taken in a more timely manner, that passengers are not kept in the train without knowing what is happening and not too long a time is taken before the detrainment processes start. That is one of the areas. Two, is that we require announcements to be made, not only at the station that is affected by the incident, but across the entire line and over the whole network as well as to make sure that the general public is properly informed, especially if it is a severe incident. There are some of these different measures and processes that are spelt out as well as, of course, the free bus bridging services and what the stations ought to do better in terms of preparing themselves for such incidents.

Asst Prof Tan Kheng Boon Eugene (Nominated Member): Thank you, Mr Speaker. I thank the Minister for his statement. It is significant that the LTA has been deemed to have fallen short, and that there will be legal penalties meted out to SMRT. My question relates to what sort of penalties will there be for the LTA. We have a classic question now of who regulates the regulator.

Mr Lui Tuck Yew: I thank the Member for the question. If I take it at a deeper level, I guess that it is really a question of whether we should have a separate entity altogether to look at the regulatory aspects, separate from what LTA is doing. It comes back to the question of whether we are better off dividing the limited expertise into two organisations or to house them centrally. Within the LTA today, we have made clear a separation between the design, the development arm and the regulatory arm, even though they are housed under the same organisation. Part of it is really because we think that there is a great deal of value in making sure that the people who have had some experience in design, development and the building of the system are able, for some of them, to transit into the regulatory arm and therefore spend enough time there before they move back to developing a new line or a new network altogether.

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Ultimately, it is the responsibility of the Ministry to make sure that LTA performs as we expect of it, both in designing, developing, delivering the new networks that we have planned, rolling them out on time and safely, as well as regulating the operators to make sure that they deliver on the standards that we expect of them. This includes the operating performance standards, the incident management, as well as the maintenance and safety regimes.

Mr Speaker: Order. I propose to take the break now. We will continue with the clarifications after the break. Before I suspend the Sitting, I would like to remind Members to please turn their mobile devices to "silent" mode. We have had quite a few incidents today. I suspend the Sitting and will take the Chair at 4.05 pm.

Sitting accordingly suspended

at 3.43 pm until 4.05 pm.

Sitting resumed at 4.05 pm

[ Mr Speaker in the Chair]

GOVERNMENT'S RESPONSE TO THE REPORT OF THE COMMITTEE OF INQUIRY INTO THE 15 AND 17 DECEMBER 2011 MRT DISRUPTIONS

Debate resumed.

Mr Speaker: Before I call on the clarifications, what I propose to do is that we will take all the clarifications together, allow everyone to ask their clarifications, after which I will call upon the Minister to answer them. Er Dr Lee Bee Wah.

Er Dr Lee Bee Wah: Thank you, Sir. I have four supplementary questions. First, how much will it cost to adopt all these recommendations by the COI and who will pay for them? Question two: can the Minister share with us if there are any recommendations that will not be adopted by SMRT – that is, those that they said needed feasibility studies? Question three: would we expect to see some changes in the top management and the board of SMRT – that is, reinforcing the board or bringing in somebody who has engineering experience and background? Question four: besides imposing more fines on PTOs, would the Ministry think of some other ways that benefit commuters more directly, for example, giving the commuters a free ride for the day when the train is down?

Mr Speaker: Mr Cedric Foo.

Mr Cedric Foo Chee Keng: Sir, there has been a line of questioning that the quest for financial viability/profits by the PTOs is incompatible with running a reliable system. I would like the Minister to comment on that, or whether or not indeed the reverse is true, that only with financial viability as one of the necessary conditions can the PTOs have funds to maintain and make it reliable.

The second point relates to penalties. I understand LTA is looking into increasing the quantum of the penalties but I would like to ask the Minister whether he feels that the thresholds that PTOs will be held to should just be on outcomes of the standards of service, or should these thresholds also include whether they successfully pass audit regimes for maintenance. This way would be more preventive, rather than allowing the breakdowns to occur and the harm done.

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My last point is whether or not both the LTA and SMRT will continue to communicate as they progress on the steps they have taken, pursuant to the COI's recommendations.

