Government contracting model for public bus industry
-
According to Straits Times on 18 March, the bid amounts are:
- SMRT Buses $93.7m
- SBS Transit $125.2m
- Tower Transit $125.6m
- Busways $127.8m
- Keolis $131.6m
- RATP ($141m implied) Lump sum $715.4m
- Woodlands Transport $145.9m
- Go-Ahead $153.5mDid not make shortlist: Aedge, Jinan, Jiaoyun-GSH.
Result expected to be released in April.
-
Originally posted by sgbuses:
Remember, LTA intends to use the winning bid amount as the basis to operate 80% of the remaining services with the incumbents.
The surprise is that the two incumbents turned out to be more competitive than its foreign counterparts.
I remember the wayangs long ago,They tried hard to impress the world that theyre open to competition but again its a long long same old story..After this Loyang SMRT might win again and Mandai goes to SBST..Wakakaka..If they guaranteed the two incumbents 80% of the route why bother to tender the 20% when the two giants can bid also?The 20% should let other companies bid la no matter what the cost right?
-
SMRT's bid amount seriously baffles me.
The winning bid amount is going to affect the amount of funds they will receive for all of their (and SBS Transit's) existing bus operations up to 2022!
“If I have a range of companies coming in, then I think we have a good bid, because I will be able to see the quality of submissions, and I will have an indication of the kind of prices that they will attach to their bids. This will be helpful to me, because beyond the tenders that are going out, I also have to negotiate on the remaining packages with the two incumbent operators. So, I am using this as a 'price discovery mechanism', in order to be able to carry out good negotiations in the future,” (Lui Tuck Yew) added. - from "Closing date of first tender under bus contracting model extended by two weeks ", Channel NewsAsia, 18 December 2014.
-
Originally posted by sgbuses:
SMRT's bid amount seriously baffles me.
The winning bid amount is going to affect the amount of funds they will receive for all of their (and SBS Transit's) existing bus operations up to 2022.
“If I have a range of companies coming in, then I think we have a good bid, because I will be able to see the quality of submissions, and I will have an indication of the kind of prices that they will attach to their bids. This will be helpful to me, because beyond the tenders that are going out, I also have to negotiate on the remaining packages with the two incumbent operators. So, I am using this as a 'price discovery mechanism', in order to be able to carry out good negotiations in the future,” (Lui Tuck Yew) added. - from "Closing date of first tender under bus contracting model extended by two weeks ", Channel NewsAsia, 18 December 2014.
Yeah bro,The biggest spoilt market..Even SBST doesnt bid that low..Desperados
-
operations wise, lower the better.
but in terms of wages and salary, it should at least be the same as what is being paid today.
now is really to analyse the costs components.
In my opinion, I feel that the proposal which makes the most economical sense should be the one that wins the contract.
-
Hi. I have a question:
the depots used in GCM. even if the incuments win them, they can only use the depots for the services designated by LTA. Am I right? or can they also run services which LTA did not assign to this depot?
-
Originally posted by JurongWestresident:
Hi. I have a question:
the depots used in GCM. even if the incuments win them, they can only use the depots for the services designated by LTA. Am I right? or can they also run services which LTA did not assign to this depot?
Tne answer would be covered under one of the clauses of the Bulim contract, which itself is under NDA. Provided one of the incumbents win, we should know the answer once the winner begins executing the contract.
-
As far as SMRT wins they can also park svc 61,172,852(If Budep decide to take few duties) or even svc 180 as long the 26 bus service fleets can parked there
-
Originally posted by JurongWestresident:
operations wise, lower the better.
but in terms of wages and salary, it should at least be the same as what is being paid today.
now is really to analyse the costs components.
In my opinion, I feel that the proposal which makes the most economical sense should be the one that wins the contract.
That is the case, in principle that is.
The bigger question actually looms - can the operators make good on their bids (i.e. actually make ends meet given these amounts proposed). its one thing to say "i can do it" and another thing to actually do it!!
By rule of thumb, the lowest bidder should get the bid; however the complications now arise because LTA/MOT is weighing the deliverables against the cost proposed. Surely SMRT's bid seems attractive, but whether they can balance the books (and more importantly, whether their promised standards justify the buck) at the end of the day is another question we wont know till it actually happens.
'economical sense' is a dangerously subjective term; maybe "value for money" is more suitable in this context.
-
Honestly, I do not understand. Why are we doubting them when they say they can deliver a certain service within a certain low amount of money?
Is the amount below market rate? If so, why is the bid not rejected?
In a similar context, when the government request for tender, there are instances where they reject bids that are too low. Not sure if it is land sales or another kind of product.
