The Land Transport Authority (LTA) released its Land Transport Master Plan, in which it detailed its intention to introduce greater contestability in the public transport industry. Future rail lines will be issued shorter operating licenses, while the basic bus service market will “also be gradually opened up to allow competition for the bus market”, said LTA. This is done through competitive tendering for the right to operate a package of bus services.
Under the act, LTA will collect from operators a licence charge payable for the right to run and generate returns from the revenue service. The operator will lease operating assets such as trains and equipment from the Government.
The Workers’ Party sparks a debate after its manifesto suggested nationalising public transport. Many argue that this may not guarantee efficiency and will be a costly exercise for taxpayers.
"A nationalised public transport operator that depends on government funding and which operates on a cost recovery basis would have little incentive to keep costs down," says Transport Minister Lui Tuck Yew on a Facebook post.
The LTA announced that it has awarded the licence to operate the Downtown Line to SBST with a shorter license period. The operating assets will be owned by LTA. Licences will be shortened from the existing licences of 30-40 years to about 15 years.
"Our current model leaves the operations of trains and buses to commercial entities as we believe the long term public interest is best served this way," saysTransport Minister Lui in Parliament, while the Government announced it will pump in $1.1 billion as part of a Bus Service Enhancement Programme (BSEP).
The Govt explained why they don't nationalise the public transport operators to keep fares affordable on the Factually site.
The LTA announced plans to call a tender in December to invite private bus operators to bid for a new bus route named City Direct. The route will serve commuters travelling between Jurong West and the city, and will be rolled out in the third quarter of 2013. Private operators will be paid a fee to operate City Direct, and the fares collected will go back to the Government.
Mr Lui said in Parliament that all new rail lines will come under the contestability framework, while existing rail lines will also eventually come under this framework as well. He also reiterated that contestability in bus operations, in which the licences of both SMRT and SBST expire in 2016, is also on the horizon. “We intend over time to move to something like what they have in London, where there are seven operators contesting to run and operate different packages of routes,” Mr Lui said.
The LTA announced that new peak period short services will be rolled out in 2014 to reduce crowding. Part of BSEP, they are run by private bus operators and are designed to complement existing feeder routes.
The Government will roll out 450 more buses from 2015 to 2017, bringing the total number of Government-funded buses to 1,000. This will double the number of new bus services from 40 to 80.
First privately run feeder bus service began plying the roads in Woodlands.
LTA announced that three new City Direct bus services will begin operations in the next few weeks, joining 11 others were rolled out since late 2012. Services take commuters from housing estates to the Central Business District. About 10 more such services are in the pipeline.
The Government will embark on a bus contracting model in its latest bid to encourage greater contestability in the public transport industry.
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