Under the Bus Contracting Model, all bus routes in Singapore are split into 14 packages.
Currently, Tower Transit and Go-Ahead Singapore operate one package each. SMRT was awarded three negotiated packages, and SBS Transit will be operating nine packages (LTA calls tender for bus package involving 18 services; April 29).
Under the contracts, bus operators are responsible for operating and managing bus services in accordance with the specified performance standards.
They will charge and collect fares for the Government. The costs of bus operations are fixed by the contracts, and bus operators bear the subsequent changes in any cost, such as a diesel price hike.
As commuters, we are concerned about the financial state of these bus packages, as they could be the basis for any fare adjustment.
Could the Land Transport Authority give an indication of this, based on the contracted costs of the 14 bus packages and the expected fare revenue for each bus package?
Which packages are likely to generate a budget surplus and which ones will likely lead to a budget deficit and require a government subsidy or a fare adjustment?
Is the surplus from one package sufficient to offset the deficit of another package?
While ensuring bus services are more responsive to changes in ridership and commuter needs, the Land Transport Authority also has a duty to ensure that these bus services are operated efficiently and effectively.
A surplus is an indication that the bus services are being effectively managed.
Commuters and taxpayers should not have to bear the cost of any inefficiency in the management of the bus operations.
Lastly, the Public Transport Council has already begun reviewing the bus and train fare formula (Transport fare formula review amid hints of hike; April 6).
In considering any fare adjustment, the financial position of these bus packages should be taken into account.
Goh Kian Huat