That's why I say they should analyse the components of the costs. If there are components that are below market rate, then perhaps the LTA should reject the concerned bid.
as in, market rate for products and services.
-
Originally posted by SexyMichael:
That is the case, in principle that is.
The bigger question actually looms - can the operators make good on their bids (i.e. actually make ends meet given these amounts proposed). its one thing to say "i can do it" and another thing to actually do it!!
By rule of thumb, the lowest bidder should get the bid; however the complications now arise because LTA/MOT is weighing the deliverables against the cost proposed. Surely SMRT's bid seems attractive, but whether they can balance the books (and more importantly, whether their promised standards justify the buck) at the end of the day is another question we wont know till it actually happens.
'economical sense' is a dangerously subjective term; maybe "value for money" is more suitable in this context.
from the way you say it, I feel that this is more of a trust issue. It's like you look down on SMRT, and even before execution, you already doubt its ability. #justsaying
-
If the bid go to SMRT or SBST mean LTA just put on a show to the public. Also SMRT might has indirect funding help from Temaske holding which it is the main share holders 60%. LTA should not allow both to bid for this tenders. until the old tenders is overed then allow
-
Originally posted by wsy1234:
If the bid go to SMRT or SBST mean LTA just put on a show to the public. Also SMRT might has indirect funding help from Temaske holding which it is the main share holders 60%. LTA should not allow both to bid for this tenders. until the old tenders is overed then allow
weird leh... so if the winner is the one with the highest bid, you will also come complain that LTA is wasting money... why pay so much when u can award to the lowest bid..
-
It is a difficult for LTA to draw lines in this matter. Our incumbants, SBST and SMRT have been running the show for the past 30+ years and no matter how much people might say they suck or whatsoever, lets not miss the point that they have been providing a decent public transport network in Singapore. Yes these days the buses and trains are so packed but it was not entirely their fault. Due to migration policies, our population has sharply risen over the past 10 years. Our incumbants have not had a easy jouney keeping up with these trends because they also need to buy new buses to add capacity, amidst the government's policy to move towards a full WAB fleet.
LTA probably wants to introduce a few foreign players in the market to give more competition and push our incumbants to a first world standard and rather learn what we are lacking in SIngapore. Their plan definitely is not to bring in new players and drive the incumbants out. So I would feel that it is logical that most of the contracts still go to incumbants. If we ourselves dont support our local incumbants, who will? Also tell me a country which contracts out majority to a foreign company and leave the leftovers for the local companies. Lets also not forget the fact that our incumbants know our local situation better. Lastly, foreign operators always have risks involved - If they screw up they can just drop and run...
So before saying LTA is putting up a show to the public etc., please understand the objectives of the contracting model. 1st contract highly likely will be incumbant because IMO LTA will play safe first and not do something risky that will make people criticise the whole GCM. Plus now incumbants have the lowest bids.
-
Originally posted by JurongWestresident:
from the way you say it, I feel that this is more of a trust issue. It's like you look down on SMRT, and even before execution, you already doubt its ability. #justsaying
seriously, no one know what kinds of service standard that SMRT have promised in its proposal.... so if 7 other operators are bidding at 125 mil and above and one particular operator bid 20 mil below, there should be some areas of big difference in the service standard... maybe SMRT is proposing only 10 maintaince staff, while other are using 20 or so.. nobody know...
weird that SMRT can bid so much lower, while in the past few years, its bus operation suffered higher losses than SBST with much lesser fleets and all the while operating lesser higher capacity buses.....
-
actually im also surprised by the disparity btw SBST and SMRT interms of the bidding cost... If there were a difference between incumbents and foreign operators, atleast I understand because there is a set up cost involved. incumbents wont have this issue.
-
Originally posted by sgbuses:
According to Straits Times on 18 March, the bid amounts are:
- SMRT Buses $93.7m
- SBS Transit $125.2m
- Tower Transit $125.6m
- Busways $127.8m
- Keolis $131.6m
- RATP ($141m implied) Lump sum $715.4m
- Woodlands Transport $145.9m
- Go-Ahead $153.5mDid not make shortlist: Aedge, Jinan, Jiaoyun-GSH.
Result expected to be released in April.
I hope they award it to SBS Transit because of the experience on these routes. Other alternative is Tower Transit. I would not give it to SMRT given they still have to improve their ops on existing services.
-
Originally posted by randomguy10:
actually im also surprised by the disparity btw SBST and SMRT interms of the bidding cost... If there were a difference between incumbents and foreign operators, atleast I understand because there is a set up cost involved. incumbents wont have this issue.
