Tower Transit edges out SMRT to win $1.03b Bulim and Sembawang-Yishun bus packages

The five-year contract for 56 bus routes will begin progressively from the second quarter of 2021. PHOTO: ST FILE

SINGAPORE - The Land Transport Authority (LTA) on Wednesday (Sept 30) awarded both the Bulim and Sembawang-Yishun bus packages to Tower Transit Singapore (TTS), with routes previously operated by SMRT now to be turned over to TTS.

The $1.03 billion, five-year contract for 56 bus routes will begin progressively from the second quarter of 2021, and is a gain for TTS as it expands its footprint in the transport landscape here.

Together with the bus services, TTS will also continue to manage Bukit Batok and Jurong East Bus Interchanges, as well as Sembawang and Yishun Bus interchanges, which were previously managed by SMRT.

The LTA said of the award in a statement: "TTS was awarded the contract for the combined package, because it received the highest total score, taking into account both price and quality factors in its proposal.

"TTS demonstrated an excellent understanding of the operational considerations and a strong commitment towards enhancing inclusivity and commuter experience."

The authority praised TTS' "strong competence" in bus service scheduling, its plans to hire more people with disabilities as "customer experience and inclusivity officers", its commitment to recruit more Singaporeans, as well as its plan to work with other agencies to help senior citizens and less mobile commuters be more confident about using Singapore's public transport.

Some 720 buses ply the routes in the two packages. The roughly 320 buses in the Bulim package ferry commuters in Clementi, Jurong East and Bukit Batok along 29 routes, and operate out of the Bulim depot.

It is already operated by TTS.

The Sembawang-Yishun package consists of about 400 buses plying 27 routes, and is now operated by SMRT.

The change in operator means that SMRT employees involved in these routes will be offered a job by the incoming operator, TTS.

Guidelines on good employment practices stipulate that TTS' employment terms cannot be worse-off than those set out in their current agreement with SMRT.

The tender, called in November last year, was the first time the LTA had concurrently called for tenders for two packages, which it said could achieve "economies of scale".

Operators had to bid for each package separately, but also had to submit an offer for a combined Bulim/Sembawang-Yishun package.

Under the bus contracting model, the Government owns all operating assets and collects fare revenue. Transport firms bid or negotiate to run route parcels for a fixed sum over a fixed period.

Singapore University of Social Sciences transport economist Walter Theseira said the final bids bore this aim out.

"It looks from the bids that TTS was able to promise this to a greater extent than some of the competitors... But all parties did incorporate a discount for the joint bid compared to the single bids," he said.

TTS bid about $482 million for the Bulim bus package and $582 million for the Sembawang-Yishun package, and $1.03 billion for the combined package.

SMRT bid $540 million for the Bulim bus package, $700 million for the Sembawang-Yishun bus package, and $1.19 billion for the combined package.

On TTS' almost doubling of their bus routes, SUSS transport researcher Park Byung Joon said it would have been a very different story if SMRT and SBS Transit had won, suggesting that it "would have been the end of bus tender in Singapore" and the return to the era of having only two bus operators.

"TTS is not and will never be in the position to compete with the two local giants," he said, adding: "TTS is going to be as big as what LTA is going to allow it to be."

SMRT, in response to queries, said it was disappointed at not being awarded the package, but will work with relevant agencies for a smooth transition.

The LTA can extend the contract term by another two years at the end of the five-year contract.

This article was edited for clarity.

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