In a Lianhe Zaboao article published on 17 April 2017, the Land Transport Authority (LTA) had intended to re-tendered several City Direct Bus Services nearing their contract expiry dates. However, owing to the high bids offered by Private Bus Operators, the LTA decided not to award these bids, and instead transferred the operations of these routes to Public Transport Operators (PTOs) SBS Transit and SMRT Buses.
Affected Bus Services
City Direct Bus Services 653, 655, 656 and 657 are being transferred to PTOs SBS Transit and SMRT Buses.
City Direct 653, taken over by SMRT Buses from 13 April 2017, was previously operated by ComfortDelGro Bus Pte Ltd. Its 6 morning peak trips were reduced to 4 trips, and 3 evening peak trips reduced to 2 trips. However, high-capacity double-deck buses were deployed to make up for the reduction in trips.
City Direct 657 will be taken over by SMRT Buses on 24 April 2017. It is currently operated by Transtar Travel Pte Ltd.
City Direct Bus Services were introduced under the S$1.1 billion Bus Services Enhancement Programme (BSEP) to benefit commuters travelling to the city with improved connectivity. A total of 22 routes were introduced, running one-way trips between residential estates and the Central Business District (CBD) during weekday peak hours.
These routes are tendered out to Private Bus Operators on a two-year contract basis.
Reasons for Transfer
The two-year contracts for City Direct Bus Services 653, 655, 656 and 657 had expired earlier this year, said LTA. At the time of the re-tender, LTA found that the tender prices from the Private Bus Operators were too high. Therefore, the contracts were not awarded.
As a result, LTA approached PTOs SBS Transit and SMRT Buses to ask if they were interested in taking over the City Direct routes. Both companies agreed to absorb these routes into their current bus contracts. The LTA will pay both operators based on the mileage travelled by buses on these routes.
For the four affected City Direct services, LTA negotiated an extended contract duration with their existing operators for an additional few months, to allow for a seamless transition to PTO control. When enquired by Lianhe Zaobao, LTA did not reveal the bid prices of the Private Bus Operators.
Industry experts interviewed by Lianhe Zaobao believe that the Government’s decision to purchase 1,000 buses will leave PTOs with enough resources to take over City Direct services. The awarding of City Direct routes Private Bus Operators was likely to have been a transitional move, and more City Direct services may be transferred to PTOs in the near future.
As explained by Professor Lee Der Horng of the National University of Singapore, Private Bus Operators are small companies which are unable to tap on economies of scale. As a result, their bid prices are necessarily higher to cover their operating costs. He added that commuters will not be inconvenienced if PTOs can provide a similar or higher level of service.
General Manager of Woodlands Transport (Bus Division) Roger Wong added that City Direct services were regarded as a short-term investment with few resources invested, the loss of which has little impact on the company. Woodlands Transport had allocated two buses to its City Direct 655, with a third reserve bus. It was awarded the route at the end of 2013 for over S$1.24 million.