The fourth tender to operate bus services under the government contracting model was called by the Land Transport Authority (LTA) yesterday.
The package involves 18 bus services with buses housed at the new Ulu Pandan Bus Depot in Boon Lay, expected to be completed next year. It is the first of 11 "negotiated" packages with the incumbent operators.
Last September, LTA agreed to pay SBS Transit and SMRT about $7.2 billion in annual instalments, to allow the two firms to run 11 route packages for between two and 10 years as part of a "gradual, phased approach" to tendering.
The newest package will serve Bukit Merah and the Central Business District with bus services operating from Bukit Merah, Harbourfront and Jurong East interchanges as well as Buona Vista, Marina Centre, New Bridge Road, Queen Street and Shenton Way bus terminals.
The winner of the tender will operate the buses for five years with a possibility of a two-year extension for good performance.
LTA added that the package will start with about 340 buses, growing to about 390 buses by the end of the contract, in tandem with new developments and projected growth in ridership.
Of the 18 services, 170 and 170A from Queen Street bus terminal and 160 from Jurong East's temporary interchange are cross-border services to Johor Baru.
Bus services will be progressively implemented in four tranches from the fourth quarter of next year, to give the incoming operator sufficient time to recruit and train bus captains and technicians, said the LTA.
Existing players welcomed the announcement.
Go-Ahead Singapore - which won the Loyang package in 2015 with a bid of $497.7 million - said that it will submit a "competitive and attractive bid".
Mr Tan Kian Heong, managing director for SMRT Buses and Roads Services, said the company "looks forward to the opportunity to participate in the Bukit Merah bus package", adding that the firm was "studying the tender requirements carefully".
Earlier this month, SBS Transit, the largest bus operator here, won the Seletar package with a bid of $480.3 million, to operate 26 routes from the Ang Mo Kio, Yio Chu Kang and Yishun bus interchanges.