May 22 (Bloomberg) -- Singapore is opening its bus services to more competitors in the second half to boost services and cut consumer waiting times.
Bus operators will bid for the right to run services based on the routes and standards laid out by the Land Transport Authority, which will pay the operators, the government agency said in a statement yesterday. SBS Transit Ltd. and SMRT Corp. are the two main bus operators, with their licenses expiring at the end of August 2016.
“This new industry model will enable the government to make public bus services more responsive to changes in ridership and commuter needs, as well as inject more competition into the industry,” the authority said in the statement on its website.
Singapore is trying to cope with a population that has jumped by more than 1.1 million since mid-2004 to about 5.3 million. The 1996 transport system white paper planned for a population of 4 million by 2030. A government report last year said the number of people on the island, less than a third the size of Luxembourg, may grow to 6.9 million by then.
Singapore is spending S$60 billion ($48 billion) on new subway lines and at least S$12 billion more on buses and highways to try to reduce congestion and allow for future growth. While those projects will roll out over the next 16 years, overcrowding and delays are beginning to affect the image of what is often considered a model city.
Under the new model, buses need to run at a minimum interval of 15 minutes during the morning and evening peak hours, with half of those routes reduced to less than 10 minutes, it said. It estimated that 45 percent of bus services will have shorter waiting times, it said.
Infrastructure such as bus depots, as well as vehicles and fleet management system, will be owned by the government under the new structure, it said. The city-state studied bus-contracting models in London and Australia in the past two years before the decision, it said.
Bus services in Singapore will be bundled into 12 groups, each comprising 300 to 500 buses, it said. The authority will offer five-year bus contracts starting from the second half for the first group, it said.
SMRT shares climbed 24 percent this year, while SBS gained 7.6 percent. The benchmark Straits Times Index added 3 percent.
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