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Operating Public Buses: Lessons from London

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Operating Public Buses: Lessons from London D2 SATURDAY INSIGHT SATURDAY, JUNE 14, 2014 SATURDAY, JUNE 14, 2014 INSIGHT SATURDAY D3 OPERATING Genesis of major shift in PUBLIC BUSES: Singapore’s bus system THE idea of a bus contracting sys- port, told Insight that several fac- was ready to run services, Mr Yeo sites in developed areas. This Lessons tem came up as early as 2006, tors held back the implementation said. “Because of the rail capacity move is to ensure depots would when the Government embarked of the new model. issue, we needed to introduce al- not be located in areas where bus- on a thorough review of the land First, the LTA introduced dis- ternatives quickly.” es had to ply long distances just to transport sector. tance-based fares in 2010 to elimi- Discussions on competition “re- get on their routes. It engaged international con- nate transfer penalties and ally sped up” while the $1.1 billion This major shift in adopting a sultant Booz Allen Hamilton to opened the Circle Line in stages Bus Service Enhancement Pro- part-nationalised model marks study how it could improve public from 2009 to 2011. gramme (BSEP) was being imple- the latest evolution in Singapore’s transport; and one of the sugges- It had expected demand for cer- mented, he said. As part of the bus system, which in the 1960s from tions was for a system where bus- tain bus services to change as a re- BSEP, the LTA started contract- had 11 unregulated private bus es bid for routes to run. sult, and wanted to wait for de- ing out bus routes to private opera- companies that controlled differ- The consultant was not the on- mand patterns to stabilise before tors last year, in a prelude to the ent territories. ly one who thought Singapore calling any tenders, he said. contracting model. Those companies merged into should adopt this model, which Then, when grouses about over- Last November, it engaged con- three firms in 1970 under a direc- has proven to be successful in cit- crowding on trains and a spate of sultant CH2M Hill to make a con- tive from the Government, and ies such as London and Perth. breakdowns happened in 2011, the testable bus model work in Singa- combined again in 1973 to form London Mr Cedric Foo, current and authorities’ priority quickly shift- pore. Singapore Bus Services (now SBS then chairman of the Government ed to solving those problems, The firm recommended that Transit). Parliamentary Committee for which they tried to do by pump- the LTA adopt a gross cost con- In 1982, Trans-Island Bus Ser- Transport, had also proposed carv- vices (now SMRT Buses) became ing up the island into regions, and the second public bus operator – Getting the public bus system right is no easy letting companies bid to operate the arrangement in place today. road. Private operators need to make money, in each region for a specified ten- Various experts told the LTA there would be The Government had received commuters want affordable fares and good ure. complaints about the SBS monopo- He made that suggestion then greater competition if barriers to entry were ly back then, and allowed a sec- service. Singapore is now looking to the London as the status quo of a duopoly was lowered... The LTA settled on owning the ond player into the market to in- solution of contracted routes. Is this the ticket unsatisfactory, he recalled. troduce some competition. “There were only two players buses, so potential operators would not have As for the new model, the big- to a better ride? (SBS Transit and SMRT), each op- gest challenge would be how to erating bus services for different to make that substantial investment. transition smoothly from one oper- By ROYSTON SIM ders to operate routes for a dura- parts of Singapore,” he said. ator to another, said Mr Yeo. One tion of five years, with a two-year “There was no competition, and I option the LTA is exploring is to LONDON resident Peter Smith extension for good performance. believe effective competition will further divide each package of may be 78, but he happily takes The contracts are termed quali- drive performance.” ing in $1.1 billion to put 550 more tract, where it keeps fare revenue routes into tranches for handover, the bus at least twice a week. The ty incentive contracts. Under The Government took heed – buses on the roads. and absorbs revenue risk, instead so a new operator does not as- retiree says the bus system has im- these gross cost contracts, TfL in its 2008 Masterplan, it outlined Planners also felt a logical time of a net cost contract, where the sume control of more than 20 proved since the switch from a sin- keeps the fares (as the LTA plans plans to have operators compete to introduce the sweeping chang- operator keeps the fares. routes in a single day. gle, nationalised operator to a con- to do here) and pays operators a for packages of bus services. Oth- es would be in August 2016, when Mr Richard Smith, transporta- This could minimise disrup- tracting model. sum to run services, but an incen- er major changes included making operating licences held by the two tion director with CH2M Hill, tions to commuters, and also give “The buses are much better tive-penalty scheme is worked in the Land Transport Authority bus operators, SBS Transit and said: “Gross cost is a useful model a new operator more time to hire than they used to be. There are to keep service quality high. (LTA) the master bus route plan- SMRT, expire. to start where there is a need to drivers if needed, he said. more of them, and they travel fast- Operators are paid about £4 ner in 2009. Finally, issues such as owner- bring about reform.” “We don’t underestimate the er because of the bus lanes.” million (S$8.4 million) to £5 mil- The rationale was that if it ship of bus assets and type of con- With a gross cost model, the scale of the challenges, and the London’s bus system is a suc- lion a year. An amount (£5 a mile, opened the market up to competi- tract for the new model had to be bidding process is straightfor- complexity of the issues. There cess – ridership has grown, ser- for example) is deducted for mile- tion, operators would be com- ironed out as well, Mr Yeo said. ward, he said. The model also al- may be hiccups along the way, but vice reliability has improved and age not operated for reasons such pelled to provide better service “You must have a set of specifi- lows the regulator the flexibility we’ll do our very best.” customer satisfaction is at a as bus breakdowns or staff show- and become more efficient – cations that can tell very clearly to change routes based on de- Mr Jaspal Singh, chief execu- record high. ing up late. Operators are not pe- which in turn could lower costs. what is going to happen through- mand, and better integrate bus ser- tive of London bus operator But it did not arrive at this nalised for traffic disruptions. Yet, it wasn’t until last month out the length of the contract,” he vices with train services. Metroline which is a subsidiary of state without several wrong turns Routes are typically tendered that the Government announced said. “If you have uncertainty, Various experts told the LTA SBS Transit’s parent group Com- along the way. in tranches of five to six, with it was ready to make the shift. you’re not going to get a cost-ef- there would be greater competi- fortDelGro, calls this latest move The experience holds lessons 15-20 per cent of the network ten- Why did it take six years? fective proposal.” tion if barriers to entry were low- “revolutionary”. for Singapore, where a gradual dered each year. Mr Yeo Teck Guan, LTA’s When the overcrowding on ered, Mr Yeo said. “The Government is formally change to contract-based routes However, until 1985, buses in group director for public trans- trains surfaced as a hot-button is- The LTA settled on owning the taking over responsibility and ac- awarded under a tender system London were run under a national- sue in 2011, the LTA had yet to de- buses, so potential operators countability for the provision of was announced last month, to ised model. cide if it should own the buses and would not have to make that sub- public transport,” he said. “If it is Since moving to a contracting model, raise the quality of service. That year, London Transport London’s bus system has seen depots under the new model. stantial investment. implemented the way London has Currently, licensed private op- (now known as TfL) started com- ridership grow, service reliability And even if tenders were called It also decided to own the bus implemented it... issues of reliabil- erators SBS Transit and SMRT petitive tendering to reduce the improve and customer satisfaction at that time to introduce competi- depots, to overcome the issue of ity and inadequate capacity will run public buses according to cost of providing bus services. reach a record high. tion, it would have taken a new op- land scarcity, as new operators be a thing of the past.” standards set by the Public Trans- Mr Simon Thomas, contracts ST PHOTO: ROYSTON SIM erator two to three years before it could have difficulty finding new ROYSTON SIM port Council.
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