New bus contracting model a "more sustainable option": SBS Transit

[Aris]

New bus contracting model a "more sustainable option": SBS Transit

By Kevin Lim
POSTED: 21 May 2014 18:49

SINGAPORE: SBS Transit, Singapore's main public bus operator, said on Wednesday it welcomed the Government's new contracting model for bus operators, describing it as "a more sustainable option for the future".

"It will have a major impact on the way we operate. We are, however, prepared for this upcoming challenge and will be able to tap on the experience of our sister companies in London and Sydney, which operate in a similar tender regime," SBS Transit said in a statement.

SBS Transit's parent ComfortDelgro operates bus services in Australia, China, Ireland and the UK, where subsidiary Metroline is one of London's largest public bus operators with a fleet of over 1,700 buses.

Its remarks come after authorities announced plans to restructure the public bus industry by adopting a "government contracting model", starting from the second half of this year.

Under the new system, the Land Transport Authority (LTA) will determine the bus services to be provided and the service standards, and bus operators will bid for the right to operate these services.

The bus operators will be paid fees to operate the services, while fare revenue will be retained by the Government.

SBS Transit operates about 250 bus services with a fleet of more than 3,200 buses.

It also operate the North East and Downtown MRT lines, as well as the Light Rail System in Punggol and Sengkang new towns.

For the three months ended March, SBS Transit's bus operations suffered an operating loss of S$4.7 million, down from a loss of S$5.4 million in the first quarter of 2013.

- CNA/do

A sure win win situation, they win all the time and we, the commuters lose out. When they make profits they keep and those areas where they lose money, the government will cover to ensure profitability.

[richardg]

SINGAPORE: The local bus industry will undergo an overhaul after the Government announced on Wednesday (May 21) it will go with a “government contracting model” starting from the second half of this year. Actual implementation will only take place in 2016.

The Land Transport Authority (LTA) said in a statement that the existing Bus Service Operating Licences (BSOL) for the two public bus operators – SMRT Buses and SBS Transit – will expire on Aug 31, 2016.

How the agency intends to restructure the industry:

Bus operators will bid for the right to operate the services, based on the routes and service standards laid out by the LTA, which will pay the operators. Fare revenue will be retained by the Government, it added.

All bus infrastructure such as bus depots, as well as operating assets such as buses and existing fleet management system will be owned by the Government, too. This will lower the entry barriers and attract more bus operators, and ensure the transition from incumbent to any new operator will be smooth, the LTA said.

“Besides strengthening the Government’s ability to respond more expeditiously to changes in travel demand and service level expectations, bus contracting will also promote greater competition and efficiency among operators as they now have to compete for the right to run the services," the LTA said.

"This in turn will lead over time to provision of better bus services in a cost-competitive manner, thereby benefitting commuters."

Commuters can expect to experience shorter intervals between buses during peak periods in the morning and evening once the government contracting model is in operation. The LTA said it expects the interval to be no more than 15 minutes for 100 per cent of all bus services during these periods, with intervals of no more than 10 minutes for half the routes.

By comparison, bus operators are expected to ensure bus intervals are no more than 20 minutes during peak periods under the existing Bus Service Enhancement Programme introduced in 2012.

Gradual changes to come

LTA has been experimenting with the government contracting model since last year via the City Direct Services and Peak Period Short Services. The agency said that competitive tendering for public bus services will be introduced in phases over several years to ensure a smooth transition for all in the industry.

The transport authority will bundle all bus services in Singapore into 12 packages, each comprising 300 to 500 buses. As a start, LTA will tender out three such packages, with the first tender scheduled to be in the second half of the year. Bid winners will start operating bus services from the second half of 2016, with the three packages constituting about 20 per cent of existing buses.

The contracts are for five years, with an additional extension of two years available pending good performance, the agency said.

Incumbents SMRT Buses and SBS Transit will continue to operate the remaining nine packages, but the LTA will negotiate with both parties to offer their services for another five years based on the contracting model once the BSOL expires. Once the new five-year deals expire in 2021, more of the bus packages will gradually be opened up to other operators, it said.

- CNA/do

[Aris]

Competitive tendering....who in Singapore has the means and the expertise to run bus operations? No horse run.

[KAO LUO]

price going up again bo ?? ,.,.,.,.,.,.,.,.,.,.,.

[hkh]

Funny leh......so what does the Operator do ?? Just provide Drivers ?? Next time Bus breakdown we can only blame garment ??

[dan]

Strange that with all that fare hike, all that planning, all that calculation that there are still losses, makes you kind of wonder where those brains are on?

[hkh]

Originally Posted by dan

Strange that with all that fare hike, all that planning, all that calculation that there are still losses, makes you kind of wonder where those brains are on?

Well do you know HDB lost billions every year in building flats for us ?? And they still survive and kicking ??

[dzylim]

Does that means that SMRT and SBStransit now does not own any facilities including those retail areas they are currently running?

This is very important because these facilities have been generating profits for them while the transport services are losing money. yet none of those profit goes back to subsidies the transportation services and maintenance.

If they do not want to hold on to any asset, then those retail assets should also be given up.

money making one wanna keep but money losing one throw back to consumer? KNS

[KAO LUO]

Originally Posted by hkh

Well do you know HDB lost billions every year in building flats for us ?? And they still survive and kicking ??

ha !!! ..... lost ? ha they use what to lost?

[hkh]

Originally Posted by KAO LUO

ha !!! ..... lost ? ha they use what to lost?

They count their losses against the land cost if they develop into condo or shopping mall instead of just HDB flats.......so they lost billions........on paper as usual.......