South Korean group eyes government bus contract

It teams up with local firm to bid in second tender

A SOUTH Korean conglomerate has teamed up with a Singapore shipping company to bid for the second government bus contract.

To bolster its bid, the 49:51 joint venture between Kumho Buslines and Tian San Shipping has roped in former UniSIM transport expert Park Byung Joon and Professor Kim Kwang Sik, who was involved in the acclaimed 2003 Seoul Bus Reform.

Kumho Buslines' deputy general manager (overseas business) Han Myung Ho told The Straits Times: "Prof Kim is very knowledgeable about bus reforms, and has been associated with the LTA Academy.

"Dr Park has lived here since 2002 and has a good understanding of the local public transport environment and culture."

The second bus contract - also known as the Loyang package, after a new depot to be built off Loyang Avenue - involves 25 routes serving areas in Punggol and Pasir Ris. Twenty-two of the routes are currently run by SBS Transit, with three new routes to be added.

Other operators such as Go-Ahead, Woodlands Transport, RATP Dev Transdev Asia and Keolis have also expressed interest in bidding for the contract in the tender, which closes on Aug 14.

Both SBS Transit and SMRT are likely to bid too.

All of them vied for the first contract, which was awarded to Anglo-Australian group Tower Transit last month.

Kumho Buslines, part of the diversified Kumho empire, did not take part in the first tender, but has been here since April to learn more about the business. "For customers to be happy and satisfied, a company's employees must first be happy and satisfied," Mr Han said. "From the looks of the working conditions, such as the drivers' canteen, I'm not sure that is so here."

Tian San business development director Mark Ko said: "In most cases, governments drive bus standards. But for Kumho, it developed its own fleet management system, maintenance system, human resource system. From what we've seen, its drivers are proud of their work, they wear their uniforms smartly, and they greet passengers."

The Loyang package will be Kumho's first government bus contract. It runs mainly express services in South Korea, China, Vietnam and Cambodia. In Gwangju, a province in south-western South Korea, its fleet of 450 buses controls 82 per cent of city bus services there.

Asked how confident Kumho is of clinching the Loyang package against competition from bigger and more experienced city bus operators, Mr Han said: "We're not intimidated by the size of other bidders. We have more than 2,000 buses in our total fleet, which makes us No. 1 in Korea. And as a group, Kumho is very big. The group actually started 70 years ago, with two taxis, and then buses."

Mr Han added that the fact that a foreign company clinched the first contract - and not with the lowest bid - is a "very positive sign". "At first, we were worried that the LTA (Land Transport Authority) would go for the lowest bid. Also, we thought it might not go for a foreign player," he said.

Meanwhile, Tower Transit, which reported last month that 600 people were keen to join the company, maintained that the response continues to be "very strong". Chairman Neil Smith said: "We're making progress appointing the key people."

A version of this article appeared in the print edition of The Straits Times on June 18, 2015, with the headline 'S. Korean group eyes govt bus contract'. Subscribe