SINGAPORE -The Land Transport Authority (LTA) will take over SBS Transit's procurement contracts for new buses to be delivered in 2016 and 2017, as part of the new bus contracting model.

The contracts have a value of approximately $164 million, LTA said in a statement on Tuesday (Dec 29).

The transport authority will also buy 50 buses that were delivered to SBS Transit between June and December valued at approximately $23 million.

LTA will eventually own all operating assets such as buses, the bus fleet management system and on-board equipment in the new bus contracting model.

This transition arrangement allows LTA to build its bus fleet quickly, without incurring additional cost as the transaction is based on net book value, LTA said.

Under the bus contracting model, the government will own the assets of the two existing transport operators, SBS Transit and SMRT Corp.

Bus operators will then be contracted to run bus services through a tendering process that will introduce new entrants to the industry.

Foreign firms Tower Transit and Go-Ahead Group have been awarded the first two contracts.