Gearing up for first public bus contract

Companies are bidding for the Bulim package, which will be the base of operations for 26 bus services. This is Singapore's first attempt at shifting the public bus industry to a contestable system in response to rising demand and expectations.
Companies are bidding for the Bulim package, which will be the base of operations for 26 bus services. This is Singapore's first attempt at shifting the public bus industry to a contestable system in response to rising demand and expectations.ST FILE PHOTO

More than 20 firms expected to submit bids, most of them foreign

Singapore's maiden public bus contract has attracted more than 20 would-be bidders, most of them foreign - from countries including Australia, Britain, China, France and Germany.

They will be up against "local boys" SBS Transit and SMRT Corp in bidding for the Bulim package - named after a new depot to be built off Jurong West Avenue 2, which will be the base of operations for 26 bus services.

Other local transport firms expected to join the fray include Woodlands Transport, which has been preparing to bid for two years now, and Travel GSH.

Travel GSH has teamed up with Qingdao Jiaoyun Group, a big transport provider in China's eastern province of Shandong.

The Straits Times understands this is to meet a tender criterion which states that only companies with a minimum fleet size of 250 can bid. Travel GSH has about 50 buses, mainly tourist coaches.

Travel GSH human resource manager Jonathan Ng said joining hands with Qingdao Jiaoyun had strategic benefits. "They're a big public transport company in China... (with) relevant experience which we don't have now.

"But we have better local knowledge, like manpower laws and traffic rules. We complement each other."

Australia's Busways has also been exploring a tie-up with a local partner. The New South Wales company was started by a bus driver in 1942 and prides itself on having an older, and happier, workforce. It has been in talks with various parties, including Trans-Cab, Singapore's second-largest taxi operator.

But Busways chief executive Richard Rowe told The Straits Times on Monday that his company is likely to bid on its own.

London's largest public bus operator, Go-Ahead, has set up a team to study the market and prepare for its bid. Group chief executive David Brown said results of its online survey of more than 500 Singapore commuters will give the firm a "unique selling point".

He said Go-Ahead staff have been taking buses along the contracted routes "every day" to learn the scheduling needs.

Other foreign firms eyeing the contract include Keolis and Veolia Transport RATP from France, and Australia's Tower Transit.

Meanwhile, smaller local players such as Tong Tar Transport Service and Bus Hub are giving the first contract a miss because of the relatively tight schedule. But both said they are keen to take part in future contracts.

These companies were among 22 which turned up at a recent Land Transport Authority briefing. The authority could not say how many will submit a bid by the tender's closing date of Jan 5.

Observers expect some bidders to ask for an extension to have more time to prepare.

"We're still waiting for several clarifications to the tender specifications," said one company.

The Bulim package is Singapore's first attempt at shifting the public bus industry to a contestable system in response to rising demand and expectations.

The Government will own fixed and operating assets, and bus companies will focus on meeting service standards - which are expected to be higher than those today - and keeping buses in good working order.

The new business model is expected to yield a net profit margin of 10 per cent or more - similar to what SBS Transit enjoys before depreciation, amortisation, interest charges and taxes.

christan@sph.com.sg

Additional reporting by Adrian Lim