The Land Transport Authority (LTA) has received bids from 11 companies for its inaugural public bus contract, signalling strong interest in a business that has long been deemed to be barely profitable.
By the time the tender for the Bulim package of 26 routes closed at noon yesterday, four local companies and six foreign players had submitted their bids. There was also one joint bid from a local and foreign operator.
The local bidders are Aedge Holdings and Woodlands Transport, as well as incumbents SBS Transit and SMRT Corp. The foreign entities are Busways (Australia), Jinan Public Transportation Corp (China), Keolis (France), RATP Dev Transdev (France), Go-Ahead (Britain) and Tower Transit (Australia).
The joint venture is between local tour bus operator GSH and China's Jiaoyun Group.
Said an LTA spokesman: "All bidders will be evaluated based on the same set of criteria, such as quality factors and price, which will allow us to enhance the service levels of our bus industry and get the best value for money."
The Straits Times understands the winner will be announced in April, allowing the successful bidder about a year to prepare to start operating the Bulim package - named after a new depot to be built off Jurong West Avenue 2 - from as early as July 2016. Insiders reckon the five-year contract is worth around $100 million a year.
Woodlands Transport general manager Roger Wong said the company submitted its bid "on the belief that we have spared no effort and have put together a competitive, convincing and sustainable package".
Added RATP Dev Transdev Asia's bid director Mark Harbridge: "A high level of research has been carried out for the bid, and it has been put together by a large and experienced team."
Observers said the advantage may lie with the two incumbents as they know the cost structure and service requirements best. Even so, others said the threat of competition would have encouraged the two to make much more attractive bids than they would otherwise have. Chairman of the Government Parliamentary Committee for Transport, Mr Cedric Foo, has said a contracting model allows for "price discovery", where the true cost of providing a service is arrived at via competition.
While the tender evaluation is under way, The Straits Times understands the LTA is already preparing to put two more route packages up for bidding - one in Mandai and the other in Loyang.
Separately, SBS Transit and SMRT will have nine route packages to run when their current operating licences expire in August next year. When the nine expire in 2021, the two must jostle for rights to run them thereafter, like everyone else.