Anticipating contracts model in our public bus industry

Pervertedboy SG

Christopher Tan (2013, December 1). Next step: Getting operators to vie for routes. The Straits Times. Retrieved from http://ride.asiaone.com/news/general/story/next-step-getting-operators-vie-routes

The Land Transport Authority is looking for consultants to study how to make Singapore's public bus sector more contestable.

The idea is to create a market where operators outbid each other to secure bus routes by offering the best possible service with the most competitive bids.

A regulator - in this case, the LTA - tracks service quality closely and awards bonuses or penalties when necessary.

This model has proved successful in cities such as London, Stockholm, Copenhagen, Seoul and Perth.

In a tender document posted on government procurement website GeBiz, the LTA said consultants will embark on a study to help it "better understand the processes, issues and key success factors of a contestable bus industry, and how these contribute to a quality, affordable and sustainable... bus system".

The winning firm is expected to start work in January and will have up to eight weeks to submit a draft report.

The LTA will return the report with comments in three weeks. After that, the consultancy will undertake further study, if necessary, and come up with a final report in another three weeks.

This means the final report should be ready by the second quarter of next year.

Dr Alexander Erath, a transport researcher at the Singapore-ETH Centre, said the key is to "find a good balance between competition and regulation that serves the public best".

"What matters most from a user's perspective is that the regulator has implemented an effective scheme to ensure service quality, for example, a system that incentivises operators to meet certain service standards."

Dr Erath added that it may be worthwhile for the consultancy to evaluate "an alternative network structure", since the current bus network was formed under different regulatory conditions.

Taking reference from cities that use the “contracts” model for its public bus industry, here are some things that we can expect:

How the public bus contracts may be like

December 2008. London: London Bus Services Ltd. Available through: Transport for London website (http://www.tfl.gov.uk/) [9 December 2013]

Possible problems

Jacob Saulwick, Amy McNeilage. (2013, 16 October). Berejiklian sorry as commuters in west hit by bus chaos after handover. The Sydney Morning Herald. Retrieved from http://www.smh.com.au/

Transport Minister Gladys Berejiklian has apologised to western Sydney commuters, and some HSC students, who were caught in delays this week after a new bus operator took charge of a large section of western Sydney.

Bus drivers were left to get directions from passengers after they were asked to drive routes they had never travelled on. Some drivers also ran services in bus models they had never driven before.

The Transport Workers Union, which represents private bus drivers, had warned that drivers had received too little information about the new routes.

Over the first three days of the new contract, which coincided with the start of the HSC, some of those warnings were borne out.

''We are experiencing problems, both in the morning and afternoon, with buses not turning up, drivers unsure of routes, students being left at bus stops and buses coming late and deviating from the timetable,'' said the principal of Cerdon College at Merrylands, Patricia Baker.

One driver, who asked not to be named, said he had been sent out to drive in a bus model he had never steered before.

The problems started on Sunday, when Transit Systems, a new operator in Sydney, took over a contract region that had been run by four companies.

Ms Berejiklian said the new contract would ultimately lead to better services for less cost to taxpayers.

As we anticipate contracts model in our public bus industry,

Do share with us your expectations here.

Meanwhile, if you come across articles regarding the bus contracts model, do also share them here.

sgbuses SG

Real competition must translate to performance-based monetary rewards and the pressure to maintain standards during the duration of the contract.

This means that on top of the fixed amount awarded in the contract, the winning bidder should be given incentives and disincentives to improve their services. In Perth for instance, patronage is used as a factor. QoS compliance, safety record and customer feedback/complaints level are also measurable targets suitable for implementing incentives and disincentives.

Contracts that are too long (more than 5 years) will NOT foster any real competition as the winning tenderer will have lesser incentive to improve their performance until the contract is up for re-tender (or cannot be bothered to bid again to retain the contract).

Of course, arguments aganist shorter contracts are expected. It translates to higher risk for companies that acquire long-term assets such as new buses and depots, and hence are unwilling to do so. This is especially the case for new entrants. There are two solutions to this problem (either or both can be used):

1. Leasing. LTA acquires the assets (new buses and depots) and then leases out the buses to the winning tenderer. This is practiced in the rail industry and the bus industry in Perth. LTA decides what buses to procure and it would not be too different from what BSEP is doing now as existing BSEP buses can be utilised for this purpose.

2. Allowing transfer of assets. Current regulations stipulate the buses purchased by bus operators must be first-hand. Allowing current assets including depots to change hands between bus operators when an operator replaces another gives new tenderers much more incentive to enter the industry. In Melbourne city, Transdev Melbourne took over 30% of the bus fleet from other bus operators that it won over from. Many of the bus drivers move along to the new operator as well. Colourful liveries and the company logo stickered over aside, disruption is minimized as operators switch hands. One way to avoid "colourful liveries" is for the government to adopt a single unified livery (as Perth has done, Melbourne and Sydney are following suit). However the current government is unwilling to undertake this for buses as this can lead to the public associating problems with public transport with the government more.

