LTA Awards First Tendered Bus Package to Tower Transit Group Limited

News Releases
8 May 2015

1.      The Land Transport Authority (LTA) has awarded the contract for the first bus package to Tower Transit Group Limited. Starting from the second quarter of 2016, Tower Transit, a bus operator from the U.K., will operate the new Bulim Bus Depot and 26 bus services from the Jurong East, Bukit Batok and Clementi Bus Interchanges. Tower Transit will get an estimated total fee of $556.0 million[1] over the five-year contract period.

2.      Tower Transit was set up in 2013 by shareholders of Transit Systems, which has operated public bus networks in Australia since 1996. Tower Transit has since seen steady growth in its London operations under a similar bus contracting model. It currently employs about 2,000 employees and operates about 650 buses in the U.K., carrying over 115 million passengers a year.

3.      Commuters can expect higher service levels as all bus services will have scheduled headways of no more than 15 minutes for both directions during the morning and evening peak periods, with at least half of them having scheduled headways of no more than 10 minutes. Of these, the feeder services will run at intervals of 6 to 8 minutes.

4.      Mr Chew Men Leong, LTA’s Chief Executive, said, “The award of the first bus package is a major milestone and marks a very exciting time for the Singapore bus industry. The restructuring of the public bus industry and the injection of more competition will bring about even higher bus service levels for commuters. With bus contracting, the Government will plan bus services and can thus be more responsive to changes in ridership and commuter needs.”


Evaluation Process

5.      The tender for the Bulim package was opened on 3 October 2014 and attracted 11 bids when it was closed on 19 January 2015. All tender submissions were evaluated based on the same set of criteria through a two-envelope process which included quality and price factors, with greater weightage given to the quality proposals submitted by tenderers. This two-envelope process allows LTA to raise the service levels of our bus industry and at the same time get the best value for money.

6.      Tower Transit, which had the highest combined total score for quality and price, was awarded the contract. In its tender submission, Tower Transit demonstrated a good understanding of ground conditions with proposed bus schedules that closely matched capacity to passenger demand, and with an optimal deployment of buses. The company has strong experience, through its operations in London, in managing en-route bus service reliability. At the same time, Tower Transit emphasised in its proposal a strict maintenance regime for bus assets and infrastructure, with a good bus-to-technician ratio and detailed tracking of maintenance activities and records. In terms of manpower development, Tower Transit has comprehensive plans to attract and retain bus captains, to train and develop new employees with support from experienced employees, and to offer career progression for all levels of staff.


Scope of Contract

7.      Under the contract, Tower Transit will operate 26 bus services[2] from the Bukit Batok, Clementi and Jurong East bus interchanges; and terminate at Bedok, Boon Lay, Marina Centre, Shenton Way and Toa Payoh bus interchanges. To ensure a smooth transition with minimal inconvenience to commuters, the implementation of the 26 bus services will be carried out in three tranches from the second quarter of 2016. These services will be supported by the new Bulim Bus Depot located off Jurong West Avenue, which will be handed over to Tower Transit in the second half of 2015 to allow them sufficient time to recruit and train bus captains and technicians.

8.      In addition to operating and managing bus services to specified performance standards, Tower Transit’s responsibilities include the following:

a)   Operate, manage and maintain the buses and their onboard equipment provided by LTA; 

b)   Operate, manage, and maintain Bukit Batok and Jurong East Bus Interchanges, and the new Bulim Bus Depot, including all equipment and systems provided therein;

c)   Charge and collect fares as approved by the Public Transport Council, on behalf of the Government, for travel on the bus services under the package;

d)   Provide bus service information at all bus stops and bus interchanges served by the bus services; and

e)   Provide customer management services, such as lost and found service, and a hotline for commuter feedback and enquiries.


9.      If Tower Transit performs well, LTA can extend the contract term by two years upon completion.


Safeguarding Welfare of Workers

10.    To safeguard the welfare of affected employees and ensure their smooth transition to the new operator, the Public Transport Tripartite Committee[3] (PTTC) issued a set of Guidelines on Good Employment Practices in the Public Bus Industry in September 2014, detailing the obligations and responsibilities of both incoming and outgoing bus operators. These include the timeline for the offer of employment, recognition of the length of service, employment terms to be safeguarded, treatment of affected bus industry employees including those who choose to stay with the outgoing operator, as well as training for those who choose to join the new operator.

11.    The three key assurances proposed by the PTTC have also been included into the contract with Tower Transit. These assurances are:

a)   All affected employees must be offered a job by the incoming operator;

b)   Affected employees must be offered employment terms which are not worse-off than what they had been enjoying before transition; and

c)   Affected employees can choose to join the new operator or be redeployed by their current employer, where feasible.


12.    Tower Transit will be applying to become a member of the PTTC as part of the company’s commitment to manpower development in the local bus industry.

13.    Senior Minister of State for Finance and Transport Mrs Josephine Teo, chairperson of the PTTC, said, “A key priority during the transition is the welfare and interests of bus captains, technicians and other bus workers. We look forward to the full support from both the incumbent and new operators during the transition, to minimise inconveniences to commuters and set the stage for higher service levels.”


Annex A: Factsheet on Tower Transit Group Limited and Transit Systems
Annex B: Details of the Bulim Package
 


[1] Excluding adjustment for inflation, changes in wage levels and fuel costs, service variation, and incentive payment during the contract period.

[2] The 26 bus services are: 41, 49, 66, 77, 78, 79, 96, 97, 97e, 98, 106, 143, 173, 177, 183, 189, 282, 284, 285, 333, 334, 335, 941, 945, 947 and 990.

[3] The Public Transport Tripartite Committee, chaired by Senior Minister of State for Finance and Transport Mrs Josephine Teo and comprising representatives from LTA, Ministry of Manpower, National Transport Workers’ Union, SBS Transit and SMRT, was established in February 2014 to provide a platform for engagement and consultation on policies that affect the public transport workforce.