SHARES in Singapore Bus Services jumped by 24% on May 28 following the announcement that the firm had been selected by the Land Transport Authority to operate the island’s North East Line heavy metro now under construction. But shares in the rival Trans-Island Bus Services soared by 37% the same day on the news that the company had agreed to merge with the existing state-owned metro operator Singapore MRT.

LTA had offered the NEL concession to SBS and TIBS in order to encourage the development of rail operating expertise in a second company, which would allow comparison with SMRT’s performance on the existing network. In the longer term LTA envisaged that two multi-modal operators would emerge to allow competitive tendering of both bus and rail routes. As soon as SBS had been selected for the NEL, the way was left open for TIBS to merge with SMRT.

SBS is expected to make a loss on the NEL in the first year following opening of the line in 2003, but move into profit the following year as the housing estates at Punggol and Sengkang are completed. TIBS-SMRT will become the larger operator, with the immediate benefit of high earnings from the existing metro.

  • LTA Chief Executive Han Eng Juan unveiled last month a master plan for rail development in Singapore up to 2030. This includes radial routes from the city centre to Selatar, Jurong and Tuas along the south coast, Bedok, Tampines and Siglap on the East Coast, and Woodlands via Bukit Timah. LRT or intermediate-capacity orbital routes would link the radial corridors and serve new housing estates across the island.