Bus Contracting Model (BCM)

Continued from Page 1:

• Overview of  Bus Contracting Model
• Tendering Process
• BCM Route Packages
  • List of Bus Packages
  • Former Bus Package Terms

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Advantages of the BCM

The gross-cost contracting 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.

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.

Safeguarding employee welfare

Bus industry employee safeguards (Click to expand)

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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.

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.

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Contract Extensions

When choosing between a contract extension and a competitive tender, LTA considers several factors such as such as the prevailing market condition and impact to operations. This was revealed by a LTA spokesperson as part of an article by The Straits Times in December 2024.

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) — Extended by 1 year 10 months to July 2026
  
• 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.

The Sengkang-Hougang Bus Package originally ended in 2021 under the first negotiated contract term of the Bus Contracting Model with SBS Transit. In October 2021, the Negotiated Contract was revealed to be extended by 3 years by LTA from 2021 to 2024, in an article (Jury still out on Singapore’s bus contracting model, five years on) by The Straits Times. By August 2024, with no news pertaining to this contract, it is believed that this contract has been extended by LTA yet again for an undisclosed duration.

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.

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Dual-Depot Arrangements

To reduce dead mileage, some existing long-distance trunk services operated by SBST and SMRT are dual-depot controlled to reduce dead mileage; meaning that buses are dispatched from two depots instead of just one. SBS has been using dual-depot schemes since 1979.

In transitioning to the BCM, these practices have continued. For example, in the Bukit Merah Bus Package 1st Term (Contract PT203) awarded in February 2018, LTA accepted an Alternative Bid by SBS Transit which was lower than that of its submitted Base price, at $471.9 million versus $474.9 million. Similarly, for the Seletar Bus Package 2nd Term (Contract PT219) awarded in July 2024, SBS Transit was awarded the Alternative Bid, at $526.2 million versus $542.4 million.

This alternative proposal involves implementing dual-depot arrangements. For example, in the Bukit Merah Package based at Ulu Pandan Depot, some bus routes are garaged at other bus depots; for example, Services 57, 131 and 145 are partially garaged at Ang Mo Kio Bus Depot, while Services 5 and 16 are partially garaged at Bedok North Bus Depot. At the same time, non-Bukit Merah Package routes are also garaged at Ulu Pandan Depot, such as Services 10, 33, 80, and 151.

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Transition of Bus Services to BCM

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.

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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 continued to be launched by LTA under the Bus Contracting Model.

Some new bus services will be introduced under the Bus Connectivity Enhancement Programme (BCEP) from September 2024.

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)

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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.

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Bus Assets

Buses under the BCM are painted in a unified Lush Green livery. New buses would bear the “SG” prefix on their registration plates, with the first SG-plated bus registrations starting in November 2015.

Existing bus assets from SBS Transit and SMRT Buses were leased to the LTA. See also: Transitioning of Buses to the Bus Contracting Model.

Bus Purchases

The first new bus purchases under the BCM were add-on orders or variations of bus models procured by SBS Transit and SMRT.

• Volvo B9TL: 176 units
• Mercedes-Benz Citaro: 80 units
• MAN A95 (Euro V): 60 units in 2015, “Batch 2”
• MAN A95 (Euro V): 122 units in 2016, “Batch 3”
• Alexander Dennis Enviro500: 15 units

Subsequent buses were ordered in contracts listed below:

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.

LTA also 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. See also: Bus Models (LTA Trial Buses section).

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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.

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Advertising on BCM buses

Main article: Commercial 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 appoint an advertising and commercial partner responsible for sourcing, installing, maintaining, and removing advertisements.

ComfortDelGro’s advertising arm Moove Media manages SBS Transit, Tower Transit and Go-Ahead buses, while SMRT’s advertising arm Stellar Ace manages its bus adverts.

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. This also

However, certain exceptions have been made for non-commercial advertising, such as the 2022 Chingay50 advertising campaign, and other one-off campaigns. Additionally, 2D and 3D advertising concepts on single-deck buses remain permissible.

Future LTA consolidation

On 2 July 2024, the LTA issued a tender (Contract PT807 — Management of Advertisement Spaces on Buses and in Bus Interchanges), intending to consolidate advertising on public buses, as well as at bus interchanges and terminals, under a single agency.

According to The Straits Times, the tender will be awarded in the first quarter of 2025 and more details will be announced then.

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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)

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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

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