Written Reply by Minister for Transport S Iswaran to Parliamentary Question on Likely Changes to Government's Bus Contracting Model

Miss Cheryl Chan Wei Ling asked the Minister for Transport with several bus contract packages up for renewal in next five years 

a.     whether there are likely impending changes to the bus contracting model; and 

b.     whether the electrification plans of public buses will affect the existing contracting model and on-demand bus services.

Reply by Minister for Transport S Iswaran:

1.     The bus contracting model was introduced in 2016 to make bus services more responsive to commuter needs and introduce more competition in the bus industry.

2.     We have made good progress in achieving these goals. The number of public transport operators increased from two to four. This increased competition has spurred operators to improve their efficiency, with average tender prices falling by 15% after five rounds of competitive tendering by LTA. We have also seen an improvement to bus service quality and shorter waiting times for commuters. Bus satisfaction levels have improved from 7.2 out of 10 in 2015 to 7.8 out of 10 in 2020.

3.     We have been refining the bus contracting model over the years. For example, as operators became more proficient in running bus packages, we raised the baselines of the Bus Service Reliability Framework to spur operators to become even more efficient. In 2019, we tendered out two packages together to allow operators to offer more competitive pricing. LTA will continue to review service levels and contractual provisions for future bus tenders to ensure that they remain relevant and sustainable.

4.     With the transition to cleaner energy public buses, such as hybrid and electric buses, LTA will be including the necessary provisions in the contracts for each bus package. Transition to cleaner energy buses can be smoothly integrated into the bus contracting model as we progressively retire our diesel bus fleet.

5.     The decision on whether to operate on-demand buses is a separate matter that will depend on the commercial viability of such a model. This is separate from the decision to switch to cleaner energy buses.