SBS Transit appointed Downtown Line operator

SINGAPORE: SBS Transit Limited has been appointed the new operator for Downtown Line, Singapore's fifth Mass Rapid Transit line.

When completed by 2017, the Downtown Line's 34 stations are expected to serve about half a million commuters daily.

The Land Transport Authority (LTA) says the Downtown Line is the first rail line put up for competitive tender under the new rail financing framework LTA adopted in 2010.

Among other things, the licence period for the appointed operator is shorter - about 15 years, down from the existing 30 to 40 years.

And the LTA will own the rail operating assets and be responsible for timely replacements and enhancements.

In the case of the Downtown Line, the licence period is about 15 years from full completion in 2017, a few years after Downtown Line Stage One's targeted opening in 2013.

The LTA says the shorter duration will encourage efficiency through competition, as other operators may bid at the end of the licence term.

The appointed Downtown Line operator, SBS Transit Limited, will pay an annual licence charge over a 19-year licence period.

This payment is expected to reach an estimated total of S$1.6 billion at the end of the 19 years.

The payment will be placed in a Railway Sinking Fund to be managed by LTA to meet future expenditures on operating assets.

The LTA says the two local public transport operators, SBS Transit Limited and SMRT Trains Limited, both submitted competitive proposals to operate the Downtown Line.

It says SBS Transit Limited was picked after careful consideration.

SBS Transit is about 75 percent-owned by Singapore's biggest bus and taxi operator, ComfortDelGro.

The Downtown Line project was announced in 2005. It was later described as a major challenge.

LTA's project engineer, Darren Lau, had said: "The Downtown Line is currently one of the most challenging rail projects in Singapore, as it passes through varied soil conditions along the stretch. In certain areas like Bukit Timah, we even had to resort to using explosives to break up the granite rocks."

The Downtown Line was initially a five-station extension to the Circle Line. Known as Downtown Extension - running between Millenia Station and ending at Chinatown Station on the North East Line - it was expected to cost some S$1.4 billion and be completed by 2012.

But in 2007, the government approved S$12 billion worth of plans to add more than 40 kilometres to the existing mass rapid system.

The aim is to raise the number of those commuting by public transport to 70 per cent by 2020.

The Downtown Line will now have 34 stations in all - constructed over three phases.

Stage One involved the stations of the original Downtown Extension, running 4.3 kilometres from Chinatown to Bugis.

Work on Stage Two started in 2009, covering 12 underground stations over 16.6 kilometres.

When completed in 2015, Downtown Line 2 will run from Bukit Panjang, along the Bukit Timah Corridor and terminate at Rochor Station, where passengers can connect at Bugis.

The final 21-kilometre stretch of Downtown Line 3 will link the Singapore EXPO Convention and Exhibition Centre in the east to Bukit Panjang, with a loop through Marina Bay.




Personal View: This will more or less cause a upswing for the stock ComfortDelGro, do keep a lookout for it.