UK bus operator Tower Transit Group Limited has clinched the first tendered bus package from the Land Transport Authority (LTA) under the new Government Contracting Model, beating local players SBS Transit, SMRT Buses and Woodlands Transport and foreign operators from France, Australia and the UK.
Tower Transit, which runs about 650 buses in London and Cambridge with 2,000 employees, will receive a fee of S$556 million over the five-year contract period; if it does well, the contract can be extended by two years.
It will run the new Bulim Bus Depot and 26 bus services from the Jurong East, Bukit Batok and Clementi interchanges from the second quarter of next year, with implementation taking place in three tranches. Of the 26 services, SBS now runs 17 and SMRT, nine.
The depot will be handed over to Tower Transit in the second half of this year to give it time to recruit and train drivers and technicians.
With Tower Transit on board, commuters can expect higher service levels. All buses will run at intervals of no more than 15 minutes during peak periods, with at least half the buses running at intervals of 10 minutes or less.
Under the Government Contracting Model, LTA provides public bus services through competitive tendering for operators to run. Fare revenue goes to the government, and operators are paid a fee to operate the bus services.
Bus contracting injects competition to raise service levels, while leaving it to the government to be more responsive to changes in ridership and commuter needs, said LTA chief executive Chew Men Leong.
Tower Transit, which carries more than 115 million passengers a year in the UK, spent eight years here learning about the public transport landscape, said Neil Smith, chairman of Tower Transit.
National University of Singapore transport researcher Lee Der Horng told The Business Times that he hopes having a foreign operator will introduce innovative ways of running bus services, and that Tower Transit will use its overseas operations experience for the benefit of commuters here.
The tender for the Bulim package attracted 11 bids and closed in January; eight tenderers were shortlisted. Submissions were assessed on quality and price, with greater weightage given to quality.
Tower Transit received the highest combined score for quality and price. LTA said the operator showed a good understanding of ground conditions, was experienced in managing bus service reliability and had proposed a strict maintenance regime for bus assets and infrastructure.
In terms of manpower development, Tower Transit had comprehensive plans to attract and retain bus captains and to train new employees; it had also drawn up career-progression tracks for all levels of the more than 900 people it plans to hire here.
To make the bus driver's job more attractive to youth, women and people in mid-career, Tower Transit may offer flexible shifts, shorter work hours and training opportunities for eventual careers in logistics and shipping for its drivers.
Tower Transit group chief executive Adam Leishman said the company wants to create a people-centric bus system and would hire and train customer-service workers; some training may be done in Sydney, he said. Prof Lee pointed out that whether Tower Transit's recruitment plans can work out remains to be seen; it has to hire the number of drivers it needs, especially since it is a new player here.
Senior Minister of State for Finance and for Transport Josephine Teo, who chairs the Public Transport Tripartite Committee (PTTC), said a key priority during the transition is the welfare of bus captains, technicians and other bus workers. The tender adopts the guidelines on good employment practices issued by the PTTC, which spell out the obligations of both incoming and outgoing bus operators.
The National Transport Workers' Union (NTWU) said the employees are concerned about their employment rights, job security and welfare, so NTWU has set up a Bus Contracting Transition Committee to work with operators to ensure a smooth transition for workers.
SBS Transit's senior vice-president of corporate communications Tammy Tan told The Business Times that SBS was "naturally disappointed" at not winning the tender, but that it would work with LTA, NTWU and Tower Transit for a smooth transition to the Bulim package.
SMRT and Woodlands Transport could not be reached for comment.