Extension of Loyang Bus Package Contract Versus Retendering

Written Reply to Parliamentary Question

Ms Eileen Chong Pei Shan asked the Minister for Transport regarding Go- Ahead Singapore's contract for the Loyang bus package which provides a two-year extension option

a.          what procurement rules govern extending contracts beyond contracted options;

b.          on what basis was the contract extended from 2023 to 2026, and why it was not re-tendered then;

c.           whether it has been extended again, until when; and

d.          what is the fee for each extension.

Reply by Minister for Transport Jeffrey Siow

1.          The extension of bus contracts is governed by government procurement rules, and must be approved by the Land Transport Authority Board. There are many reasons why bus contracts are extended. This includes spacing out the number of tenders each year to ensure competitive bids; timing the tender with the relocation to new depots; and other extenuating circumstances like the COVID-19 pandemic.

2.          In 2022, LTA extended the Loyang bus package amidst significant COVID-19- related market uncertainty, as it could have resulted in operators pricing substantial risk premiums into their bids. Subsequently, developmental plans were finalised to relocate the Loyang bus package to the upcoming Lorong Halus bus depot in 2030. To avoid unnecessary relocation costs, LTA negotiated a further extension to 2030.

3.          Extensions are only offered if the incumbent operator’s performance is satisfactory. Terms are renegotiated with the operator and take into account prevailing operating costs and service fee benchmarks from comparable bus package contracts. Service standards for bus services in the package are typically also reviewed. We are unable to disclose the extension fees as they are commercially sensitive.