Government to review rail operators' non-fare businesses

The Land Transport Authority (LTA) said it has called a tender "for a consultant to provide advisory services for the rail non-fare business".
The Land Transport Authority (LTA) said it has called a tender "for a consultant to provide advisory services for the rail non-fare business".PHOTO: ST FILE

SINGAPORE - The Government will review the current practice of automatically allowing rail operators to run non-transit businesses on MRT lines which they operate - a move which will have huge implications for SMRT and SBS Transit.

In response to queries from The Straits Times, the Land Transport Authority (LTA) said on Monday (Oct 23) it has called a tender "for a consultant to provide advisory services for the rail non-fare business".

This was in line with what it said last month when it awarded the operating contract for the upcoming Thomson-East Coast line (TEL) to SMRT. Then, it said it would be calling a separate tender next year for the line's non-fare business.

"This is a pilot initiative to optimise the use of commercial and advertising spaces in TEL stations and trains, so as to enhance the vibrancy and financial sustainability of the line," a spokesman said.

"In preparation for the tender, LTA intends to engage a consultant with the right expertise to advise us on the commercial arrangements, revenue framework, and the technical and operational specifications for the future non-fare operator," he added.

"The Government will carefully consider the results from outsourcing the TEL's non-fare business, and will conduct a thorough review before making any recommendations for existing rail lines."

According to SMRT's recent financial results, non-fare revenue and profit have outstripped those garnered by its rail operations.