The SeaLink Travel Group Ltd (ASX: SLK) share price has been a very strong performer on Thursday.
In morning trade the travel and transport company's shares are up 8.5% to a record high of $6.02.
Why is the SeaLink share price surging higher?
Investors have been buying the company's shares on Thursday after it announced a major contract win.
According to the release, following a competitive tender, the Land Transport Authority of Singapore has awarded SeaLink's Tower Transit business the PT217 contracts to operate both the Bulim package and the Sembawang-Yishun package of public bus services in Singapore.
Tower Transit has been operating public bus services in Singapore for the Land Transport Authority since 2016.
Two new five-year contracts have been signed, with two-year extension options. These commence from 30 May 2021 for Bulim services and 5 September 2021 for Sembawang-Yishun. The Bulim contract is a renewal, which management notes extends its long track record of successful contract retention.
These contracts secure more than S$1 billion (A$1.02 billion) of contracted revenue over the first five years. They involve the operation of a total of 56 bus routes and the maintenance of more than 700 buses, two depots, five interchanges, and a terminal.
A milestone.
SeaLink Group's CEO, Clint Feuerherdt, appeared to be very pleased with the agreement and notes that it is a milestone for its Singapore business.
He commented: "This announcement is a milestone for SeaLink's subsidiary, Tower Transit Singapore, as it means a doubling of the scale of our operations in Singapore in terms of the number of routes, staff, buses, facilities and revenue.It also reinforces our presence in Singapore, one of the top-ranked cities in the world for public transport. SeaLink remains passionately committed to designing, delivering and operating world class services that reflect the needs of the community and our customers."
"With two bus packages, Tower Transit Singapore will be in a strong position to continue to contribute to Singapore's world-class, innovative bus network. We look forward to working on a smooth implementation for these contracts with the Land Transport Authority in the coming months and continuing to support its plans to improve and enhance Singapore's land transport industry." he concluded.
