(Updates with closing prices in first and seventh paragraphs.)
Dec. 19 (Bloomberg) -- Singapore’s worst subway disruptions on record have led to calls for rail operator SMRT Corp.’s Chief Executive Officer Saw Phaik Hwa to step down. The stock fell the most in seven weeks.
About 80 people held a public rally in Singapore on Dec. 17 to seek a reversal of the higher taxi fares by cab operators including SMRT and called for Saw to resign over the train shutdowns, the worst in the 24 years the subway system has been in operation, the Straits Times reported yesterday.
The subway line running through the shopping district to the central part of the island was shut on Dec. 15 after damage to its power rail, and was closed again in less than 36 hours. The breakdowns, which began Dec. 14 on the peripheral Circle Line, affected about 222,400 commuters heading to the Orchard Road retail strip on the last weekend before the Christmas holiday, based on data compiled by SMRT and the Straits Times.
“The economic impact is probably insignificant, it is much more to do with the inconveniences as a result of the travel disruptions,” said Song Seng Wun, an economist at CIMB Research Pte in Singapore. “Even if it continues to persist into the working week, the impact would be smaller than a typical working week because it’s the Christmas period and many people are on holiday.”
Singapore was ranked as the Asian city with best quality of life, according to a report published by Mercer on Nov. 29. Mercer said cities like Singapore received a high ranking for criteria such as general and personal safety and because they “have been continuously investing in infrastructure and public services.”
The Land Transport Authority said yesterday a team of 150, including SMRT workers, found several dislodged “claws” that supported the rail structure. These were installed to contain vibrations from passing trains to surrounding buildings, it said on its website. The government agency also directed SMRT to impose a 40 kilometer (25 mile) per hour speed limit for trains running through the affected areas, it said.
The stock lost 2.5 percent to S$1.775 at the close in Singapore, the biggest drop since Oct. 31. The decline added to the 13 percent retreat this year, compared with the 18 percent slide in the benchmark Straits Times Index.
Singapore’s government will appoint a committee to investigate the cause of the disruptions and the findings will be released to the public, the Straits Times’s Sunday Times reported yesterday, citing Prime Minister Lee Hsien Loong.
Saw, who told local reporters last week she’s “seriously consider” resigning if there’s a need to do so, told Channel NewsAsia she has no plans to step down over the disruptions. A call to the mobile phone held by SMRT’s duty press officer yesterday wasn’t answered.
“The train service breakdowns happened right after SMRT’s decision to follow ComfortDelgro and revise its taxi fares upwards,” Toh Yongrui, an analyst at UOB-Kay Hian, said in a note to investors on Dec. 16, maintaining his “hold” recommendation on SMRT shares. “Negative sentiment toward public transport operators have been rising and the government may take a firmer stance against service disruptions.”
SMRT, which planned to shut two key subway lines until 10 a.m. Singapore time yesterday for checks, further delayed the reopening of the track through the shopping district before resuming the service about two hours later, it said in statements on its website.
“People will forget,” Song said. “If this is just a temporary disruption in rail services than a more permanent, persistent one, then it will just be a memory in history.”
--With assistance from Linus Chua in Singapore. Editors: Linus Chua, Paul Tighe
To contact the reporter on this story: Glenys Sim in Singapore at email@example.com
To contact the editor responsible for this story: Lars Klemming at firstname.lastname@example.org