Retail shops on the Thomson-East Coast Line (TEL) will be curated and managed by a consortium group, the Land Transport Authority (LTA) announced on Aug. 27.

New operators to run advertising and retail

The consortium comprises SMRT Experience Pte Ltd, JR East Business Development SEA Pte Ltd and Alphaplus Investments Pte Ltd.

JR East Business Development SEA Pte Ltd is a subsidiary of East Japan Railway Company which runs several high speed rail lines and regular regional lines in Japan.

Alphaplus Investments Pte Ltd is an investment company belonging to NTUC FairPrice Co-operative Ltd.

Separately, the advertising operations on the TEL will be managed by Asiaray Connect Ltd.

It is owned by a media group which has 25 years of experience operating in mainland China and Hong Kong.

First time outsourced to non-rail operators

This is the first time the non-fare operations on the rail lines have been outsourced to non-rail operators.

Currently, all retail and advertising operations on all rail lines (excluding the TEL) are managed by their respective rail operators.

SMRT Trains is the operator of the TEL.

According to LTA, this move will improve the vibrancy of TEL stations and ultimately benefit commuters.

The tender for these operations were called on Jan. 18, 2019 and closed on Apr. 18, 2019.

LTA received seven proposals from local and international companies.

These proposals were evaluated on their quality and ability to grow the local non- fare business and generate more non-fare revenue from TEL advertising and retail spaces, said LTA.

How did they win the tender?

The consortium won the tender for retail operations because its proposal featured well-designed retail spaces with a thoughtfully curated tenant mix.

It includes Cheers convenience stores at several TEL stations.

The consortium will be paying LTA S$24 million over the concession period of 16 years.

Asiaray, on the other hand, won the advertising tender with a bid that featured digital and static media products catered to each TEL station.

Asiaray also promises to use video and data analytics to produce dynamic and responsive advertisements. The media company will be paying LTA S$140 million over the concession period of 16 years.

LTA to generate S$164 million

The concession fees from these non-fare operators will bring LTA about S$164 million over the next 16 years.

"This will generate significantly more non-fare revenue per rider as compared to today, which will substantially improve the long-term financial sustainability of the TEL," said LTA.

Earlier this year, Transport Minister Khaw Boon Wan said that current fare level is too low to offset the increase in rail maintenance and operation costs.

LTA added that it is also looking at outsourcing retail and advertising operations on other rail lines, buses, bus interchanges, and road and pedestrian infrastructure in the future.

Top image via LTA