First Bus Package under the Government Contracting Model Up for Tender

News Releases 03 Oct 2014 bus depot Bus Service Enhancement Programme (BSEP) bus contracting bus tender

1. The Land Transport Authority (LTA) has put up the first bus package under the new Government Contracting Model (GCM) for tender today. Both local and foreign bus operators may bid for the right to operate the package, which will include 26 bus routes to be progressively implemented from the second half of 2016.

Scope of Tender

2. The 26 bus services will operate from three bus interchanges – Bukit Batok, Clementi and Jurong East; and terminate at five bus interchanges – Bedok, Boon Lay, Marina Centre, Shenton Way, and Toa Payoh. They will be supported by the new Bulim Bus Depot located off Jurong West Avenue 2. This package may start with about 380 buses leased to the successful tenderer (also known as the “Operator”) in 2016, before growing to about 500 buses in 2021, in tandem with expected ridership growth and the development of Bukit Batok West and Tengah New Town.

3. The contract is for a term of five years. If the Operator performs well, LTA can grant an extension to the term of another two years.

4. The tender specifications outline the responsibilities of, and scope of services to be provided by, the Operator, which include the following:

a) Operate bus services serving the Bukit Batok, Clementi, Jurong East and Jurong West areas (the “Bulim bus services”) under the specified performance standards;
b) Operate and maintain the buses and their onboard equipment (e.g. driver console and ticketing equipment) provided by LTA; 
c) Operate and maintain the Bukit Batok and Jurong East Bus Interchanges, and the new Bulim Bus Depot, including all equipment and systems provided therein;
d) Charge and collect the fares approved by the Public Transport Council, for travel on the Bulim bus services, on behalf of the Government;
e) Provide bus service information at all bus stops and bus interchanges served by the Bulim bus services; and
f) Provide customer management services, such as lost and found service, and a hotline for commuter feedback and enquiries.

Higher Service Levels

5. With the transition to the GCM, the Government intends to raise bus service levels above those of the expanded Bus Service Enhancement Programme (BSEP). 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 even shorter scheduled headways of no more than 10 minutes. Of these, the feeder services will run at even shorter intervals of 6-8 minutes. As a result, an estimated 45% of bus services will come at shorter intervals during peak periods when compared to the expanded BSEP.

Contract Evaluation, Payment and Variation

6. All tender submissions will be evaluated through a 2-envelope process for quality and price with more weightage given to the quality proposal submitted by the tenderers.

7. The Operator will be required to set up a local company to operate the Bulim bus services, with senior management overseeing its operations to be based in Singapore for better oversight and accountability.

8. There will also be provisions for additional bus capacity in the contract which will enable the Government to make expeditious adjustments to the Bulim bus services, when necessary, in response to changes in ridership and commuter needs.

9. During the contract period, the service fee which is the Operator’s bid price for the package, will be adjusted to better reflect the operating climate by taking into consideration inflation, changes in wage levels, and fuel costs.

10. Separately, the Operator will be able to tap the Bus Driver Training Grant1 for new bus drivers trained and deployed on the bus services from the date of award of contract to December 2016.

11. The Operator will be paid the service fee on a monthly basis with deductions for non-operated mileage that is within its control, such as driver absenteeism.

Incentive Framework

12. In addition to the contractual obligations, the Operator’s performance will also be assessed annually under an Incentive Framework to encourage it to provide quality bus services to commuters and carry out good maintenance of the assets provided by the Government. If the Operator meets the standards, it will receive a performance payment of up to 10% of its annual service fee. On the other hand, if the Operator does not meet the standards, up to 10% of its annual service fee will be deducted. The five performance indicators are in the areas of:-

(a) Bus service reliability, with indicators on Excess Wait Time and On-Time Adherence taking reference from the on-going Bus Service Reliability Framework pilot;
(b) First and last bus punctuality to ensure that commuters can board the first and last bus of the day;
(c) Maintenance of the buses provided by LTA;
(d) Maintenance of Bukit Batok and Jurong East Bus Interchanges, and Bulim Bus Depot; and
(e) Maintenance of the Bus Ticketing System.

Safeguarding the Welfare of Workers

13. Each new tender or change in contract for bus services can result in the movement of bus employees from one employer to another. To safeguard the welfare of the affected employees and ensure their smooth transition to the incoming operator, the Public Transport Tripartite Committee (PTTC)2 released the Guidelines on Good Employment Practices in the Public Bus Industry (the “Guidelines”) on 16 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 incoming operator.

14. The three key assurances proposed by the PTTC 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 have been enjoying before transition; and
c) Affected employees can choose to join the new operator or be redeployed by their current employer, where feasible.

15. These employee aspects of the Guidelines have been incorporated into LTA’s tender documents, and will also be included into LTA’s subsequent contract with the Operator.

Ensuring a Smooth Transition

16. 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 half of 2016.

17. The new Bulim Bus Depot will be handed over to the Operator in the second half of 2015, before implementation of the first tranche of bus services, to allow sufficient time for the Operator to build up its resources, such as recruitment and training of bus captains and technicians, for a smooth transition.

1 The Bus Driver Training Grant (BDTG), administered by LTA, is available to all incumbent and new public bus operators, to help attract more people to join the public bus industry. Leveraging on the Public Transport Workforce Skills Qualifications framework, the BDTG is meant to assist bus operators in the training of bus captains. The grant quantum is S$14,000 per bus driver for Singapore Citizens or Permanent Residents, and S$7,000 per bus driver for other nationalities. All public bus operators may apply for the BDTG which will be provided up to December 2016 and reviewed thereafter.

2The Public Transport Tripartite Committee (PTTC), chaired by Senior Minister of State for Transport Mrs Josephine Teo and comprising representatives from LTA, Ministry of Manpower (MOM), National Transport Workers’ Union (NTWU), SBS Transit (SBST) and SMRT, was established in February 2014 to provide a platform for engagement and consultation on policies that affect the public transport workforce. Amongst others, it oversees measures to safeguard bus sector employees’ job security and welfare during the transition to the GCM.

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