SINGAPORE: The Land Transport Authority (LTA) will conduct a limited tender for the Thomson-East Coast Line’s operator licence in the first quarter of 2017, it announced in a media release on Friday (Nov 4).
Only SMRT Trains and SBS Transit will be invited to participate in the tender, LTA said, as the industry transition to the New Rail Financing Framework (NRFF) has not been completed, and because the first phase of the TEL’s operations are complex.
“The TEL is our most complex rail project to date,” said LTA. “First, it will be developed in tandem with multiple other projects. On its northern end, it will have an interchange with the future Johor Bahru-Singapore Rapid Transit System Link. On its eastern end, feasibility studies are ongoing for a connection with the future Changi Airport Terminal 5 and the existing Changi Airport MRT station. Second, the TEL will open in five stages over a number of year.”
As the projection of ridership and fare revenue in the train line’s initial years is more uncertain and challenging than earlier train lines, LTA said the Government will simply pay the successful tenderer a service fee to run TEL for its initial period of operations.
“The NRFF, where tenderers share fare revenue and cost risks with the Government and bid on the licence charge for the right to operate the train line, may therefore result in bids which are unfavourable to the Government, as the tenderers may factor in a significant risk premium,” LTA said.
It added that the first TEL licence will be awarded for nine years, with a possible two-year extension. By that time, LTA said it expects ridership along the line to have stabilised.
“Like the Downtown Line, North-South and East-West Lines, Circle Line and Bukit Panjang LRT, the Government will own and be responsible for expanding, upgrading and renewing the TEL’s rail assets, while the operator focuses on rail operations and maintenance,” LTA said.
The authoritiy added that the Government will revert to the NRFF for subsequent tenders after the first licence expires.
The TEL is expected to be completed in stages, starting 2019.
