SINGAPORE, May 21 (Reuters) - Singapore said it would restructure the bus sector to a “government contracting model” to encourage more competition and ease operators’ capital expenses, a move that could lead to improved service to the public.
The measures will kick off from the second half of this year, Singapore’s Land Transport Authority (LTA) said in a statement on Wednesday.
The overhaul comes as Singaporeans complain of soaring living costs and an overcrowded transport system in one of the world’s most densely populated countries. Singapore discourages car ownership through hefty taxes, leaving most commuters to rely on trains and buses.
Its two bus operators - Comfortdelgro Corporation Ltd’s SBS Transit Ltd and SMRT Corporation Ltd - have reported losses in their core bus businesses, burdened by the high cost of operations.
“As part of the new bus industry model, the government will own all bus infrastructure such as depots as well as operating assets such as buses and the fleet management system,” the LTA said.
“This will lower the barriers of entry to the market, attract more bus operators and facilitate the transit from an incumbent to a new operator should the incumbent not win the tender upon contract expiry.”
Market talk of a new operating model has pushed up shares of SMRT by 41 percent over the past month, while SBS Transit has gained 19 percent and Comfortdelgro has risen 11 percent. (Reporting by Anshuman Daga; editing by Jane Baird)