Contestability in Public Transport Sector

Mr Cedric Foo Chee Keng asked the Minister for Transport (a) if he can provide an update on the Government's plans to introduce greater contestability in the public transport industry; and (b) how will these plans lead to better service levels and more equitable fares for commuters.

For the rail industry, we have introduced the New Rail Financing Framework (NRFF), starting with the Downtown Line. Under this framework, the Government, instead of the operator, would own all operating assets and the associated risks for major capital asset investments. This allows us to be more responsive to changes in demand and public expectations, and

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injects greater contestability in the industry by lowering barriers to entry. It will allow us to better work with the operators to deliver a high level of service for rail operations. As for the existing rail licences, over the longer term, we would like to transit both SBST and SMRT to the new framework.

For the bus sector, we have started to experiment with competitive tendering on a small scale, with tenders called for City Direct services and Peak Period Short Services. This has given us some room to raise bus service levels and help us consider doing more, larger scale competitive bus tendering in the future, as outlined in our Land Transport Master Plan. With competitive bus tendering, the right to run these routes is given to the bus operator best able to deliver the services specified by the Government at a cost-competitive price, enabling us to deliver better service levels at affordable fares. Separately, we are also working together with the PTOs to trial the Quality Incentive Framework in order to further improve reliability of bus services so that bus commuters can reduce their waiting times at bus stops. This will also help us incorporate a suitable quality incentive component when we embark on competitive bus tendering in the future.