SBS Transit retains Bukit Merah bus package, loses Jurong West package to SMRT

SINGAPORE - Transport operator SBS Transit will continue running the 17 bus routes under the Bukit Merah bus package but has lost the 26 routes under the Jurong West package to SMRT Buses.

The new five-year contracts for the two packages will start progressively from the second quarter of 2024.

The Land Transport Authority (LTA) announced the results of the tender for the two bus packages on Friday evening, nearly nine months after it was called in late November 2022.

The 17 bus routes in the Bukit Merah package serve Bukit Merah town and the Central Business District, and include two cross-border services to Johor Bahru. The buses use the Ulu Pandan Bus Depot.

SBS Transit will continue managing the Bukit Merah and HarbourFront bus interchanges under the new contract, which will start immediately after the current one expires in April 2024. It first won the contract through a tender in 2018.

The Jurong West bus package comprises 26 routes covering Jurong, Boon Lay and Tuas. They operate from the Soon Lee Bus Depot in the Jurong industrial estate.

In addition to the buses, services and depot, SMRT Buses will take over the Joo Koon and Boon Lay bus interchanges. It will start operating the package in September 2024.

Companies were invited to submit bids for the two packages individually or as a combined bid for both. All six firms that took part entered individual and combined bids.

The Straits Times reported previously that

two foreign firms looking to gain a foothold

here – Britain’s National Express Group and France’s Transdev Group – were among those that submitted bids.

There is an option for the two new contracts to be extended by two to five years at the end of their term in 2029.

The contracts have a combined estimated value of $890 million over the five-year period, before adjusting for factors such as inflation, change in wage levels and fuel costs.

LTA noted that the total price of the two individual winning bids was more attractive than the bid prices received for the combined package.

The authority used a “two-envelope” process where price submissions were considered only after the quality evaluation.

LTA said this approach ensured it “gets the best value-for-money proposal without compromising quality”.

SBS Transit and SMRT Buses received the highest total scores, considering price and quality.

Their winning bids were also the lowest for the respective packages, at about $476.5 million for the Bukit Merah package and around $411.5 million for the Jurong West package.

As part of their submissions, SBS Transit and SMRT Buses also included proposals to improve service delivery and environmental sustainability, and promote public transport use, LTA said.

It cited some examples: SBS Transit proposed the use of a self-service mobile concierge to improve customer service.

SMRT Buses suggested deploying an artificial-intelligence-enabled closed-circuit television system to identify commuters who need help.

Under Singapore’s bus contracting model, there are 14 packages of public bus routes bundled by geographic area.

Through a competitive bidding process, operators are appointed and paid to run bus services at standards that LTA sets.

LTA owns the buses and related infrastructure, plans bus services centrally and collects fare revenue.

In a statement on Friday, SBS Transit said it remains the largest public bus operator here with a market share of 55 per cent. After it hands over the Jurong West package, it will run 192 services under eight bus packages.

At present, SMRT Buses holds contracts for the Choa Chu Kang-Bukit Panjang and Woodlands bus packages.

On losing the Jurong West contract, SBS Transit group chief executive Jeffrey Sim told ST: “We are naturally disappointed at not being awarded the Jurong West bus package.

“We congratulate SMRT on their win and will work with them, the LTA and the union for a smooth transition of affected employees, whose well-being remains our key priority.”

LTA said that under the public bus industry’s guidelines on good employment practices, SMRT must offer employment to SBS Transit staff from the Jurong West bus package at terms that are not worse than present employment terms.

SMRT Buses managing director Tan Kian Heong said the company was “fully committed to ensuring a seamless transition for the affected workforce and assets”.