SINGAPORE - The public bus industry will undergo a major shift in the way it is run starting from the second half of this year, in a move to improve bus services further.
On Wednesday, the Government announced its plans to overhaul the sector by shifting from the existing privatised model to a "Government contracting model".
Under this new model, the Land Transport Authority (LTA) will engage bus operators to run services through competitive bidding, determine the bus routes to be provided and set service standards. Operators will be paid a fee to run the services for a period of five years, while the Government bears revenue risk by retaining the fare revenue.
To make it easier for new players to enter the market and replace an incumbent operator, the Government will own all bus infrastructure such as depots, and operating assets including buses and a common bus fleet management system.
In a statement, the LTA said the new model, used in cities such as London and Perth, will allow it to respond more swiftly to changes in travel demand, promote greater efficiency among operators and lead to better bus services over time. The Government will continue to ensure fares remain affordable for commuters, it added.
Bus standards will be raised so all buses arrive at intervals of no more than 15 minutes during peak periods, and at least half of all buses arrive every 10 minutes or less with six- to eight-minute headways for feeder services. An incentive-penalty scheme to ensure buses arrive at reliable intervals will also be worked into the new contracts.
The LTA will gradually carve up bus routes here into 12 packages, with about 300 to 500 buses for each area. For a start, it will tender out three packages of bus services, with the first package up for bidding in the second half of this year.
SBS Transit and SMRT will run the remaining nine packages, which comprise about 80 per cent of existing buses. The LTA said both operators will run the packages under the new contracting model after their operating licences expire on Aug 31, 2016.
In the long term, the plan is to have three to five operators running buses here.
The Government first announced plans to make the bus sector more competitive in its 2008 Land Transport Masterplan. In 2012, it introduced a $1.1 billion programme to put hundreds of state-funded buses on the road and ramp up service levels.