Ms Sylvia Lim: Sir, my clarification relates to incident management. Earlier the Minister mentioned about the fact that going forward – or maybe that has already been done – the various agencies will harmonise their classification of incidents. There was a media report on Saturday in The New Paper where former CEO of SMRT, Ms Saw Phaik Hwa, mentioned that under the critical incident protocol that SMRT had signed up to at that time, the agencies such as the Police and the SCDF could only be activated if there was a death. I would like to ask the Minister: one, is this true; two, if true, was this approved by LTA; and, three, going forward, will this change because if it is true, I think it is a very worrying protocol to have.

Mr Ang Hin Kee: Sir, a question for the Minister. Some of the SMRT ground crew that I spoke with have said that following the December incidents, there have been many visits by the senior management on the ground to engage them, to get feedback from them and to also render support to the hard work they have been putting in. They have been asking if such ground level encouragement and support will be sustained and whether or not LTA, or even if I daresay the Minister, would also be involved in such engagement to get views from the ground.

Mr Speaker: What I suggest is that we let the Minister answer that batch of questions and then we will come back again for the rest.

Mr Lui Tuck Yew: Thank you, Mr Speaker. I think this is better, otherwise I really will lose track of who is asking what. Let me, first of all, reply to Er Dr Lee Bee Wah – recommendations not adopted. No, we are really going into it, to study those that have not yet been adopted with an open mind, and our every intention is to adopt the recommendations as best as we can.

Changes in top management: I would say that I am less interested in "heads rolling". I am more interested in heads being fixed on and focused on the problems and the issues, which means carrying out thorough checks, doing systematic analyses, and doing a proper follow-up. I know SMRT is actually doing its CEO search. It has been doing so for some time. I will leave them to carry out the due process but I think Mr Tan Ek Kia, to his great credit, has actually done a lot for the company.

On whether there are ways to benefit commuters more directly: I accept her point. I will ask LTA to see if there is some possibility of looking into maybe a compensation regime and in what form. We will have to learn from what other countries and other operators are doing and see whether there is room for us to adopt it.

On cost: I do not know what the exact cost is going to be. I know the other question is, is this cost going to be passed on to the commuters? That is probably the question in our minds. Let me say that the Fare Review Committee is looking at how the fare formula is going to be going forward – Mr Magnus and his team are now currently looking at it. But if I look back into the past at what the fare formula says, the fare formula is premised on three areas: one, is on inflation; two, is on the wage index; and the third, is on a productivity dividend that comes back to the commuters. There is no formula or factor in the formula that says that if they spend more on maintenance that will come out as part of the fare review. Okay, so I assure her on that.

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Mr Cedric Foo, very good question. Thank you. On financial viability, I think it is important and it is part of the PTC's role not only to set fares, not only to make sure the standards are upheld, but also to make sure that over the longer term, indeed the operators are financially viable. If they run inefficient regimes, if they are unproductive and have losses, ultimately it is the Government, the taxpayers, the commuters themselves, who have to pay for it. To me, efficiency is important. Giving them incentives to be more productive is important. In the fare formula, there is a productivity extract and so they have to meet that. Anything that is more productive, they get to keep it. So, I think there is that incentive in there as well.

On audit regimes and whether we should impose penalties: we can consider this but I look at audit regimes more as helping us uncover potential shortcomings and making improvements rather than as penalties that we want to impose on them. I dare say that whether it is financial audits or, in this case, engineering audits, people are likely to be more cooperative if they know that it is all in the process of helping us uncover shortcomings and improving on them, which is ultimately my main priority. We will have to look at that a little bit more closely.

Certainly, I expect them to continue to communicate on the improvements that they are making. SMRT, I think, had last week talked about some of the improvements that are being made, and they will continue to do so.

Ms Sylvia Lim mentioned an account by Ms Saw Phaik Hwa in The New Paper. As far as I understand it and as I mentioned earlier, there is an SOP. The SOP existed before December. The SOP allows the operators to call on TransCom and other Government agencies for assistance. During the course of the incidents on 15 and 17 December, SMRT was probably preoccupied and so LTA took on the responsibility of calling the Government agencies and asking for resources to come in to provide support. So the Police was in. LTA itself sent people on to the ground, and helped to monitor the system, and changed the traffic lights – for example, the timings in order to allow more time for the buses, and so on. There is an SOP in place. I do not believe that she has gotten the account accurate.

