Bus Contracting Model (BCM)

The Bus Contracting Model (BCM), formerly known as the Government Contracting Model (GCM), is a contracting model for public bus services in Singapore.

First announced in 2014, and implemented on 1 September 2016, the BCM brought all public buses and related infrastructure (such as interchanges, terminals, and depots) under the ownership of the government. Under this model, LTA assumes the central role of planning bus services, while public transport operators bid for the right to operate the bus routes in a package.

Competitive Tendering

Bus operators are paid to run bus routes according to service standards set by LTA. The competitive tendering process fosters competition in the bus industry, encouraging operators to adopt a low-cost operating model while running a reliable bus service for commuters, with financial incentives awarded based on good performance. The model also encourages operators to invest in areas like recruitment, staff training, and enhancing the professionalism of the bus workforce.

Presently, there are 14 bus packages managed by four operators in Singapore: SBS Transit, SMRT Buses, Tower Transit Singapore, and Go-Ahead Singapore. The latter two entered the market following the implementation of the BCM.

In addition, the LTA has pursued a unified livery across all public buses in Singapore. Lush Green was chosen as the base colour, having been the preference of the majority of commuters through a public poll.

---

Comparison of Old and New frameworks

With the Bus Service Operating Licenses (BSOL) for SMRT Buses and SBS Transit expiring on 31 August 2016, LTA took the opportunity to revamp the bus industry into a competitive tendering process. Elements of the scheme were adapted from contractual schemes used in other regions, such as Transperth (in Perth) and London Buses (in London).

The following parts will explain how the BCM works. Alternatively, they are summarised in this video by the Land Transport Authority (LTA).

* = except for legacy SBS Transit and SMRT assets, like older buses and bus depots, which are leased by LTA from these PTOs

SBST/SMRT assets leased to LTA (Click to expand)

---

Bus Contracting Model (BCM) fundamentals

Under the BCM, bus operators are required to:

1. Lease operating assets from the Government as specified in the awarded contract.
2. Adhere to specified performance standards in operating their assigned bus services.
3. Operate and maintain the leased buses and onboard equipment (e.g., fare equipment and fleet management equipment) provided by the Government.
4. Operate and maintain the Bus Interchanges and new Bus Depots included in the Route Packages, along with all the equipment and systems provided within.
5. Collect and enforce fares approved by the Public Transport Council for travel on the allocated Route Package Bus Services, acting on behalf of the Government.
6. Provide bus service information at all bus stops and bus interchanges served by the Route Packages’ Services.
7. Offer customer management services, including lost and found services, as well as a hotline for commuter feedback and inquiries.

Additionally, an Incentive Framework is established to encourage operators to deliver quality bus services to commuters and maintain the provided assets effectively. If the operator meets the standards, it can receive a performance payment of up to 10% of its annual service fee. Conversely, if the operator fails to meet the standards, up to 10% of its annual service fee may be deducted. The framework includes five performance indicators covering:

1. Bus service reliability, incorporating indicators on Excess Wait Time (EWT) and On-Time Adherence (OTA) as per the Bus Service Reliability Framework.
2. First and last bus punctuality to ensure accessibility for commuters.
3. Maintenance of the buses provided by LTA.
4. Maintenance of the Bus Interchanges and Bus Depots awarded under the Route Packages.
5. Maintenance of the Bus Ticketing System.

Advantages of the BCM

The contract model, currently utilized in London and various Australian cities, serves as a model for LTA’s transportation systems. With this model, the government can directly subsidize bus operations to maintain better service levels, even if such levels are unprofitable.

The advantages of this system are:

• Enhances the Government’s capacity to swiftly address fluctuations in travel demand and service expectations.
• Allows bus operators to concentrate on running bus services and fulfilling service standards.
• Reduces entry barriers, fostering increased market competition that leads to the provision of better bus services in a cost-effective manner, benefiting commuters.

Commuters stand to benefit from:

• A more responsive system that adjusts to changes in ridership patterns and commuter requirements.
• Greater competition and efficiency within the bus industry.
• Improved reliability and service levels of bus services.
• Reduced waiting times between buses.

Safeguarding employee welfare

Each new tender or alteration in a contract for bus services may lead to the transfer of bus employees between employers. To safeguard the welfare of these affected employees and ensure their smooth transition to the incoming operator, the Public Transport Tripartite Committee (PTTC) issued the Guidelines on Good Employment Practices in the Public Bus Industry (the “Guidelines”) on 16 September 2014.

