LTA to take over SBS Transit's contracts for new bus purchases

LTA to take over SBS Transit's contracts for new bus purchases

LTA will take over from SBS Transit existing contracts to buy buses scheduled for delivery in 2016 and 2017, as well as 50 buses recently delivered to the company.

Singapore buses depot
File photo of SBS Transit buses. (Photo: Ngau Kai Yan)

SINGAPORE: The Land Transport Authority announced on Tuesday (Dec 29) that it will take over existing contracts to purchase buses from transport operator SBS Transit (SBST), as part of the new Government contracting model for the public bus industry.

“In the new bus contracting model, LTA will eventually own all operating assets such as buses, the bus fleet management system and on-board equipment,” said the authority in response to media queries.

LTA will take over S$164 million of contracts for new bus purchases from SBST scheduled for delivery in 2016 and 2017. It will also directly buy 50 buses, worth about S$23 million, which were delivered to SBST between June and December this year.

“The transition arrangement will allow LTA to build its bus fleet expeditiously, without incurring additional cost as the transaction is based on Net Book Value (NBV),” said LTA.

SBST on Tuesday announced on the Singapore Exchange website that it had signed a Letter of Intent with LTA for the takeover of the contracts. The move will not have an impact on the net tangible assets per share and earnings per share of SBST for the financial year ending Dec 31, 2015, said the company.


Under the new contracting model, LTA will determine the bus services to be provided and service standards, and operators will have to bid for the right to run the services. The operators will be paid to run the services, while the Government will retain fare revenue. The Government will own all bus infrastructure as well.

British transport operators Tower Transit and Go-Ahead Group won the first two contracts under the new model. Tower Transit will run 26 routes serving the Bukit Batok, Clementi and Jurong East interchanges starting May 2016. Go-Ahead will operate 25 services from Changi Airport and Changi Village bus terminals as well as the Pasir Ris and Punggol bus interchanges.

The other nine packages will be run by the incumbent operators, SBST and SMRT, as negotiated bus contracts for about five years. Once these contracts expire, more bus services will be gradually tendered out.

Source: CNA/xq