Annual Report 2016 01 CHAIRMAN’S STATEMENT
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CONTENTS 02 Chairman’s Statement 06 Group Financial Highlights 08 Corporate Information 09 Board of Directors 14 Key Management 19 Operations Review 24 Sustainability Report 29 Corporate Governance 47 Directors’ Particulars 51 Risk Management 54 Financial Calendar 55 Financial Statements 56 Directors’ Statement 61 Independent Auditors’ Report 64 Statements of Financial Position 66 Group Income Statement 67 Group Comprehensive Income Statement 68 Statements of Changes in Equity 70 Group Cash Flow Statement 71 Notes to the Financial Statements 107 Share Price Movement Chart 108 Shareholding Statistics 109 Notice of Annual General Meeting Proxy Form annual report 2016 01 CHAIRMAN’S STATEMENT Introduction As part of the NC, SBS Transit will be meet new requirements such as the 2016 was a watershed year for paid a service fee to operate these Maintenance Audit requirements. Singapore’s public transport industry. bus services while the fares collected All scheduled bus services migrated to for the bus rides will go to the LTA. Other Significant Highlights the new Bus Contracting Model (BCM) The total fee for the contract period of The Public Transport Council undertook while the entire fare structure was about seven years, including the leasing the annual fare review exercise in simplified to adopt a purely distance- fees, is estimated to be $5.32 billion. October 2016. Similar to the year before, based approach. In the rail sector, This excludes adjustments for inflation, there was a reduction in bus and train the Government announced that the changes in wage levels and fuel costs, fares as fuel prices fell. Overall, fares Thomson-East Coast Line (TEL) would service variations, and incentive/ were lowered by 4.2 per cent and the be operated along a similar concept disincentive payment. In addition, balance 1.5 per cent fare cut carried as the BCM with only the two local rail we retain revenue from advertising over to 2017. This translates into lower operators invited to tender for it. Two- and rental. card fares of between one and 27 cents car trains were introduced on our Light for adults, and one and seven cents for Rail Transit (LRT) systems in Sengkang Under the NC’s Bus Service Reliability senior citizens. Significantly, the fare and Punggol and 28 new trains – 16 for Framework, commuters can expect structure was simplified for the rail the LRT systems and 12 for the North higher service levels and better lines with no fare differential for fully- East Line (NEL) – were delivered. regularity of buses calling at the underground and above-ground lines bus stops. and based on shortest distance. Bus Contracting Model On 1 September 2016, we transitioned The BCM marks a new era in As the provision of bus services to the new BCM. In the Negotiated Singapore’s public bus transport now comes under the BCM, the fare Contract (NC) with the Land Transport industry and is a more sustainable cuts, which were implemented on Authority (LTA), we will operate 196 bus model for the long term. 30 December 2016, will only have an routes under eight bus packages with effect on our rail revenue in 2017. terms ranging from two to 10 years. We restructured our Bus Business during the year to enable us to be more In June 2016, we rolled out salary We continue to operate these bus nimble in our response to the evolving adjustments. With this, new services with our existing infrastructure – and challenging public bus environment Singaporean and Permanent Resident five bus depots, three bus parks, 13 bus and to be aligned to the NC packages. Bus Captains (BCs) earn a basic salary interchanges and 14 bus terminals – New processes, procedures and of $1,950 and can look forward to a while our fleet of close to 2,900 buses systems were put into place to gross monthly salary of up to $3,460, has been leased to the LTA. 02 sbs transit ltd including allowances, incentives and In tandem with the increase in In the area of environmental care, overtime pay, in their first year of service passenger demand, 200 more weekly 72.5% of our fleet or 2,287 buses are with us. trips were added to the schedules of the Euro 5 compliant, which emit less NEL while 242 additional daily trips were pollutants into the environment. We also In September 2016, we provided 36 BCs operated on the SPLRT. conducted a hybrid bus trial with Volvo and staff to help Go-Ahead Singapore Singapore to test the performance of operate two bus services, Services 358 On the LRT systems, we opened two such buses on Singapore roads. and 359, when it faced a temporary stations on the Punggol West Loop – shortage of BCs. Sam Kee in February 2016 and Punggol In road safety, we harnessed the use Point in December 2016 – leaving of technology to help our BCs become During the year in