Govt should explore open tender for rail projects

With the recent spotlight on the open-tender bus contracting model (“UK operator clinches first bus contract here”, May 8), one wonders if an open-tender system on a similar scale could be introduced for the rail financing framework introduced in 2010.

The tender for the first and most recent rail line to fall under the this framework, the Downtown Line (DTL), was of a restricted nature and open only to the two incumbent rail operators.

With the upcoming Thomson-East Coast Line, the impending expiry of the contracts for the East-West and North-South Lines in 2016 and 2019, respectively, as well as the ongoing negotiations on the rail financing model conversion for the existing MRT lines, now would be a good time to consider the merits and drawbacks of an open-tender model.

TODAY has previously reported on two examples of rail contracting in London (“Contracting model for London’s rail industry produces differing results”; June 14) — those of Metronet and Network Rail. The difference in the fates of the two operators is believed to stem chiefly from the risk-sharing allocation between the regulator and the private operator.

With appropriate management of the public-private partnership through a carefully-negotiated concession scheme, rail contracting through franchising, licensing or concessions can be viable. For example, despite initial teething problems, DTL operations have been stable in recent months, and the opening of future DTL stages along key trunk routes is likely to improve its viability.

We can take the current restricted-tender rail contracting model one step further by calling for open or semi-open tenders in future contract commencements and extensions. Many rail lines around the world are run by concessions that involve either an open tender or a two-phase semi-open tender: An open registration phase, followed by a competitive phase after shortlisting by regulators.

Examples include the Crossrail concession in Greater London and the metro concession in Stockholm, both run by subsidiaries of Hong Kong’s MTR Corporation; the Tri-Rail concession in Miami and the suburban rail concession in Auckland, both run by subsidaries of France’s Transdev (formerly Veolia Transdev) and the Spurt concession in the Netherlands along with several Czech Railway concessions run by subsidaries of Britain’s Arriva.

By opening our rail framework to external bidders, we gain the opportunity to emulate the best practices of some of the most reliable rail operators from around the world, while potentially achieving greater reliability in our rail network.

Through this experience, Singapore’s transport operators may themselves also become among the world’s most sought-after rail operators.