Channel NewsAsia: Vehicle growth rate to be cut

Channel NewsAsia yesterday reported Transport Minister Lui Tuck Yew’s announcement on the reduction of Singapore’s 1.5 per cent vehicle growth rate over the next three years.

More details will be announced later this month, and changes take effect from next year.

Vehicle growth rate to be cut

SINGAPORE: Minister for Transport Lui Tuck Yew has said that Singapore’s annual vehicle growth cap would be cut further from next year.

Mr Lui did not say how much lower it will go. The quantum, he said, would be announced in October.

Mr Lui said this in an interview with the local media ahead of the opening of the new Parliament sitting next week.

The annual allowable vehicle growth rate now stands at 1.5 per cent.

One way Singapore manages its vehicle growth population is through the vehicle quota system.

Under it, the Land Transport Authority (LTA) determines the number of new vehicles allowed on the roads.

It takes into account the prevailing traffic conditions and the number of vehicles taken off the roads permanently.

The last time the quota was cut was in 2009, when it was halved from three per cent to 1.5 per cent.

Explaining the reason for the upcoming cut, Mr Lui said one consideration is the fact that Singapore’s road network will be considerably scaled down in future.

“In the recent decade, I think the roads have grown by about one per cent and going forward, we think it probably will grow only about 0.5 per cent per annum, this is the road network,” Mr Lui said.

“You can’t allow it (the vehicle quota) to grow at the rates in past years simply because the road networks are not expanding as what we have done before.

“And there is also a limit to what we can do with regard to congestion pricing. So it’s really trying to find a balance to these two measures”.

Mr Lui ruled out the possibility of a zero-per cent population growth for vehicles.

“It is a combination of both ownership measures as well as usage measures that is most ideal,” he said.

“You could theoretically bring it down to zero or even below zero but I think it will bump up against the aspirations of some who want to own a car.

“Notwithstanding whatever it is, we try to improve on the public transport system and there are those who feel that they really need a car.

“They have elderly, sickly parents around and it is a lot more convenient, so we understand all that.”

One expert said any drastic cuts would not make sense given that the average speed on expressways last year was about 62 kilometres per hour (km/hr).

It was 28 km/hr along arterial roads and within the CBD.

In 2002, the average speed on expressways was 64.8 km/hr. It was 63.3 km/hr in 2010.

Along arterial roads and within the CBD, the average speed was 24.6 km/hr in 2002.

In 2010, the speed improved to 28 km/hr.

Associate Professor Anthony Chin, director of the Economic Executive Programme at the Singapore Centre for Applied and Policy Economics, said: “Are we saying that 62.3 km/hr is not acceptable? That we have to cut ownership?

“Secondly, do we understand usage behaviour well enough to just go for this blatant cut in the ownership?”

“It’s not just a question of ownership but it’s the usage, because we are now tackling the usage problem — congestion is a usage problem.

“You can own cars but if everybody uses it at the same time, at the same location, well, you don’t need a professor to tell you that you will get traffic congestion because you are just loading it into the system.”

Assoc Prof Chin added: “At this particular moment, the road speeds seem to be acceptable, unless you are saying that in the future, that this road space will not grow by one per cent and you don’t do anything, you don’t do any traffic management, you don’t do any of these policies that would affect the behaviour of the motorist.

“Then I would agree that you would have to cut — that makes sense, does it not? If the space is not going to grow by so much and you want to maintain these speeds, then of course something’s got to give.”

Industry players said the cut in vehicle growth will very likely push up car prices.

Tan Chong Motor general manager of sales and marketing Ron Lim said: “Based on vehicle population numbers of 925,772 as at end-August 2011, 1.5 per cent vehicle growth would translate to 13,887 Certificates of Entitlement (COEs).

“Thus, every 0.5 per cent cut will translate to 4,629 fewer COEs.

“Given the total COE number to be released is dependent on the growth allowed and the replacement of deregistered vehicles, even if we assume de-registration numbers remain constant, as per numbers from January-June 2011, every 0.5 per cent cut in the population growth will translate to a cut in COE numbers by around 10 per cent compared to the current COE quota.

“This situation occurs due to the already record low number of COEs released currently.

“All these only point to higher COE prices which will further impact purchases, causing further delay in people replacing their vehicles, thus, not addressing the whole purpose of curbing vehicle population growth.

“As the reduction of COEs will be across the board, businesses will also be impacted due to higher operating costs from commercial vehicles.

“Thus, overall, this will mean an even tougher time for the auto retail industry and eventually higher ownership cost to car buyers and business.”

But there is some good news for motorists — evening Electronic Road Pricing (ERP) surcharge at some gantries such as along the CTE, Chinatown and Boat Quay areas may be tweaked.

Mr Lui said the tweak will involve the timing of evening ERP, not doing away with the surcharge.

He said: “This is something I have asked LTA to study — whether it’s possible to tweak the timings a little bit during the evening period.

“Frankly, I think there are some drivers who are prepared to pay a certain amount for ERP in order to have a smoother drive home, particularly in the evenings.

“There are some who would say, ‘why should I pay?’ I think there is room for some re-look into the evening peak ERP, not to do away with it, but to tweak the timings.”

Details will be announced in October.

Image taken from euphbass

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