Transport Sector (Critical Firms) Act 2024 in force from 1 April 2025 providing for new designated entities regime targeting key entities in air, sea, and land transport sectors in Singapore

11 April 2025

The Transport Sector (Critical Firms) Act 2024 (“Act”) came into force on 1 April 2025. The Act introduces a designated entities regime which regulates key transport entities that are involved in the provision of essential transport services in the air, sea, or land transport sectors, and are strategically important within the sector (e.g. if the services they provide are not readily replaceable, due to significant market share or specialised expertise).

The relevant authorities looking after Singapore’s air, sea, or land transport sectors, i.e. the Civil Aviation Authority of Singapore (“CAAS”), the Land Transport Authority of Singapore (“LTA”), and the Maritime and Port Authority of Singapore (MPA) (“Authorities”), will be responsible for designating relevant entities under the Act. The Act has made corresponding changes to the statutes administered by these Authorities, i.e. the Bus Services Industry Act 2015, Civil Aviation Authority of Singapore Act 2009, Maritime and Port Authority of Singapore Act 1996, and Rapid Transit Systems Act 1995.

The following notifications were issued on 1 April 2025 designating various entities in the air, sea, or land transport sectors under the new regime with effect from 15 April 2025:

  • Bus Services Industry (Designated Operating Entities) Notification 2025
  • Civil Aviation Authority of Singapore (Designated Operating Entities) Notification 2025
  • Maritime and Port Authority of Singapore (Designated Operating Entities) Notification 2025
  • Maritime and Port Authority of Singapore (Designated Licensee) Notification 2025
  • Rapid Transit Systems (Designated Entities) Notification 2025

Daren Shiau, Partner and Regional Co-Head of Allen & Gledhill’s Competition & Foreign Investment Review Practice, and a Board Director of MSI Global (the commercial subsidiary of LTA), observes: “The new legislation which covers the air, sea and land sectors, complements the Significant Investments Review Act (SIRA) regime which comprehensively regulates significant investments into critical entities. The Ministry of Transport has previously observed that entities adequately regulated under its sectoral Acts will not be designated under SIRA at the same time. This holistic approach is both sensible and commendable”.

Designated entities

Entities can be designated as follows:

  • “Designated operating entity”, if they directly provide any essential transport service in Singapore and are strategically important within the sector; or
  • “Designated equity interest holder”, if they hold an equity interest in a designated operating entity and have a strong nexus of control over their subsidiaries that are designated operating entities. This is because such individuals or organisations may influence key decisions related to the provision of essential transport services in Singapore,

(collectively, “designated entities”).

Essential transport services

The Act sets out the definitions for “essential transport services” under each sector by listing out the key services necessary for Singapore’s air, sea, and land transport networks:

  • For land, key services include, among other things, public bus, and rail services.
  • For aviation, key services include, among other things, airport and ground handling operations, and passenger and cargo air services at Changi Airport.
  • For maritime, key services include, among other things, port and marine services and facilities, as well as services which support the provision of sea transport, such as monitoring and management of shipping traffic and bunker supply.

Ownership controls

Under the Act, the relevant Authorities have oversight of significant changes in effective control of designated entities through the following requirements:

  • Any person who becomes a 5% controller of the designated entity must notify the relevant Authority within seven days after becoming a 5% controller.
  • Any person who intends to become, or ceases being, a 25%, 50% or 75% controller of the designated entity must seek the relevant Authority’s approval

In addition, the relevant Authority’s approval must be sought for:

  • Any person intending to become an indirect controller, meaning someone that is able to exert control over the directors or trustee managers of the designated entity; or
  • Any person intending to acquire and continue operating without disruption, any part of the designated operating entity’s business relating to the provision of essential transport services. This is to provide the relevant Authority with oversight over all acquisitions of the entity, or parts of the entity, regardless of whether there are significant changes to its service provisions.

Designated entities must notify the relevant Authority within seven days after becoming aware of any of the ownership changes.

Management appointment controls

Designated entities are required under the Act to seek the relevant Authority’s approval for the appointment of its chief executive officer (“CEO”) and chairperson of its board of directors. Designated operating entities who are also licensees must seek the relevant Authority’s approval for the appointment of its CEO, chairperson, as well as all directors of its board.

Operations and resourcing controls

Notification requirements

The Act requires designated entities to notify the relevant Authority of material developments or events, e.g. if a designated operating entity outsources a material function in providing essential transport services in Singapore, or if they face material events or legal proceedings that may impair or impede the provision of essential transport services in Singapore. This list of events will be circumscribed. To help with compliance, the relevant Authorities will issue a set of advisory guidelines to provide practical guidance for these notification requirements.

Special administration order

To safeguard service continuity in extreme scenarios and unlikely events (e.g. where a designated operating entity or licensee becomes unable to provide essential transport services safely and reliably), the Act introduces provisions extending the relevant Authority’s step-in powers via a special administration order to cover designated operating entities and licensees across the air, sea, and land transport sectors.

Business continuity planning requirements

For designated operating entities in the air transport sector, the Act introduces the power for CAAS to impose requirements for business continuity planning. The requirements will not apply to designated equity interest holders. The Act does not cover these requirements for designated operating entities in the land and sea transport sectors, as they can be subjected to similar requirements via licence conditions.

Remedial directions, penalties and appeals

There are also provisions in the Act relating to remedial directions, penalties, and appeals. The relevant Authority may issue remedial directions (e.g. directing the disposal of equity interest and removal of key appointment holders) for breaches of controls relating to ownership and management appointments, among other things.

Parties may appeal to the Minister for Transport regarding certain decisions by the relevant Authorities, including the designation of an entity, refusal to grant approvals required for controls over ownership or management appointments, and the issuance of remedial directions.

Other subsidiary legislation

Set out below are other subsidiary legislation which came into operation on 1 April 2025:

  • Transport Sector (Critical Firms) Act 2024 (Saving and Transitional Provisions) Regulations 2025
  • Civil Aviation Authority of Singapore (Exemption from Section 67D(1)(g) and (h)) Order 2025
  • Rapid Transit Systems (Appeals) Regulations 2025

Reference materials

The following reference materials are available on the Singapore Statutes Online website sso.agc.gov.sg: