Comfortdelgro, which operates northeastern Singapore and the Downtown Line, will partner with East Japan Railway Company (JR East) and UGL to establish the Melbourne One Rail Consortium to bid on the Melbourne Metropolitan Train Network next year.
“The bidding team is married to world-class Japanese and Singapore customer service and efficiency with UGL’s local asset management and operational expertise,” the consortium said in a statement.
This group is supported by the Japan’s popular trade and investment conglomerate from Marubeni Corporation.
The current operator of the line is Hong Kong’s MTR, working with John Holland Group and UGL on a contract that expired in 2027.
Melbourne’s Metropolitan Network has 17 rows covering 402 km and 222 stations, making it Australia’s largest suburban railway network. Comfortdelgro CEO Cheng Siak Kian generates approximately $2 billion ($1.54 billion) in annual revenue. luck. Comfortdelgro’s share of revenue depends on the joint venture agreement, but it will still significantly improve the company’s finances.
The company reported revenue of $1.17 billion ($903 million) for the quarter ending in March, with 52.6% of that revenue coming from outside Singapore. Australia’s revenue reached $203 million ($156 million).
If Comfortdelgro’s bid is successful, it will be the second railway network taken by Hong Kong’s competitors. Last year, Comfortdelgro won a bid from MTR to operate the Stockholm subway. MTR has been operating trains in Sweden since 2009 (MTR also recently lost its contract to run London’s Elizabeth Line with Tokyo Metro).
Chan We choked up the company’s victory over MTR at a lucky time. Railway contracts usually last for at least seven years, and Chen said he has enough railway experience to ensure Comfortdelgro has rightly made a big global bid.
MTR has been operating the Melbourne line for over 10 years, with Stockholm taking over by Comfortdelgro at the end of the year for over 14 years.
“10-14 years ago, we weren’t even in a position to bid on this deal,” Chen said. “It’s an evolution of time when you gain expertise and then you’ll be able to work with the right partners and challenge those contracts.”
Comfortdelgro expertise
Comfortdelgro’s expertise ensures that you run unmanned metro trains. The company’s two lines, the Northeast Line and the Downtown Line, are the most reliable in the city, with the most average kilometres between five rows of failure (MBKF). data It exists. (The Thomson-East Coast line, the latest in Singapore run by SMRT, is still too new to have reliability data.)
Chen believes that the high expectations of Singaporean consumers have forced the company to constantly improve reliability.
Comfortdelgro does not own any property in or around Stations. This is an important revenue stream for other rail operators such as MTR and JR East. Instead, ComfortDelgro generates revenue from fixed rate regulators and pays it to operate a rail network that is closely tied to the reliability of the railway and customer satisfaction. This means that the company must ensure that failures are rare to maintain that thin margin.
“We are very focused on operating our systems, and that’s where we benefit,” Chen said.
Global Play
Melbourne’s bid is part of Comfortdelgro’s strategy to leverage experience in three different types of transportation.
In addition to its Australian operations, Comfortdelgro also operates bus and taxi services in the UK, as well as taxis and private car rentals in mainland China. It will also operate railway services in Paris later this year.
Cheng hoped that Comfortdelgro’s extensive experience would help the company continue to bid to expand its presence in the existing market.
“The advantage of growing that way is a lot of familiarity with both regulatory and brand names. That’s what we’re trying to do,” he said.
If Comfortdelgro’s Melbourne bid is successful, the company will eventually operate railway, bus and taxi services in Australia, allowing it to replicate the multimodal models in Singapore.
Chen wants to replicate this model beyond Singapore and Australia. “If it’s appropriate, if it’s feasible, we do,” he said.
Comfortdelgro could be the first to expand its presence in existing markets or in adjacent markets. “We’re very cautious about where we’re expanding. We need to understand the revenue model, the regulatory environment and what the rule of law is,” Chen said.
But that doesn’t stop the company from going to cities that don’t exist yet,” he adds.
This story was originally featured on Fortune.com.