These guidelines delineate the obligations and responsibilities of both incoming and outgoing bus operators. They cover various aspects such as the timeline for offering employment, recognition of length of service, protection of employment terms, treatment of affected bus industry employees (including those opting to remain with the outgoing operator), and training for those choosing to join the incoming operator.

The PTTC has proposed three key assurances:

1. All affected employees must receive a job offer from the incoming operator.
2. Affected employees must be provided with employment terms that are not inferior to those they enjoyed before the transition.
3. Affected employees can opt to join the new operator or be redeployed by their current employer, where feasible.

These employee-related aspects of the Guidelines have been integrated into LTA’s tender documents and will also be incorporated into LTA’s subsequent contract with the Operator.

Higher Service Levels

With the transition to a bus contracting model, the Government intended to also raise bus service levels beyond those of the expanded BSEP.

As a result, an estimated 45% of bus services will have shorter intervals during peak periods when compared to the expanded BSEP service levels.

---

Tendering Process

LTA evaluates tender submissions using a 2-envelope process, considering both quality and price, with a higher emphasis placed on the quality proposals submitted by the tenderers. Tendering requirements include, among other criteria, a demonstrated track record of operating a fleet of at least 250 buses.

For example, Tower Transit was awarded the PT200 Bulim Bus Package (1st Term) despite submitting the third-lowest bid of $125.6 million per year, while SMRT’s bid was the lowest at $93.7 million per year. This suggests that quality considerations may have carried more weight than price in the decision-making process.

LTA awards route packages (tenders) based on a “Gross Cost Model.” The operator to whom the tender is awarded must establish a local company to manage the Route Packages, with senior management overseeing operations based in Singapore for enhanced oversight and accountability.

Provisions for additional bus capacity will be included in the contract, allowing the government to promptly adjust Route Packages as needed in response to changes in ridership and commuter needs.

Throughout the contract period (5-7 years), the service fee, which constitutes the operator’s bid price for the package, will be adjusted to better reflect the operating environment, considering factors such as inflation, changes in wage levels, and fuel costs. The Operator will receive the service fee on a monthly basis, with deductions for non-operated mileage under its control, such as driver absenteeism.

Additionally, the Operator can access the Bus Driver Training Grant for new bus drivers trained and deployed on the bus services, for a period of time after the contract award date.

---

BCM Route Packages

In August 2016, the Land Transport Authority announced the consolidation of bus services into fourteen route packages, each comprising approximately 300-500 buses. This number represented an increase from the initially planned twelve packages announced in 2014 with the inception of the Bus Contracting Model scheme.

The contracts for these services are set to run for five years initially, with the possibility of extension for another two years contingent upon satisfactory performance. Contracts awarded from 2023 onwards allow for LTA to consider extensions ranging from two to five years after the initial five-year term.

Initial 3 Tenders

The first three Tendered Contracts (TC) were for the Bulim, Loyang and Seletar Bus Packages, which were announced between May 2014 and June 2016. These packages were awarded to Tower Transit Singapore, Go Ahead Singapore & SBS Transit respectively.

These contracts also ushered in foreign operators Tower Transit and Go-Ahead into the local bus industry.

Full Transition: 1 September 2016

See: Bus industry completes transition to Bus Contracting Model | Land Transport Guru

Following the completion of negotiations with the existing operators (SBS Transit and SMRT), the remaining 11 packages not yet tendered out as of 2016 were extended for periods ranging from 2 to 10 years, commencing from 1 September 2016, marking the full transition of all public bus services to the BCM.

Under these BCM terms, also known as Negotiated Contracts (NC), the LTA prescribes service standards and retains all fare revenue. However, rather than buying over operator-owned assets, the LTA instead leases them from SBS Transit and SMRT. For instance, SBST/SMRT-owned buses are leased to LTA until the end of their 17-year statutory lifespan for a fee equal to buying over the bus at net book value as of 1 September 2016, to be paid over the remaining lifespan of the bus. At the same time, more LTA-owned buses would be leased to SBST/SMRT to meet service requirements where needed, including as replacements for retiring buses. LTA can also reassign these SBST/SMRT-owned buses to other bus operators wherever required.

In total, nearly S$7.2 billion was allocated to SBS Transit and SMRT Buses under the full transition to BCM. The 11 packages are designed to ensure that there will be no change in operators for the bus services currently managed by SBS Transit and SMRT Buses, and consequently, all employees of these companies were not impacted by the transition.

Upon the conclusion of these negotiated contracts, the bus services within these 11 packages will progressively undergo a tendering process. This phased transition approach enables LTA to refine and enhance contract management procedures, as well as the tendering and handover processes, while minimizing the risk of service disruption.

