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Go-Ahead reportedly well placed to win Singapore bus deal

Discussion in 'Market News' started by Lily, Oct 13, 2015.

  1. Lily

    Lily Forum Member

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    Liberum says winning contract would be good start to expanding away from UK

    Go-Ahead shares have slipped back in a falling market, despite the transport group reportedly being well placed to win a bus contract in Singapore.

    According to analysts at Jefferies, local press reports suggest two of the original 10 bidders for a second package of bus routes being tendered have dropped out due to quality reasons, with Go-Ahead apparently putting in the lowest priced of the remaining bids. The winner is due to be announced by the end of the year. Jefferies said:

    Go-Ahead has submitted the lowest priced bid at S$498m (around £232m) for the 5-year contract (with possible two-year extension). That appears to be 6.5% below the low end of the range of competing bids (S$533m-S$631m or around £248m-£294m). Other bidders include Keolis, a joint venture of RATP Dev and Transdev and local competition.

    Earlier this year, Tower Transit (UK subsidiary of Australia’s Transit Systems Group) won the Bulim contract (the first package of bus routes tendered in Singapore). Its bid was a close third lowest on price, but was assessed to rank best on the combination of quality and price. Singapore’s Land Transport Authority said greater weight had been given to quality. Go-Ahead was the highest bidder in the Bulim process and we assume learnt from the experience. As a group that emphasises quality of product, we assume that with the lowest pitched bid for this second package, it must now be well placed in this contest.

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