It is likely that bundled bids will occur for some contracts. This is especially true if multiple tenders are called together rather than separately. This is frequently the case in London.

Finally monitoring of standards should be done centrally and independently by LTA, not through self-reporting via the bus operators. I have seen incidents in Australia where empty, waiting buses are asked to leave the bus stop empty even when University students are forming long queues and struggle to board other buses just because the waiting buses are late and the operator is paid by trip milage.

Bus Stopping SG

To add on, some of the route redundancies caused by dual operators competiting against each other have to be firstly removed by route rationalisation before any tendering takes place.

It is highly likely as mentioned by sgbuses that bundled bids will occur, to prevent operators from cherry picking routes that are easier to operate. Remember that operators will be paid by a per trip basis (similar to current BSEP operations) with a profit margin instead of by farebox revenue. This would pretty much equalise the benefits amongst most routes.

As for monitoring of standards, LTA has tendered for a integrated bus info system with consoles installed on each bus, similar to what sbst has done. This would likely be installed on all future public buses and ready when the tender based system kicks in. I look forward to the data that this system can generate, and it could be a powerful way to gather traffic data to improve services.

Have a look at citydirect 651 for a current example of the tender system. This would likely be improved on for expansion to the rest of the public bus services. A difference is that CDG is using their own existing buses to operate. A question to be answer is if future PTOs can register buses used for public transport as Pte Buses(PA/B/C/H/Z). This makes a difference as they can also supplement their public transport income by making use of the additional buses to ply charter services after fulfilling their tender requirements (which SMRT and SBST currently cant).

^tamago^ SG

Why do I feel this is a lionnoisy clone...

Pervertedboy SG

Why do I feel this is a lionnoisy clone...

Who is 'lionnoisy'? Anyway, if you are wondering, I just started writing in forums last week. I am still settling down here and learning how to write posts in forums and how to make topics in forums. If I have irritated anyone, I would like to express my sincere apologies to them.

This topic (Anticipating contracts model in our public bus industry) was created because I feel that since Singapore is indeed switching to the Contracts model, it may be good if there is a topic created regarding this, as this is something that we are all excited about and there are many things where we can discuss about.

For instance, since the buses would remain in their respective corporate liveries rather than in a common LTA livery, there is an uncertainty on how the buses would be managed.

Since this is something new to Singapore, there is a lot to speculate and discuss about. If we go along this line (and also write about which bus routes would be cancelled due to duplication, which bus routes would be packaged with which, how existing bus services would be like if they were run by the other operator [eg. How a journey on a SBST service would be like if it is run by SMRT], etc.), without any interruption in the way, I believe this topic will be quite active and have a large number of posts.

SBS2601D SG

Why do I feel this is a lionnoisy clone...

Because you didnt bother to read what TS is typing!

lemon1974 SG

speculate again.... i think hor... 3 years later , nothing will happen or maybe all SMRT bus operation just hand over SBST.... LTA talk of review of the bus routes for so many years to see which one can be improve, and they did that to sv76/315/410 with some minor adjustment and CASE CLOSED... nothng much have been done at all, after spending money to review all the bus routes.... that time they even say want to split out all the long routes whatever so and will implement after review is done??

seem like at least 4-5 years have passed... nothing...... so far, they talk about so many things about bus routes/operation in the past, nothing have been done.. only for BSEP which they have no choice but to implement because of too many complains on crowded trains/buses...

sgbuses SG

To add on, some of the route redundancies caused by dual operators competiting against each other have to be firstly removed by route rationalisation before any tendering takes place.

Route rationalisation actually reduces competition and in turn any incentive for improvement. Furthermore route planners should be setting aside capacity in anticipation for future increase in demand by our population growth, and not simply planning in tandem with current demand as what it is happening now.

BSEP is part of the this forward thinking of setting aside capacity for future increase in demand. Otherwise there is simply no justification for the creation of 972, for instance, which duplicates a good chunk of 190.

Bus Stopping SG

Did not put enough explanation into the post and i apologize for that. Not all rationalisation will reduce competition (especially if PTOs are paid by per trip distance), the intention of such rationalisation is not to remove capacity, but to optimise routes to be more direct, with a single transfer point to allow onwards travel to variety of destinations. This may cause routes to be removed in order to be sustainable.

For example, routes like 85 and 965 can be combined by removing one of the service, but after the removal, more buses are provided on the combined service, and an additional service can then be introduced to restore capacity into the corridor by plying for example directly from punggol (looping the town itself) to jln kayu and beyond. Pax can then transfer onwards to yishun, woodlands quickly with existing services. This is better than changing the route of an existing service since it is clearer to the public.

And for 190, instead of having just 190 serving the heavily utilised orchard-whitney-stevens-pie-bke corridor, 972 is added (that is good), and there could be another service plying the same corridor but terminating at yewtee. Doing so allows the existing commuters travelling to yew tee to not take 190>302/307 but rather have a direct route and also requiring less resources since lesser passenger mileage is incurred. The frequency can then be balanced by adjusting the number of buses for each of the route according to the demand.