---

Bus Contracting Model – Timeline:

Notes:

• Owing to periodic contract extensions, the final duration of many ongoing bus contracts is subject to change.

---

List of Bus Packages

Contract references and periods reflect the current and upcoming term(s) only.

Notes:

• Due to periodic contract extensions, the ultimate duration of many existing bus contracts may vary.
• The bus depots and bus interchanges/terminals linked with each package are subject to change, and bus services could be added or removed at LTA’s discretion.
• Service fees provided to bus operators are determined by the awarded sums announced during the contract award. These figures may be adjusted due to inflation and changes in operating mileage resulting from LTA route amendments, new bus routes, or withdrawn bus routes that affect the total mileage covered.

Former Bus Package Terms

---

Contract Extensions

SBS Transit – Negotiated Contract Packages

In November 2021, LTA announced that the Downtown Line would transition to New Rail Financing Framework (NRFF) Version 2 starting in January 2022. As part of this agreement between LTA and SBST, SBST agreed to a revised service fee rate for five of its existing bus contracts that is lower than the current service fee and is benchmarked against recent bus tenders. The five contracts were also extended by an average of three years at these revised rates. [LTA Press Release]

These five bus contracts were not stated in the LTA press release but were revealed in an article from The Straits Times [Straits Times article]. The exact number of years extended for each affected bus package was also not disclosed.

• PT211 – Bedok Bus Package (originally ending in 2023)
• PT207 – Tampines Bus Package (originally ending in 2024)
• PT209 – Serangoon-Eunos Bus Package (originally ending in 2025)
• PT210 – Clementi Bus Package (originally ending in 2025)
• PT208 – Bishan-Toa Payoh Bus Package (originally ending in 2026)

In the SBS Transit Annual Report 2023, SBS Transit revealed that the expiry dates of the bus packages operated by the company range between 2024–2030, roughly consistent with the contract extensions revealed in 2021. It is not known if additional negotiated extensions have been conducted between 2021 and 2024.

SMRT – Negotiated Contract Packages

In September 2023, the Straits Times reported that SMRT’s Woodlands and Choa Chu Kang-Bukit Panjang packages were extended by three years until August 2026 [Straits Times article].

Tendered Contract Packages

Loyang Bus Package

Go-Ahead Singapore received a two-year contract extension in 2020 to operate PT201 Loyang Bus Package until September 2023.

In September 2022, a further 3-year contract extension for PT201 Loyang Bus Package was mentioned in a LinkedIn post by Louis Rambaud, Group Strategy & Transformation Director of The Go-Ahead Group plc, and later confirmed by The Straits Times. This was the first time a tendered bus contract had been extended beyond the stipulated contract duration of up to seven years.

Seletar Bus Package

In May 2022, SBS Transit revealed in a 1st Quarter 2022 Business Update that it had been granted a two-year extension for PT202 Seletar Bus Package.

Bukit Merah Bus Package

SBS Transit’s 2022 Annual Report mentioned that “the contract for the Bukit Merah Bus Package will end in April 2024”, implying a contract extension of 5 months, since the original PT203 contract commenced in November 2018 and was due to end in November 2023.

---

Changes to Bus Services

Under the direction of LTA as the primary bus planner, adjustments to existing bus routes and the introduction of new ones were made to meet the evolving needs of commuters. A full list of new bus services introduced by LTA can be found below.

An exception to standard service indicators applies to cross-border services due to the complex traffic conditions across the Causeway. Instead, these services are evaluated based on the revenue service mileage covered per day.

Basic-Plus Services:

Express and City Direct services remain unchanged.

The routings and operating hours of Fast-Forward services remain unchanged and were included in the route packages alongside the parent service, such as Bus Service 97e which was tendered as part of the initial Bulim Bus Package. However, the “Fast-Forward” branding previously used by SBS Transit was discontinued. The transition from “Fast-Forward” to “Express” branding was standardized in August 2018 and subsequently also dropped by SBS Transit.

Chinatown Direct, NightRider, Nite Owl, and leisure bus services 188R, 963R and 926, were initially retained under negotiated contracts in 2016. However, these were suspended due to the COVID-19 pandemic in April 2020 and formally withdrawn in June 2022.

Premium Services:

Public Transport Operators SBS Transit and SMRT gave up their remaining Premium Bus Services between 2016–2017 as LTA resources were focused on delivering public bus services. Some of the discontinued routes were taken over by private bus operators.

---

New Bus Services

Following the conclusion of the Bus Service Enhancement Programme (BSEP), which introduced 80 new bus routes between 2012 and 2017, new bus services would continue to be launched by LTA under the Bus Contracting Model.

Operators of these new services receive additional service fees based on the additional mileage of the new bus services.