On Mr Ang Hin Kee's point – I am gratified to note that the visits by the senior management are being felt on the ground. I had myself visited SMRT to talk to the maintenance people themselves and also to express my appreciation to a small group of them. Hopefully, the message will be passed on to a larger group, that I really appreciate the hard work and the dedication that they are putting in under very trying circumstances. I hope they will be sustained. I would like to believe that they will be. And I take the commitment of the Chairman and as well as the interim CEO that they want to re-engineer the company. Certainly, we already see some of that emphasis being felt down on the ground.

Mr Seng Han Thong (Ang Mo Kio): Sir, many Singaporeans, especially commuters, have given feedback that they did not follow the six-week COI thoroughly, but they know from the COI Report that both incidents were preventable. May I ask the Minister what is his message to the commuters, in particular? Two, of all the recommendations, which will be at the top of the agenda for both SMRT and LTA? And third is on the system maintenance audit every three years. Will they be made public and, also, can the audits be every two years in the initial period?

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Ms Denise Phua Lay Peng: Sir, I would like to, first, commend the Transport Minister for his level-headedness and diligence by which he has tackled this whole challenge. I had some concerns when there was talk about the shift in focus from a commercial focus to an engineering focus. I want to ask the Minister, post-COI, if there is a risk of an over skewing towards engineering and maintenance versus the other priorities? I believe that engineering proficiency or even elegance is just a means to an end, and that public transport is, after all, a public good. The business has to be customer-centric, user-centric. What the public wants is not just engineering elegance, but what it wants is timeliness for the daily travel, the commute; reasonable fares; and accessibility and connectivity. That is my question to the Minister: if there is going to be an over skewing of focus towards engineering?

Mr Png Eng Huat (Hougang): Thank you, Mr Speaker. Sir, since the PTOs will now be closely audited, and PTOs being profit-oriented entities, would the Minister consider mandating that they set aside certain amount of money for repairs and maintenance costs? As I was going through their financials, I saw that in FY2011, the repair and maintenance costs actually came down. The reason cited was due mainly to lower scheduled repairs and maintenance costs. Going forward, we are going to have more trains and the ridership is going to increase. Maybe the Minister can look into this.

Mr Lui Tuck Yew: Thank you, Mr Speaker. Let me take the questions in turn. Firstly, from Mr Seng Han Thong. Yes, I agree with the COI Report that the incidents could have been prevented. Whether it is making sure that the MFV is functioning properly, making sure that the vibration level is being tackled through more regular profiling of the wheels, picking up sags in the third rail at the appropriate times. There were a number of recommendations by the COI on how to improve the situation, going forward. On his point about recommendations, they are all important. It would be remiss of us not to pay attention across the board to all the recommendations because we are trying to eliminate as many of the weak links as possible. We really need to tackle this on multiple fronts. The whole purpose really is to try and minimise these severe disruptions as much as possible. On the point on system audits: let us do them first and, if necessary, we will do them on a more frequent interval during the early years.

I agree with Ms Denise Phua. Engineering is only the means towards an end. Therefore, the emphasis on engineering is towards a more reliable system, fewer breakdowns, fewer train withdrawals so that the journeys of commuters are not interrupted. I have asked them to pay special attention to disruptions during the peak hours. When you have a train withdrawal during peak hours, really, the impact cascades for quite a while simply because commuters that are detrained need to move on to the next train and the next train coming in is already reasonably crowded. The whole idea of making this more reliable is so that commuters can have greater assurance that they will have a predictable journey. It is not really because engineering is now the item that the management is paying attention to – and they should – but it is really because we want to deliver a better system.

