Road tax will be cut in-lieu of a raise in ERP rates. Effectively, there will be a 15% off road tax across the board, but in place of this, ERP rates will go up in increments of S$1.00 instead of the usual S$0.50 and the base ERP rate will be S$2.00 instead of S$1.00. There will eventually be 71 ERP gantries by year end.

Other sweeteners will include a cut in ARF for COE vehicles, down 10% to 100% from the current 110%. More roads and wider roads will also be built in an attempt to improve traffic conditions. Essentially, motorists will be paying more at the end of the day – even with the tax cuts, if they do not change their driving habits. After all, a 15% reduction in road tax is only about a savings of S$120 per year for cars less of 1,001cc to 1,600cc – which is good to cover 60 days of ERP fees at S$2.00 each pass.

AFTER announcing sweeping changes to improve the bus and train services markedly, Transport Minister Raymond Lim on Wednesday spooned out the bitter medicine in the final part of the Land Transport Review: a substantially expanded electronic road-pricing (ERP) coverage to keep Singapore’s roads moving smoothly.

There is good news too – vehicle taxes will be cut, more expressway will be built and the Central Expressway widened to ease the perennial traffic woes among the northern corridor.

In the last instalment of his three-part review, Minister Lim said 16 new gantries will go on between April and November, bringing the total number in operation to 71. This is just the start.

The base ERP rate will be upped from $1 to $2, with the increments in $1 instead of the current 50 cents. To make ERP more effective in a rising affluent community, these changes will be made gradually.

The trigger point of ERP implementation or rate increases will change too. Currently, as long as average speeds on expressways and arterials roads are within 45-60kmh and 20-30kmh respectively, all is fine.

But soon, 85 per cent of road users must move at these speeds to stave off ERP.

Motorists are expected to fork out $70 million more a year on ERP if they do not change their commuting habits. Last year, they spent $98 million, or an average $115 per vehicle.

Road tax to be cut across the board
To show that ERP is not for raising Government revenue, Mr Lim announced that road tax will be cut by 15 per cent across the board, a move that will cost the Government $110 million a year. The last time road tax was cut was last September, by 8 per cent.

To curb vehicle population growth, the minister also announced that the 3 per cent annual allowable growth rate – a minor component in a formula that determines COE supply – will be halved to 1.5 per cent from April 2009.

This could potentially reduce the number of car COEs by 8 per cent.

10% cut in ARF for vehicles
To offset what might be a consequential rise in COE premiums, the additional registration fee (ARF)for cars, taxis and goods vehicles will be cut by 10 per cent, from the current 110 per cent of the vehicle’s open-market value to 100 per cent. This will kick in in March.

Besides the tax cuts, the minister announced other sweeteners to help the ERP medicine go down. These are:

  • $14 billion worth of new road projects for the next 12 years – compared with $3.4 billion spent on roads in the last decade.
  • A new highway – the largely underground North-South Expressway linking Woodlands to the East Coast Parkway – will be built. Costing $7 billion to $8 billion, it will be ready by 2020. It will be Singapore’s 11th expressway and is expected to reduce travelling time in the north-east corridor by 30 per cent.
  • Building of the new Marina Coastal Expressway, a 5km underground expressway linking the Kallang Expressway to the Ayer Rayah Expressway. It will cost $2.5 billion and expected to be ready by 2013.
  • The Tampines Expressway and perennially congested Central Expressway will be widened from July to 2011.

Mr Lim also announced during a visit to Kallang-Paya Lebar Expressway on Wednesday morning that the second phase of the Kallang-Paya Lebar Expressway, stretching from the Pan-Island Expressway to the Tampines Expressway, will open to traffic in September.

To give motorists have another alternative to driving, the frequency of bus services along corridors affected by the ERP expansion will be increased to one every 12 minutes by June, from one every 15 minutes now. And by August next year, one every 10 minutes.

The number of premium bus services in these areas will rise from the current 42 to at least 72 by June.

And for the first time since mass transit started here two decades ago, bus services will be allowed to duplicate sections of mature MRT lines.

Mr Lim added that other intelligent transport solutions such as the Expressway Monitoring and Advisory System or EMAS will be expanded to optimise the use of the roads.

But he cautioned that increasing road capacity and deploying traffic engineering measures will not in themselves guarantee smooth flowing roads.

‘Additional lanes and new roads attract more traffic and congestion soon returns. As a Time Magazine writer put it, ‘traffic is like water; it oozes across all available surface,” said the minister, noting that the insatiable appetite for more cars has led to an uphill battle against gridlock in many cities.

In fast growing economies like China, the car population grows at more than 20 per cent a year and peak-hour traffic in mega-cities like Beijing and Shanghai crawls at 5km an hour. In the United States, motorists spent more than 4.2 billion hours stuck in jams, enough time to fill 65 million iPod Nanos with music, and used up enough extra fuel to fill 58 supertankers, he said.

The ‘congestion invoice’ in the US stands at some $78 billion each year while congestion costs are estimated to be about 1% of GDP in European countries such as Britain and France.

He said the use of ERP to manage traffic has made it possible for many Singaporeans to own cars.

‘And so the vehicle population has grown steadily to the 850,000 vehicles today. With rising affluence, not only are more Singaporeans owning cars, they are also using them more intensively. While the number of cars increased by 10 per cent between 1997 and 2004, the number of car trips increased by 23 per cent, more than double.’

‘The effects are telling. Congestion levels have increased by about 25 per cent since 1999, with more roads congested during the peak hours. A December 2007 Singapore Business Review article entitled ‘Gridlocked Nation’ warned that ‘if Singapore’s growing traffic problems were not solved soon, the surging economy could feel the crunch.’

More updates to come.

Article obtained from on 30thJanuary 2008

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