New Bus Services introduced under BCM (Click to expand)

---

Rationalisation of Bus Services

Main article: Rationalisation of Bus Service Operations (2019 – 2024)

Under the BCM, the LTA assumes the role of a central planning agency and decides on bus services to be provided, and the service standards which operators have to meet. As part of this responsibility, public transport connections that are duplicitous or underutilized are rationalised to optimise the usage of resources and cut down on financially unsustainable services.

These efforts include the reduction of operating frequency or operating hours of certain bus services, or the merger and withdrawal of certain bus services that suffer from low demand. Larger-scale rationalisation exercises are also carried out following the opening of new rail lines.

Details of these bus rationalisations are detailed in the linked article above.

---

Takeover of SBST/SMRT buses

Main article: Transitioning of Buses to the Bus Contracting Model

Under the Bus Service Enhancement Programme (BSEP), the LTA acquired brand-new buses by tapping on SBS Transit and SMRT Buses’ ongoing bus procurement. This comprised SBS Transit Volvo B9TL and Mercedes-Benz Citaro buses, as well as SMRT Alexander Dennis Enviro500 and MAN A22 buses. Consequently, these Government-owned buses were identical to those already in operation with SBS Transit and SMRT.

Expanding the BCM bus fleet further, on 29 December 2015, the LTA announced its intention to take over SBS Transit’s bus procurement contracts valued at S$164 million, covering the purchase of 346 new buses slated for delivery in 2016 and 2017. Approximately 210 of these buses are scheduled for delivery in 2016, with the remainder expected in 2017. This comprised 100 Mercedes-Benz Citaro and 246 Volvo B9TL buses.

Additionally, the LTA directly purchased 50 buses, valued at approximately S$23 million, delivered to SBS Transit between June and December 2015. This comprised 12 Mercedes-Benz Citaro and 38 Volvo B9TL buses. The final tally of buses procured is slightly higher than the announced quantities, possibly reflecting additional buses procured.

• Volvo B9TL: 220 units under BSEP (SBS-plated) + around 359 units diverted to BCM (SBS+SG-plated)
• Mercedes-Benz Citaro: 305 units under BSEP (SBS-plated) + 167 units diverted to BCM (SG-plated)
• MAN A22: 169 units under BSEP (SMB-plated) + 49 units diverted to BCM (SG-plated)
• Alexander Dennis Enviro500: 116 units under BSEP (SMB-plated)

These early BCM buses were subsequently leased to Tower Transit and Go-Ahead as early entrants into Singapore’s bus contracting scene.

SG-plated buses

Under the BCM, new buses would bear the “SG” prefix on their registration plates, with the first SG-plated bus registrations starting in November 2015. All subsequent registrations of Government-owned buses since 2015 (and by extension, all new public buses effective 1 September 2016) bear the “SG” prefix.

As a result, Volvo B9TL, Mercedes-Benz Citaro, and MAN A22 (Euro V) buses diverted from existing SBS Transit/SMRT orders, which were still undergoing registrations at the time, were registered with SG-plates.

New Bus Purchases

LTA’s first new bus purchases under the BCM were either add-on orders or variations of existing bus models procured by SBS Transit and SMRT, and consequently, these buses were also identical or nearly identical to those already in operation with SBS Transit and SMRT.

Buses procured under LTA since 2015 for the BCM are:

• Volvo B9TL: 176 units (on top of the previously-mentioned takeover of SBST purchases)
• Mercedes-Benz Citaro: 80 units (on top of the previously-mentioned takeover of SBST purchases)
• MAN A95 (Euro V): 60 units in 2015, “Batch 2” (last 10 units featured USB Charging Ports)
• MAN A95 (Euro V): 122 units in 2016, “Batch 3”
• Alexander Dennis Enviro500: 15 units

LTA’s 176 additional Volvo B9TL (Batch 4) units were registered SG5000E–SG5175J, forming the first SG-prefix registered buses as part of the Bus Contracting Model. It also increased Mercedes-Benz Citaro (Batch 3) orders, buying 80 more buses.

In addition, LTA also procured 60 units of the MAN A95 in 2015 (SG5740C – SG5799J), the last 10 of which were equipped with USB Charging Ports, making them the first batch of public buses to feature USB chargers.

The following year, in September 2016, another batch of 122 MAN A95 buses (SG5800M – SG5920A & SG2017C) were purchased, alongside a smaller batch of 15 Alexander Dennis Enviro500 buses (SG5700T – SG5714D).

