THE Government is likely to pump in more than the $1.1 billion it committed last year to beef up bus services.
In February last year, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam announced the Bus Service Enhancement Programme (BSEP) package, which will put 550 more buses on the road.
He described the amount, which included operating costs and driver salaries over a 10-year period, as a "one-off" measure.
But Transport Minister Lui Tuck Yew has told Parliament that the Government will contract out more morning-peak express services and shorter bus routes that feed into MRT stations.
"If successful, this will allow us to scale up the BSEP beyond the 550 buses that the two public bus operators are committed to implement and give us the resources to implement more new routes and other service improvements," he said last week.
Asked if this meant the Government was looking at expanding the bus budget to beyond $1.1 billion, a Transport Ministry spokesman said later that week: "We are exploring various options with regard to involvement of private operators.
"Beyond tendering some of the BSEP new routes to private operators to run, we are exploring their interest in new, shorter services that feed to MRT stations which could be outside of the current BSEP programme in time."
Meanwhile, the Land Transport Authority has put up a tender inviting companies to bid for a morning-express service from Jurong West to the Central Business District via the Ayer Rajah Expressway. In the evening, buses will depart from Central Boulevard for Jurong West.
The so-called City Direct Service will start in the third quarter. It is unique in one respect: The successful bus company will be paid a fixed sum - the amount of its bid - while the Government collects the fare revenue. In all public bus operations today, operators assume the revenue risk.
Woodlands Transport, the largest private transport operator here, said it will be bidding.
Its general manager, Mr Roger Wong, said the new operating model is more attractive because there is no revenue risk.
He said one reason previous attempts to rope in private companies to run fixed bus routes failed was the uncertainty of fare revenue. The other was that the prerequisites were too stringent.
"We will have to study the fine print before knowing how to bid," he said. "If we bid too high, we will not get it; if we bid too low, we might not make money."
Mr Lin Sing Sian, owner of Ric Tat Transport, said: "We're interested in bidding, but we don't have enough drivers. We've been advertising for over a year and still can't find (enough)."
Bedok Transport owner Lionel Lim agreed: "We can't find drivers because the job entails odd hours and it's not glamorous."
Transport consultant Bruno Wildermuth said Singapore should tackle the availability of drivers first before expanding the fleet. He said one way to attract more drivers would be to raise salaries.
Fares will have to go up in tandem, he added, but "politically, you can't raise fares when the service level is lacking".
Observers said the move to open the fixed-bus route market to private operators may rattle the incumbents.
But SBS Transit chairman Kua Hong Pak said: "SBS Transit has always tried its very best to operate as efficiently and effectively as possible and will continue to do so no matter how the industry is liberalised."
Stock analysts are not too worried about the move either. Nomura Singapore researcher Jay Chan said the incumbents "have significant scale advantage, which arguably gives them a cost advantage to smaller private players".