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Public Transport in Singapore

In: Social Issues

Submitted By veeshee
Words 411
Pages 2
http://www.termpaperwarehouse.com/essay-on/Financial-Analysis-On-Smrt/25773

THE tender to operate the 42km MRT Downtown Line is now open – the first designed to prevent public transport companies from slipping into complacency as far as customer service is concerned.

For starters, the Downtown Line contract is for only 15 years, down from the 30 to 40 years given to operators of earlier lines.

The operators of the Downtown Line will also have to lease operating assets such as trains from the Government. Under the old system, rail operators were given the initial set of operating assets, but had to foot the bill for replacement sets.

And unlike some previous tenders which were open to all interested parties, the new tender is open only to incumbent transport operators SMRT Corp and SBS Transit.

Tenders for future lines – such as the Thomson and Eastern Region lines – might be open to players other than the incumbents, including those from abroad. When the lease for the Downtown Line expires in 2032, another tender for an operator may be called.

Changes to the business model were mentioned in August, when Second Transport Minister Lim Hwee Hua told Parliament a higher level of contestability was still possible with just two players.

‘The issue here is really not about the number of potential players in the industry,’ she had said then.

‘Rather, the intent is to increase the level of competitive pressure in the industry by issuing shorter licence periods and ensure that the incumbent operator will have to face the prospect of competition at the end of their licence term.

‘The shorter licence period would also allow the Land Transport Authority, as the regulator, to reset and refresh licence conditions as appropriate.’

Both SBS Transit and SMRT confirmed yesterday that they had been invited to bid for the operation of the Downtown Line.

The multibillion-dollar Downtown Line – which links the Bukit Timah and eastern corridors to the Marina area – will be the third-longest MRT line since rail operations started more than 20 years ago. The North-South and East-West lines are 44km and 49km long respectively. Both are run by SMRT.

The driverless and fully underground Downtown Line will open in three stages from 2013 to 2017.

When fully opened, ridership on the three-carriage system – versus six-carriage for the older lines – is expected to average 500,000 a day. That is one-quarter of total MRT ridership today.

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