Bus Procurement Contracts

In 2017, LTA purchased MAN A22 (Euro VI)—100 units—and MAN A95 (Euro VI)—150 units—in a closed tender awarded to Singapore Technologies Kinetics Ltd (Contract PT337 – Procurement of 250 MAN Buses). An additional 150 units more MAN A95 buses were added to this order, for a total of 400 buses.

In July 2018, 111 units of MAN A95 (Euro VI) buses were procured under a competitive tender (Contract PT322 – Procurement of Euro 6 Double Deck Diesel Buses) awarded to ST Engineering Land Systems.

In October 2017, LTA procured 50 units of Volvo B5LH diesel-hybrid buses under Contract PT313 – Procurement of Diesel Hybrid Buses (DHB), awarded to Volvo East Asia (Pte) Ltd.

In October 2018, LTA procured 60 electric buses under Contract PT323 – Procurement of Electric Buses (E-Buses), awarded to 3 tenderers.

• BYD (Singapore) Pte Ltd – 20 Single-Deck Electric Buses (BYD K9 / Depot slow charging)
• ST Engineering Land Systems – 20 Single-Deck Electric Buses (Linkker LM312 / Pantograph fast charging)
• Yutong-NARI Consortium – 10 Single-Deck & 10 Double-Deck Electric Buses (Yutong E12 and Yutong E12DD / Depot slow charging)

In April 2019, LTA procured 100 three-door double-deck buses under Contract PT342 – Procurement of 3-Door Euro 6 Double Deck Diesel Buses, awarded to 2 tenderers.

• Alexander Dennis (Services) Singapore Pte Ltd – 50 3-Door Double Deck Buses (Alexander Dennis Enviro500 (3 Door))
• ST Engineering Land Systems – 50 3-Door Double Deck Buses (MAN A95 (Euro 6) – 3-Door Batch)

In November 2023, LTA procured 360 three-door electric buses under Contract PT601 – Procurement of single deck electric buses, awarded to 2 tenderers were awarded.

• BYD (Singapore) Pte. Ltd. – 240 3-door single-deck electric buses (BYD B12)
• Cycle & Carriage Automotive Pte. Ltd. (partnered with Zhongtong Bus) – 120 single-deck electric buses

Non-LTA-owned buses

Four BYD C6 midibuses are leased by Tower Transit from BYD (Singapore) for use on Bus Service 825, the only public bus service in Singapore operating using shorter-length buses. These buses, registered as PC7991M, PC8561P, PC8656A, and PC8669M, are the only public buses with private bus number plates.

Moreover, LTA accepts trial buses from various bus manufacturers seeking to evaluate their buses on revenue service. Trial buses are identified by SG40xx-series of bus registration numbers and are typically operated for 12 months.

A full list of LTA trial buses can be found in the Bus Models article (LTA Trial Buses section).

---

Refurbishment of Buses

As the owner of all bus assets, the LTA is also responsible for the mid-life refurbishment of its buses. In June 2023, a tender was called to appoint a contractor for the refurbishment of 630 buses between 2023 and 2025, comprising both single- and double-deck buses.

Refurbishment works entail the replacement of bus seats, floor covers, sealant for the bus windows and windshields, and components for the bus door system. These works would take place between 2023 and 2025.

---

Advertising on BCM buses

Main article: Advertising on Bus Contracting Model Buses

Within the framework of the BCM, operators retain the advertising revenue generated from assets like buses and bus interchanges. Typically, bus operators engage an advertising and commercial partner responsible for sourcing, installing, maintaining, and removing advertisements.

The LTA imposes limitations on bus advertising wraps, permitting them to cover only the rear two-thirds of the bus, thereby ensuring the visibility of the operator logo on the front portion. However, certain exceptions have been made for non-commercial advertising, such as the 2022 Chingay50 advertising campaign. Additionally, 2D and 3D advertising concepts on single-deck buses remain permissible.

---

LTA News Releases (References)

1. Transition to a Government Contracting Model For The Public Bus Industry  (24 May 14)
2. First Bus Package Under The Government Contracting Model Up For Tender (03 Oct14)
3. Second Bus Package under the Government Contracting Model to Be Put Up for Tender in Second Quarter of 2015 (11 Mar 15)
4. LTA awards first tendered bus package to Tower Transit Group Limited (08 May 15)
5. LTA to take over SBS Transit’s contracts for new bus purchases – Channel NewsAsia
6. Over 600 public buses to be refurbished by LTA, first such exercise since contracting model, Singapore – THE BUSINESS TIMES (23 Jun 2023)

• LTA on Facebook (We Keep Your World Moving)
• Bus Industry to Complete Transition to Bus Contracting Model on 1 Sep 2016

Back to Bus Articles