SMRT beats ComfortDelGro in bid for Thomson-East Coast Line operation

SMRT's offer was 30% lower than SBS Transit's.

SMRT beat SBS Transit (SBST), a company where ComfortDelGro owns 75%, in a bid to operate Thomson-East Coast Line (TEL) for an initial nine-year period.

According to OCBC Investment Research, the TEL operator tender started in 17 February. Only SMRT and SBST were invited to participate.

The TEL will open in stages starting 2019.

According to the Land Transport Authority (LTA), SMRT won on both quality and price evaluations, offering a total service fee over nine years of S$1.7b, which 30% lower than SBST’s quote.

Here's more from OCBC:

In addition, we also note that LTA will outsource the TEL non-fare business (i.e. the commercial spaces and advertising spaces associated with its stations and trains) via a separate tender in 2018.

While the outcome of this tender does not affect our forecasts, it changes CDG’s outlook now that it has lost a significant growth catalyst.

In addition, with Grab’s aggressive promotion of car rental discount, we see further downside to our earnings forecasts should more than expected number of taxi hirers switch over to drive for Grab.