SBS Transit Faces Questions on Bus Contracts, Board Expertise Before AGM

The Securities Investors Association (Singapore) has raised concerns about public transport operator SBS Transit’s competitive position, board oversight, and financial sustainability ahead of the company’s April 23 annual general meeting, according to queries disclosed on the Singapore Exchange. The questions highlight pressure on SBS Transit’s dominance in the bus segment following mixed results in recent tenders and operational challenges in 2025.

Market Share Decline and Tender Performance

SBS Transit’s market share in the bus segment has slipped to approximately 57 per cent in 2024 and 2025 from around 62 per cent in 2022 and 2023, according to the disclosed information. The company now operates eight bus packages comprising 207 bus routes after losing two of the four most recent bus package tenders—Jurong West and Tampines—while retaining Bukit Merah and Seletar.

The Securities Investors Association (Singapore) questioned whether SBS Transit’s board had assessed why its bid for the Tampines bus package was unsuccessful despite offering a competitive price. The association also asked whether the board had directed management to strengthen its bid competitiveness ahead of the upcoming Serangoon-Eunos tender.

In response, SBS Transit stated that tender awards are based on a combination of quality and price, and that the winning bidder for Tampines achieved a higher overall score under the evaluation framework set by the Land Transport Authority (LTA). “Management continues to refine its approach to ensure future proposals will match LTA’s expectations,” the company said.

Electrification and Innovation Strategy

The Securities Investors Association (Singapore) sought clarity on SBS Transit’s ability to deploy and operate electric bus fleets at scale, given that electrification is now central to Singapore’s public transport strategy. The association asked how the group is investing to build expertise and differentiate itself in this area.

SBS Transit pointed to the Sengkang West Bus Depot—described as Singapore’s first large multi-storey electric bus depot—as an example of its capabilities. The company stated it is stepping up efforts in areas such as electrification and innovation.

Rail Financial Sustainability

The Securities Investors Association (Singapore) questioned whether SBS Transit’s rail operations can stand on its own financially. SBS Transit stated that its rail business is financially sustainable under Singapore’s rail financing framework launched in 2025, where the Land Transport Authority owns all rail operating assets such as trains and signalling systems, while private operators focus solely on operations and maintenance.

Under the new system, operators receive a fixed service fee instead of depending on fare revenue. SBS Transit noted that Singapore One Rail—a joint venture between SBS and RATP Dev Asia—will operate the upcoming Jurong Region Line under this model.

SBS Transit also stated it is not exposed to any financial penalties for two service delays that lasted over 30 minutes in 2025. According to the company, the Land Transport Authority “has ascertained that the root causes of the delays on the Downtown Line and North East Line were related to external factors beyond our control.” The company added: “The current reliability of our rail operations is benchmarked against leading global operators and our rail networks remain some of the most reliable in the world.”

Board Expertise and Oversight

The Securities Investors Association (Singapore) questioned whether the board is qualified enough to oversee a complex rail business, particularly in areas such as maintenance, engineering, safety, electrification, and emerging technologies including autonomous driving and artificial intelligence. The association also asked how the board ensures it can properly bring management to task if it does not have deep technical knowledge itself.

SBS Transit’s board responded that it looks at the team’s skills and experience as a whole, rather than whether each director is a technical expert. The board stated it relies on input from management, technical staff, and independent experts to provide oversight and ensure it makes informed decisions. A dedicated rail subsidiary board, which includes members with decades of operational experience, has been formed to support the main board in handling technical matters.

Sias president and chief executive David Gerald noted that such questions are meant to help shareholders and the board better understand each other and have more meaningful discussions.