Impact of Government's New Bus Contracting Model on SMRT and SBS Transit

Debated in Parliament on 4 Aug 2014.

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Gerald Giam asked why SMRT and SBS Transit were allowed to continue operating nine bus packages without a tender after their licenses expire, whether they benefit from service fees without fare revenue risk or competition, and when all 12 packages will be competitively tendered.
Lui Tuck Yew explained that the Land Transport Authority is gradually transitioning to the new bus contracting model, initially tendering three packages while retaining the current operators on nine to ensure a smooth transition and minimize disruption.
He noted that the nine packages will move to the government contracting model by August 2016, with contract durations varying and competitive tendering expected for more than half of the packages by the early 2020s.

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Gerald Giam Yean Song

Mr Gerald Giam Yean Song asked the Minister for Transport (a) what are the reasons for having SMRT and SBS Transit continue running nine out of 12 bus contract packages without a competitive tender in the initial period of the new bus contracting model even after their Bus Service Operating Licences (BSOL) expire on 31 December 2016; (b) whether during this initial period SMRT and SBS Transit will benefit from being paid the service fee with no fare revenue risk while not being subject to competition for their nine negotiated packages; and (c) when does LTA expect to put out a competitive tender for all 12 bus packages.

Lui Tuck Yew

The move to the Government contracting model is a major shift, involving more than 270 bus services across the country. The Land Transport Authority (LTA) is, therefore, adopting a gradual approach by tendering three packages initially while retaining the current operators in the remaining nine packages. This is to ensure a smooth transition and minimise the risk of disruption to bus services and inconvenience to commuters. A gradual transition provides time for new operators to become familiar with our market, and for LTA to refine and improve on the tendering and handover processes for each successive tender.

The Bus Service Operating Licences (BSOL) of SMRT and SBST will expire on 31 August 2016. At that time, the nine packages that they will continue to run will also move to a Government contracting model. Since the service standards for these nine packages will be similar to that of the three tendered packages, we can use returns from the competitive tenders as a reference for our negotiations with the operators on the nine packages. Contracts for the nine packages will vary in duration and we will continue to gradually move more of them in phases towards competitive tendering when the contracts expire. We expect more than half of bus packages to be competitively tendered by the early 2020s and, the rest, thereafter.

Page: 112

Summary written by AI (learn more)

Gerald Giam asked why SMRT and SBS Transit were allowed to continue operating nine bus packages without a tender after their licenses expire, whether they benefit from service fees without fare revenue risk or competition, and when all 12 packages will be competitively tendered.
Lui Tuck Yew explained that the Land Transport Authority is gradually transitioning to the new bus contracting model, initially tendering three packages while retaining the current operators on nine to ensure a smooth transition and minimize disruption.
He noted that the nine packages will move to the government contracting model by August 2016, with contract durations varying and competitive tendering expected for more than half of the packages by the early 2020s.

Questions identified by AI (learn more)

Impact of Government's New Bus Contracting Model on SMRT and SBS Transit | PAPERCUTS

Impact of Government's New Bus Contracting Model on SMRT and SBS Transit

Debated in Parliament on 4 Aug 2014.

Summary written by AI (learn more)

Gerald Giam asked why SMRT and SBS Transit were allowed to continue operating nine bus packages without a tender after their licenses expire, whether they benefit from service fees without fare revenue risk or competition, and when all 12 packages will be competitively tendered.
Lui Tuck Yew explained that the Land Transport Authority is gradually transitioning to the new bus contracting model, initially tendering three packages while retaining the current operators on nine to ensure a smooth transition and minimize disruption.
He noted that the nine packages will move to the government contracting model by August 2016, with contract durations varying and competitive tendering expected for more than half of the packages by the early 2020s.

Questions identified by AI (learn more)

Full Transcript

Gerald Giam Yean Song

Lui Tuck Yew

Page: 112

Summary written by AI (learn more)

Gerald Giam asked why SMRT and SBS Transit were allowed to continue operating nine bus packages without a tender after their licenses expire, whether they benefit from service fees without fare revenue risk or competition, and when all 12 packages will be competitively tendered.
Lui Tuck Yew explained that the Land Transport Authority is gradually transitioning to the new bus contracting model, initially tendering three packages while retaining the current operators on nine to ensure a smooth transition and minimize disruption.
He noted that the nine packages will move to the government contracting model by August 2016, with contract durations varying and competitive tendering expected for more than half of the packages by the early 2020s.

Questions identified by AI (learn more)

Impact of Government's New Bus Contracting Model on SMRT and SBS Transit

Summary

Questions Identified

Full Transcript

Gerald Giam Yean Song

Lui Tuck Yew

Summary

Questions Identified

Impact of Government's New Bus Contracting Model on SMRT and SBS Transit

Summary

Questions Identified

Full Transcript

Gerald Giam Yean Song

Lui Tuck Yew

Summary

Questions Identified