review, 12 of our only two stations unopened. We now safer drivers. During the year, we Light Rail Vehicles (LRVs) used on the have 27 stations in operation on the installed a smart anti-collision alert Sengkang and Punggol Light Rail Transit SPLRT. We also rolled out two-car system known as Mobileye on our (SPLRT) systems were found to have train operations during peak hours buses. Today, about 810 of our buses hairline cracks on their bogie frames. on the Sengkang LRT East and West are equipped with Mobileye and our Although independently assessed as Loops and the Punggol LRT East Loop investment in this technology amounts not being safety critical, we immediately to provide commuters with a more to about $1.5million. withdrew them from passenger service. comfortable ride. We have since replaced all bogie frames Given the heightened security and affected trains have been put To improve service reliability, we environment, we continued to work back into service. As part of preventive have adopted the ISO55001 Asset with the Ministry of Home Affairs as a maintenance, weekly checks have also Management Framework and worked strategic stakeholder in the SG Secure been instituted. Together with the LTA, diligently at enhancing the current campaign to stay united, alert and strong we are working with the train supplier, system designs, improving maintenance in the face of terrorism. Our BCs and Mitsubishi Heavy Industries of Japan, efficiency and effectiveness, as well as station staff attended security briefings which will redesign and replace the replacing ageing equipment to minimise and we conducted regular security bogie frame structures for our entire the incidence of a disruption or delay. exercises with the Authorities to test our fleet of 57 LRVs at no charge. vigilance and preparedness in handling We are working hard to achieve our incidents. As part of our long standing Serving Our Commuters MKBF target of 400,000 train-KM by operational training, our staff are also We rolled out six new bus routes and 2018 for incidents resulting in service trained in first aid and fire safety. amended four bus routes during the delays of more than five minutes. year. We also beefed up 17 services by MKBF, which is the abbreviation for Reaching out to the community we adding more buses and replacing single Mean Kilometre Between Failure, is a serve, we conducted 98 school talks, deck ones with higher capacity double reliability measure used globally in the mini exhibitions and visits to our deck buses. The needs of passengers- rail industry. bus interchanges, depots and train in-wheelchairs were further accelerated depots, reaching out to close to 39,000 as 46 wheelchair accessible bus For 2016, our MKBF for DTL was students. We also invited some 500 of services were rolled out as more ground 260,000 train-KM and for NEL was them from 14 schools and kindergartens infrastructure became barrier-free. 174,000 train-KM compared to the to join us at our inaugural SBS Transit Close to 96% or 193 of our bus services industry’s 174,000 train-KM. The DTL CARES Kindness Day by showing are now wheelchair-accessible. was the best performing MRT line in appreciation to our frontline staff. Singapore in 2016 but we cannot rest on Demand for our rail services continued our laurels. There is more to be done. At our bus interchanges, we launched to grow with over 329 million passenger the “Towkay” programme with free trips made in 2016, representing an Sustainability use of space. Initiated by Gobbler, increase of 27% over the previous year. At SBS Transit, sustainability is central a sister company, the programme The sharp increase came from the to the way we conduct our business. focusses on helping the unemployed Downtown Line (DTL) where average From health and safety to environmental achieve financial independence. daily ridership almost tripled to 220,376 care, from people management to Participants of the programme sell following the opening of DTL2 with 12 reaching out to the community we items such as tissue packs and snacks more stations in late December 2015. operate in, we continue to be deeply at our bus interchanges after receiving In both DTL1 and 2, we operated 18 committed to ensuring that our best training in customer service and stations. Average daily ridership on the efforts are deployed at all times. financial management. NEL grew by 5.2% to 564,701 while that of the SPLRT saw a double-digit growth of 15.3% to 114,094. annual report 2016 03 CHAIRMAN’S STATEMENT Recognition and Awards The increase came mainly from higher of the city. Fully underground, TEL will In the Singapore Governance and advertising revenue as more rail be 43-km long with 31 stations, and is Transparency Index 2016, we were stations were added to the network scheduled to begin operations in five ranked 41st in a field of 631 companies.