British operator Go-Ahead Group wins second Government bus contract

Mr Chew Men Leong (left), chief executive of LTA, shakes hands with Mr David Brown (right), group executive of Go-Ahead group.
Mr Chew Men Leong (left), chief executive of LTA, shakes hands with Mr David Brown (right), group executive of Go-Ahead group. ST PHOTO: ONG WEE JIN

SINGAPORE - The second government bus contract has been awarded to a foreign public transport operator, The Go-Ahead Group from Britain, with local incumbents SBS Transit and SMRT missing out yet again.

Go-Ahead will operate the Loyang package of 25 bus services in Pasir Ris and Punggol, including three new routes, in two phases from the third quarter of 2016. These bus services are currently run by SBS Transit. Go-Ahead will also manage the existing Pasir Ris and Punggol bus interchanges as well as the new Loyang Bus Depot. This will be handed over to the company in December.

Go-Ahead, which submitted the lowest bid of $497.7 million for the five-year contract with the possibility of a two-year extension, beat seven other shortlisted bidders, including three local companies, three other foreign players, and a Singapore-South Korea consortium.

In May, the first government bus contract for Bulim was awarded to London-based Tower Transit, which had submitted the third lowest bid.

The Land Transport Authority said it evaluates the bus contract bids on a two-envelope process, with quality having a higher weightage and being evaluated first before the price envelopes were opened.

Go-Ahead won by having the highest combined total score on quality and price.

Said LTA chief executive Chew Men Leong: "In terms of quality, the overall bids were actually closely matched. In fact, so closely matched that pricing of the bids became an important decisive factor."

This is Go-Ahead's first bus contract outside Britain, where it has a fleet of around 4,600 buses. It is the largest bus operator in London with a market share of 24 per cent and a fleet of 2,300 buses.

Go-Ahead said it will have 900 employees here and its operations are expected to generate total revenues of around $500 million over the five years.

Although Go-Ahead was the lowest bidder in the Loyang tender, it had submitted a bid $693 million for the Bulim contract, the highest among the eight shortlisted bidders.

Said Mr David Brown, chief executive officer of the Go-Ahead Group: "We have had longer to understand the market and risks. It's no more than a learning curve... to make sure we can still provide the quality that we are offering."

The tender for the Loyang bus package was launched on April 15 and attracted 10 bids. Eight of these were shortlisted in October.