SINGAPORE — The Land Transport Authority (LTA) is inviting SMRT Trains and SBS Transit to bid for a licence to operate the upcoming Thomson-East Coast Line (TEL) in a limited tender during the first quarter of next year.
The Government will bear the fare-revenue risk for the initial operation of the line while the operator will be paid a fee to run it.
This temporary financing model and licence will be for a period of nine years, with a possible two-year extension. Once the ridership stabilises and the licence expires, it would go back to the new rail financing framework (NRFF) for subsequent tenders, the LTA said in a press release on Friday (Nov 4).
This is because the TEL is the “most complex rail project to date”, and the NRFF that now covers some of the rail lines would “result in bids which are unfavourable to the Government, as the tenderers may factor in a significant risk premium”, it added. Under the NRFF, tenderers share fare revenue and cost risks with the Government.
Explaining why the TEL is “complex”, the LTA said that it would open in stages and is developed in tandem with many other projects.