You may or may not agree, but I strongly feel that LTA has to improve capacity of bus services and provide more direct services (even with 1 transfer) in order to entice the public to use it for longer travel (and stop thinking that buses are just for feeders!)

sgbuses SG

If I have read your post correctly, you are talking about utilising the hub-and-spoke model for long-haul trips, as what Hong Kong is implementing with the Bus-Bus Transfer Interchange?

There are two issues to the hub-and-spoke model in the context of Singapore.

1. The public transport system as a whole is struggling under the feeder bus to MRT (and again to feeder) model. MRT becomes overcrowded and the capacity is at its limit because previous transport leaders have decided that forcing everyone through the MRT lines is the best idea by rationalising routes that duplicate the MRT.

2. Consequently, passengers who had a miserable experience with feeder to MRT are less likely to buy into another hub-and-spoke model, which is the bus-to-bus transfer model. This is especially given that the incentive to make transfers (and saving a few cents) is not great enough. The case of Hong Kong has potential because of the way the fare structure currently is, and hence a substansial rebate could be offered under their new scheme. This rebate is more or less negated under the distance fare regime. Furthermore, any irregular frequency or overcrowding of the connecting bus only serves to aggravate the passenger.

As for 190/972, that is the point-to-point model which should be looked at. Singapore needs more of these routes to take some load off the MRT lines. Generally, point-to-point model works best if many of the passengers originate from a single point (which is the city).

Demand alone should not be the only deciding factor, though! Nobody likes to change buses because a time cost is imposed on passengers. My previous bus route to University used to run directly into the city. When the planners decided to cut that off and impose a transfer, it easily added 30 minutes to my journey time. The excuse? Traffic jam. In turn, students queue up to give the transport representatives an earful during Q&A about this added inconvenience every time they visit the University to talk about their contactless smartcard!

TPS Timothy Mok SG

The topic is that -

The long bus routes will not be allowed to be introduced due to too much traffic jams.

We should apply some more tendering system (like extend for 10 years).

Bus Stopping SG

If I have read your post correctly, you are talking about utilising the hub-and-spoke model for long-haul trips, as what Hong Kong is implementing with the Bus-Bus Transfer Interchange?

There are two issues to the hub-and-spoke model in the context of Singapore.

Hmm, yes the idea is similar to the bus-bus interchange at tuen mun highway, but i would not exactly call it a hub-spoke model.

A typical hub-spoke model is one that sg already has, using trunks and MRT as long distance connections to hubs (interchanges), and connected by short distance feeders (short spokes). In an airline example, this is flying for 10 hours, followed by a 2 hours short flight. This is undesireable and not the idea that i am bringing across.

Instead this has very long spokes, and uses long distance services (which are direct) on both legs, with a single short and convenient transfer midway. For example, we can already do this at Jalan Kayu (Woodlands, Sembawang, Yishun, Khatib residents can take a direct bus there for a onward transfer to any of the locations served by the rest of the services towards the east). In an airline example, this would be flying a 6 hours flight, followed by another 6 hours flight, both are direct and the stopover is typically at a midway point.

Pervertedboy SG

Few weeks ago, I was at Toa Payoh and I happen to board bus 59, which took me directly to Tampines area, without transferring to the MRT. Probably because I stay in an area where there are hardly any bus routes similar to this, I was amazed at how fast the bus took to travel from Toa Payoh to Tampines. The travelling time was perhaps (much) shorter than if I was to travel on the MRT.

Actually, if there is proper planning, bus can be a (better) alternative to the MRT. Similar to what sgbuses mentioned, buses can help relieve the load off MRT and balance the load among the two modes of transport, therefore making public transport more comfortable and a better alternative to private transportation.

Whereas for the scenario mentioned by TPS Timothy Mok, where traffic may worsen as a result of having long bus routes, I believe it can be avoided if there is proper planning of bus routes (to avoid duplication, to mostly use the main arterial roads, etc.) and proper infrastructure(eg. Bus lanes, etc.) in place.

Meanwhile, in Sydney, Australia, their government announced today that they are redesigning the city’s “bus network to meet customer needs now and into the future.” (http://www.transport.nsw.gov.au/content/sydneys-bus-future).

(2013, December 12). Fares up and bus route changes for Sydney. News Limited. Retrieved from http://www.news.com.au/

Although not to the extent of having Bus Rapid Transit (that can be considered again in future when Singapore wants 13.8mil population), I hope that the Singapore government can take reference from Sydney and redesign our bus network in a way similar to how Sydney does it and have bus routes similar to bus 59.

Meanwhile, to avoid overloading the buses, there still has to be good bus connection to the MRT network, hence for the feeder bus routes,

Generally, the Public transport systems of Singapore are well designed. However, there are weaknesses here and there which can be worked on, such that the load is more equally distributed across transport modes and no mode is excessively loaded.

Anyway, be it MRT or bus, the fare is usually the same, thanks to distance fares, thus, the more the government should balance the human(commuters) traffic across the two transportation modes.