Debate on Bus Services Industry Bill

The bus contracting model is now in its second year of implementation. Only two contracts have been awarded so far. It is too early to gauge whether this model will indeed drive greater cost efficiency and service quality for commuters, while keeping fares affordable. All stakeholders, including the government, should monitor this model closely over the next few years to assess its results. If it turns out that cost efficiency and service quality have not improved as a result of this model, the government should be prepared to explore different models, including having a government-owned National Transport Corporation take over the running of public bus services on a not-for-profit and cost-recovery basis, to ensure that service quality for commuters is not compromised.

Delivered in Parliament on 18 August 2015

Mdm Speaker,

The Bus Services Industry Bill seeks to regulate the provision of bus services, and the operation of bus depots and bus interchanges in Singapore. It also gives effect to the recently-introduced bus contracting model via a bus services procurement framework.

The Workers’ Party welcomes the government’s shift towards taking over the ownership of bus assets, the planning of bus routes and the setting of fares, while contracting out bus operations to the private sector. This will hopefully give the government greater control over the service quality and affordability of public transport, which is an essential public service.

I have a few queries on this Bill and the bus contracting model in general, which I hope the Minister can address.

First, on the maintenance and renewal of bus assets. Under this Bill, bus operators will be responsible for the maintenance of bus assets, which will be owned by the government but leased to operators. LTA’s lack of direct involvement in bus operations could result in information asymmetry between the regulator and the operators. Essentially, LTA may not have a full understanding of what is going on under the hood of bus operators, and hence may not be able to take the necessary regulatory or enforcement action should maintenance be lacking.

How will LTA ensure that bus operators conduct proper maintenance of these buses? How will LTA mitigate the risk that the buses may be poorly maintained or abused because the operators do not own them, resulting in shorter lifespan or more frequent breakdowns?

Which entity will be responsible for the renewal and replacement of essential operating assets when they approach their end of serviceable life?

The broader question on this issue is: How will the Ministry of Transport manage any possible conflicts between LTA and the operators, to ensure that there is proper accountability, so that disagreements between the two entities do not result in delays or failure to conduct proper maintenance and renewal of essential operating assets?

Next, on buses and crisis response. Currently, most public bus operators are also MRT train operators, and they can reallocate resources internally to respond to incidents like MRT breakdowns. This is likely to change in the future, with the bus routes eventually tendered out to different operators. How will LTA marshal bus resources from different operators to respond to crises like the massive MRT disruption we saw last July? Is there any provision in the bus operator contracts that state that operators must make their bus resources available to the government to respond to crises?

Third, I would like to ask about the transition between bus operators. The bus contracting model is likely to see more frequent transitions between bus operators. How will LTA ensure that the incumbents maintain high service levels as they transition out of areas where they will no longer be providing bus services? I am particularly concerned about manpower transitions that may affect service levels for the commuter.

Fourth, on the removal of the CEO of bus operators. Clause 19 requires bus operators holding a Class 1 bus service licence to obtain LTA’s approval before appointing, re-appointing or removing its CEO or board chairman, failing which LTA can issue a direction to reverse that decision. However, if a current CEO of a public bus operator is incompetent or unable to provide effective leadership to ensure the smooth operation of the bus services under their contracts, does LTA have any power to remove that CEO before the expiry of his or her contract?

National Transport Corporation

Madam, the bus contracting model is now in its second year of implementation. Only two contracts have been awarded so far. It is too early to gauge whether this model will indeed drive greater cost efficiency and service quality for commuters, while keeping fares affordable. All stakeholders, including the government, should monitor this model closely over the next few years to assess its results. If it turns out that cost efficiency and service quality have not improved as a result of this model, the government should be prepared to explore different models, including having a government-owned National Transport Corporation take over the running of public bus services on a not-for-profit and cost-recovery basis, to ensure that service quality for commuters is not compromised.

Finally, Madam, I would like to record my thanks to Minister for patiently answering all my PQs (Parliamentary Questions) and responding to my speeches on transport over the last 4 years, and I wish him all the best in his future endeavours.

Madam, I support the Bill.

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