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On Mr Png's point of whether they should set aside more money or whether the regulator should require them to set aside more money: it is not the amount of money because they do have the money. They are declaring profits. It is really what standards we hold them to. The standards that we hold them to and impose on them would subsequently translate into the extent and the amount of work that they have to do. It is not for us to say, "Better set aside another $10 million" and so on and so forth. I am not so sure we want to micro-manage them to that extent. We will ratchet up the standards, making sure that we pay attention to the right areas, doing the regular audits to throw up aspects that we may not be aware of. These will already require them to put more emphasis and resources, including financial resources into the right areas.

Mr Yee Jenn Jong (Non-constituency Member): Sir, I have two questions. The first was somewhat answered by the Minister, but I still hope to make a point regarding the composition of the board. Going through the list, I noticed that it comprises members who are trained mainly in accounting, finance, economics and law. I do not think there is anybody with transport engineering background originally. I want to ask who will look eventually into the suitability of board members, not just at SMRT but at the other public transport operator as well, to ensure that this emphasis on better engineering is across the board.

The second question is that during the COI, there were views that the burden of changing of the claws should lie with LTA as the ultimate asset owner. Such views may persist in future. The COI recommended that SMRT and LTA reviewed asset management framework which included many things, including maintenance. My question is, how much money the Minister foresees LTA may have to bear as a result of this requirement for better maintenance and infrastructure, from the point of LTA as the ultimate asset owner.

Mr Liang Eng Hwa (Holland-Bukit Timah): Sir, a related but relevant question. I want to ask the Minister whether LTA will expect and demand SMRT to extend this enhanced maintenance regime and also, of course, the tighter audits that will come along, to SMRT's other subsidiary line which is the Bukit Panjang LRT, where we are still seeing frequent breakdowns and disruptions.

Er Dr Lee Bee Wah: Sir, I would like to clarify that I am not asking for heads to roll, as the Minister mentioned. I agree that the interim CEO has been doing a lot. What I was trying to say was: will there be more people with the engineering experience and background being brought into the board and the top management in order to strengthen the team?

Mr Teo Siong Seng (Nominated Member): Sir, I would like to ask a very basic question. If all the schemes and surveys were to be implemented, does the Ministry consider if they would add to the costs of the whole system, and, eventually, whether there will be a fare increase.

Mr Speaker: Minister, please.

Mr Lui Tuck Yew: There are comments on bringing the right expertise into place at the management level and at the board level. And indeed, over time they have been doing that. For example, since 2010, they have got somebody from the engineering side attending the board meetings. Not as a board member, but attending the meetings so that the board itself pays the appropriate amount of attention to engineering matters. I believe also that beyond the composition of the board, they do refer to expertise outside of the board that may be able to advise them on specific issues related to engineering or other aspects altogether.

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There are cost-related issues. Mr Teo Siong Seng and Mr Yee Jenn Jong mentioned them as well. Who bears these costs? Is this going to be passed on to commuters? Let me assure you, as I have answered earlier, that the fare formula as in the past, really is dependent on macro factors of inflation and wages minus the productivity dividend. It is not dependent on how much extra they spend on maintenance and so on. I do not expect that additional costs that they will spend on claws or whatever it is are going to be passed on to the commuters as a result.

The question from Mr Yee Jenn Jong is who bears which part of the costs. There is an agreement in the licence agreement on the apportionment of the costs, whether it is on the fixed infrastructure or it is on the rolling stock or on additional rolling stock in order to cater to, for example, ridership growth. It is a reasonably complicated matter. I do not really want to go in depth into this. To be fair, there is a portion that the Government is required to bear, for example, renewing ageing infrastructure. Which is why when SMRT announced that they were going to spend $900 million on re-signalling as well as changing out the sleepers and so on – we are still discussing on what is the exact apportionment of the costs between the SMRT and the Government. There is responsibility from the point of view of the Government that we have to bear part of the costs.

Mr Liang Eng Hwa, I take your point on the Bukit Panjang LRT. There is a commitment from SMRT. They were going to spend about $3 million over the coming years – we announced that last year – to improve the BPLRT. Still not quite satisfactory. I agree with the Member on that point, and we ought to do more and see greater improvements going forward.

Mr Speaker: Order. The Clerk will now proceed to read the orders of the day.

Second Reading Bills