Jermyn Chow | The Straits Times | Saturday, Mar 16, 2013
SINGAPORE - The public bus sector may be open to competition from new players earlier than expected. The signal for this change came from
Transport Minister Lui Tuck Yew on Wednesday, when he hinted that other players may be allowed to bid for some bus routes run by SMRT and
SBS Transit, even before the pair's licences expire in 2016. Responding to Mr Cedric Foo (Pioneer), Mr Lui said he is studying carefully how to
move ahead with contestability for bus packages "to some extent", before current bus licences run out. Singapore will move towards a model
like London's, in which seven operators compete to run different packages of bus routes. "The challenge is in putting together packages of
routes with the supporting infrastructure like depots and interchanges that will support this contestability framework," he said. Packages must
also be "configured appropriately". Likewise for rail operations, Mr Lui said the Government is chugging along with liberalisation and has already
done so with the Downtown Line tender, which was awarded to SBS Transit in 2011. Under the new MRT operating and financing rules, SBS Transit
can operate the Downtown Line for only about 15 years. The Government also assumes ownership of operating assets, leasing them to the operator
for a fee that will go into a Railway Sinking Fund managed by the Land Transport Authority. The money will eventually go towards replacing assets.
For new lines like the Thomson Line, soon to be built, and the future Eastern Region Line, Mr Lui does not rule out the possibility of inviting foreign
players to bid. Going forward, existing rail lines, run by SMRT and SBS Transit, will also be tendered out. "How to do so... we will have to work out,
but we certainly hope to see some progress within the next two to three years." Responding to Dr Lily Neo (Tanjong Pagar GRC), he admitted the
Government would be open to legal challenges if it takes rail lines back before the operator's licence expires, unless "there is a proper negotiation
and an agree- able exchange by both parties". Referring to bus operations that have become less profitable, he said operators are "more than happy"
to return routes to the Government. "So the challenge indeed is actually how to have good and proper continuity rather than the returning of the routes."
