The Land Transport Authority of Singapore announced on Friday that it will take over the operating assets of SMRT Trains under the New Rail Financing Framework.

The takeover is scheduled to take place on October 1 pending SMRT shareholders' approval.

LTA will pay about S$1 billion for more than 60,000 assets, including trains and signalling systems. In return, SMRT will have to pay a licence charge annually to operate the North-South and East-West Lines (NSEWL), the Circle Line (CCL) and the Bukit Panjang LRT (BPLRT) and earn revenue from them.

The transport operator will also have to abide by a stringent maintenance plan, as well as proper service standards.

LTA said that this change will not affect the day-to-day operations and it will not impact the employees of both SMRT Train and SMRT Light Rail. The commuter fares will also remain unaffected.

The Land Transport Authority will take the decisions regarding the renewal of assets or increase capacity. SMRT will have to focus fully on meeting the service standards.

"The New Rail Financing Framework (NRFF) will benefit commuters. It will allow LTA to add trains to respond more quickly to demand, and to replace and upgrade existing rail assets in a more timely manner," Transport Minister Khaw Boon Wan told AFP.