1. The Land Transport Authority (LTA) has awarded the Thomson-East Coast Line (TEL) advertising operator tender to Asiaray Connect Ltd (Asiaray) and retail operator tender to a consortium comprising SMRT Experience Pte Ltd, JR East Business Development SEA Pte Ltd and Alphaplus Investments Pte Ltd. These two Non-Fare Operators (NFOs) will each be granted a 16-year concession when the TEL commences revenue service.
2. The TEL NFO tenders were called on 18 Jan 2019 and closed on 18 Apr 2019 with a total of 7 proposals from local and international companies. Tenderers were evaluated on the quality of their proposal, as well as their ability to grow the local non-fare business and generate more non-fare revenue from TEL advertising and retail spaces.
3. LTA has awarded the advertising operator tender to Asiaray. Asiaray is wholly owned by Asiaray Media Group, which has 25 years of experience operating in mainland China and Hong Kong with a strategic focus on airport and metro line advertising. For this tender, Asiaray received the highest quality score for their bid featuring a mix of digital and static media products tailored to each TEL station. Its digital media products also allow for the application of advanced technologies, such as video and data analytics, for dynamic and responsive advertisements that can adapt quickly to the fast-changing preferences of commuters. Besides the quality of its proposal, Asiaray also put in a competitive bid, with more than $140M in concession fees over the concession term.
4. The TEL retail operator tender was awarded to a consortium comprising SMRT Experience Pte Ltd, JR East Business Development SEA Pte Ltd (a subsidiary of East Japan Railway Company) and Alphaplus Investments Pte Ltd (an investment company of NTUC FairPrice Co-operative Ltd). The consortium’s proposal includes well-designed retail spaces with a thoughtfully curated tenant mix catering to commuters’ diverse needs (including Cheers convenience stores at several TEL stations). This will help to maximise the revenue potential of TEL retail spaces, with a concession fee of $24M over the concession term.
Pilot Framework to Outsource Non-Fare Business
5. This is the first time that LTA is outsourcing the rail non-fare business. We are encouraged by the strong market interest and quality of the bids. We expect this move to benefit commuters by improving the vibrancy of TEL stations. The award of the advertising operator tender to a company with core expertise in advertising will also inject new ideas and competition into the market.
6. Overall, the two appointed TEL NFOs are expected to bring over $164M in concession fees over the next 16 years. This will generate significantly more non-fare revenue per rider as compared to today, which will substantially improve the long-term financial sustainability of the TEL.
7. Given the promising outcome of this tender, LTA is now exploring how we can expand the outsourcing framework to other transport assets, in order to grow non-fare revenues further. This may include other rail lines, buses, bus interchanges, or road and pedestrian infrastructure.
8. The 43km TEL will add 32 new stations to the existing rail network, including eight interchange stations linking the TEL to all five existing MRT lines. Besides enhancing connectivity between the north, central and eastern parts of Singapore, TEL will strengthen the resilience of our rail network by providing alternative travel routes for commuters on other lines.
9. When fully operational in 2024, the TEL is expected to serve approximately 500,000 commuters daily in the initial years, with the figure rising to about one million commuters in the longer term.