SBS Transit

[greengiraffe]

I think the analysis on both SBS /SMRT cannot be too simplistic as government cannot be seen as bailing out both companies simply because they have been incurring losses.

For SMRT, their retail assets will have to be compromised somewhat in the restructuring exercise.

The entire exercise is likely to be a comprehensive restructuring exercise that the state will be accountable to tax payers.

If it is as simple as the obvious, then the elimination of losses via the migration to the new model will benefit the suffering companies at the expense of the tax payers.

In any event, the new platform will see more competition than the current duopoly which means that market share will decline substantially and operators being evaluated on new performance measures.

Since its a public good, its best not to try and make $ out of it as the trap doors are likely to be bountiful.

Odd Lots
Vested
Both

[pianist]

Try to think the govt as the ocean, whatever losing or winning stakeholders, the ocean will sweep and cure all. The previous failing transport model was I would say chiefly a govt' doings. So this is part of unwinding a existing route gone wrong for too long?

[freedom]

What non-sense. If not asked by the government to raise the frequency of the train and not to raise the price, the public transport service providers can survive on themselves without any problem.

What taxpayers are paying is to pay for their own privilege of lower transport price.

The public transport service providers don't own the government the business of their retail or advertising. That's the business they created, not the government. If those asset went back to the government, it would be remain idle instead of generating good benefit for all stakeholders.

The government can claim whatever it think its fair share, not the public transport service providers do not owe the government.

[opmi]

Their retail and advertisemnt is on govt leased land. The law is very clear on structures on leased land when the lease expired.

[pianist]

just managed to check the stock price tonite...mr market seems to like the story..re-rating sbs price to a whopping 1.6..

fully vested

[Ferns]

If the fares are going to LTA and SBS only earns the service fee, wouldn't that imply that there is limited room for growth? It doesn't matter anymore if the number of commuters increase or decrease right?

[CityFarmer]

Their retail and advertisemnt is on govt leased land. The law is very clear on structures on leased land when the lease expired.

The business needs both hardware and software to survive. Claiming back the hardware alone wouldn't work.

[CityFarmer]

More foreign PTOs are ready to come to Singapore. Good for local commuters, but not so for local existing PTOs...

(not vested)

Australian bus operator declares intent to enter ‘ideal’ S’pore market

SINGAPORE — A day after the Government announced the restructuring of the bus industry, an Australian bus operator yesterday declared its intention to enter the Singapore market, with plans already under way to set up an office here.

Tower Transit, which operates about 400 single- and double-deck buses in London, is among several foreign operators that are understood to be eyeing the route packages that the Land Transport Authority (LTA) will be putting up for competitive bidding in the coming years.

Its chairman, Mr Neil Smith, who is in town on a business trip, told TODAY the company hopes to set up shop in Singapore next month and is in the midst of assembling a bid team led by staff who will be transferred from London and reinforced with new Singaporean hires.

Mr Smith said it is the first time his firm is venturing into Asia. Singapore is an attractive option due to its stable environment and robust legal framework, he added. In fact, Tower Transit would be “reluctant” to enter most Asian markets, he said.

In deciding where to do business, the company targets what it considers to be “well-run and growing cities around the world”. In this regard, the Republic is “an ideal market for us to expand into”, he reiterated.

Still, Mr Smith said the difficulty of hiring bus drivers here — coupled with the Government’s strict foreign manpower regulations — could be a potential challenge for the company.

As a first step, he said Tower Transit would need to “establish a presence here very quickly” to understand the information that is required to put up a bid. It also needs to study the business environment and characteristics of the bus routes for which it is interested to bid, added Mr Smith.

Should the firm manage to win a contract, it will look into establishing the basic infrastructure to conduct business here, such as information-technology systems.

The LTA announced on Wednesday that, from the second half of this year, the Government would embark on a bus contracting model that would see operators bidding for a package of routes through competitive tendering.

Cities such as London and Perth have long adopted similar models. Tower Transit is a subsidiary of Transit Systems, which is also the parent company of Swan Transit, which operates about 500 buses from eight depots in Perth.

Other potential foreign operators that are believed to be eyeing bus routes here are joint-venture firm Veolia Transport-RATP Asia, French transport group Keolis and United Kingdom’s Go Ahead. These companies did not respond by press time to queries on their plans here. Joy Fang
http://www.todayonline.com/singapore/aus...ore-market

[opmi]

Their retail and advertisemnt is on govt leased land. The law is very clear on structures on leased land when the lease expired.

The business needs both hardware and software to survive. Claiming back the hardware alone wouldn't work.

what is the 'software'? a small retail mgt and advert team with probably less than 10 people. the 'software' is not proprietary. can just hire over or outsource if LTA wants to do themselves.

If not, LTA can tender the retail mgt to managing agents like PREMAS/Knight Frank etc OR tender to a master tenant. The advert can tender out like the bus stops to Clear Channel/JC Decaux. LTA done it before.

[specuvestor]

That's what I was thinking when Govt said to restructure the bus business. In the first place you cannot artificially introduce competition when there is no alternative, which usually is the case for public goods. Now that the Pandora's box is opened, will be interesting to see if the PTO cost is really competitive or others can do a better job. Agree with opmi that retail and advertisement should be part of package... govt would be dumb to lease those to you so that you can be a sub-landlord with no visible contribution to the system.

It's the same flawed idea of sale and leaseback. Looks good on ROE with asset light strategy but you lose control of your destiny when lease expires, unless of course you wanted out in the first place. 不是不报，只是时辰未到。 Sometimes flawed decisions have a long gestational period, especially government policies.

Having the operating assets taken back may not be a bright idea for PTOs on a long term strategic sense.

+------------------------------------------------------------------------------+

Singapore’s Bus Plan Attracts Local, Foreign Operators: Times
2014-05-22 23:47:46.456 GMT


By Kyunghee Park
May 23 (Bloomberg) -- Singapore’s plan to overhaul bus
system gaining interest from operators incl. Woodlands
Transport, Bus Hub and Tower Transit, Straits Times reports,
citing co. officials.
* Woodlands Transport General Manager Roger Wong sees
opportunity, would study tender
* Bus Hub Managing Director V. Anilan says he plans to bid,
awaiting details
* Neil Smith, chairman of Tower Transit in Perth, will set up
team to study market and prepare for tender
* NOTE: Singapore Opens Bus Market to More Competition to Cut
Wait Times {NSN N5XCGZ6JIJVU<Go>}