SBST would charge higher bcoz their maintenance and bus operations definitely better. SMRT operates like China duplicate many times.
-
If SMRT made the shortlist, then its bid should fulfil the basic tender requirements, at least on paper. The question is whether it can actually do the job in practice at a reasonable standard, while remaining financially viable. There are several reasons why their bid could be so low:
- SMRT is currently using part of Bulim depot and already has eqiupment and personnel set up there.
- SMRT plans to squeeze out as much revenue as possible from advertising on buses and shop rental at interchanges, and believes the extra revenue is enough to cover costs.
- SMRT has a much lower cost estimate for certain component(s), eg manpower, maintenance etc. We don't know the contents of the bids, but they must have convinced LTA that their cost estimates are reasonable for fulfilling the requirements if this is so.
-
My opinion is SMRT does stand a reasonably good chance at winning the Bulim contract.
The bid amount SMRT has given is a Godsend to LTA. The whole point of moving to GCM is to lower the costs of operations. A 25% reduction in costs is not unrealistic but it is better than the 20% cost reduction Transperth achieved back in 1993 during the initial period, when the Western Australian government moved to GCM. This level of reduction in costs may eliminate the need for the government to provide subsidy in operating Singapore's public buses.
SMRT also made high-profile changes in the last few years to demonstrate that they are a quality operator. They have launched double-decker buses, a new livery and branding, dedicated training processes (driving simulator), NEC Telemetrics, onboard next bus indicator, roadshows and carnivals. SMRT should have emphasized these initiatives in their bid. Factors that may hurt SMRT include the Chinese drivers strike, recent MRT/LRT breakdowns, and QoS results.
Both incumbents are giving the foreign operators a run for their money, which I deem to be a good thing. A foreign operator does not necessarily mean a better operator than the local incumbents. Our operating environment may be indeed unique in itself and the foreigners have yet to fully understand. A transition between local operators is a lot less painful process as well, and helps to set the first steps right in moving to the GCM.
-
Price is never the best indicator for winning the bid.
Unless price is the main component to evaluation.
Want to find out more? wait for results. Or work for LTA.
-
CIMB: Updates on the Bulim Package
https://brokingrfs.cimb.com/AtGEj78Hc2QLaVpML-pJFHAbypTSn_A7Bx2OuKbYJZekoQ45rwqn6wBnNwnCcApckkDmayJQw_o1.pdfWorld Bank-PPIAF: Area Contract Gross Cost Model (Finanical Considerations)
http://www.ppiaf.org/sites/ppiaf.org/files/documents/toolkits/UrbanBusToolkit/assets/3/3.3/35%28iv%29.html -
Originally posted by sgbuses:
CIMB: Updates on the Bulim Package
https://brokingrfs.cimb.com/AtGEj78Hc2QLaVpML-pJFHAbypTSn_A7Bx2OuKbYJZekoQ45rwqn6wBnNwnCcApckkDmayJQw_o1.pdfWorld Bank-PPIAF: Area Contract Gross Cost Model (Finanical Considerations)
http://www.ppiaf.org/sites/ppiaf.org/files/documents/toolkits/UrbanBusToolkit/assets/3/3.3/35%28iv%29.htmlI'd think that the contracting model we will be using in SG is considered Route Contract Gross Cost Model, no?
The difference between the two is that:
Area: Entire area is tendered out, bus operator has the power to design their own routes within the area and,
Route: Routes are designed for and by the authority and one or more of them are bidded/tendered as a group.
-
Originally posted by Bus Stopping:
I'd think that the contracting model we will be using in SG is considered Route Contract Gross Cost Model, no?
The difference between the two is that:
Area: Entire area is tendered out, bus operator has the power to design their own routes within the area and,
Route: Routes are designed for and by the authority and one or more of them are bidded/tendered as a group.
It can be argued this way as well, though I am more inclined to call it an area contract because of the natural monopoly it grants over a given area, especially for its feeder routes. The operator still makes itself known to the community within the area, i.e. you have to call the operator's customer hotline directly (not LTA) to make a feedback.
The concept of an area contract is made more obvious in Perth, where most areas of the city are served exclusively by one operator. In this case the Public Transport Authority does all route planning as well, but every new route would go to whoever was given the territory for that area. Therefore if you don't like the operator in your area, the only remaining option is for you to drive.
By comparison, London operates on route contracts as each route is individually tendered out and operators have the option to bundle them up if they wished to.
-
LTA livery spotted on a Mercedes-Benz 0530 Citaro bus.
April Fool!
