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SINGAPORE: Changes to the Vehicle Quota System will be made in April. This was announced by Transport Minister Raymond Lim in Parliament on Thursday.
A new formula will be used to determine the COE quota. This will allow authorities to better manage the growth of the vehicle population, by removing yearly fluctuations in supply.
Under the new methodology, the Land Transport Authority (LTA) will recycle the COE quota from the actual vehicle de-registrations in the most recent 6-month period back into the system. LTA says this eliminates the need to make any corrections due to any under- or over-estimation.
Traffic jams are a familiar frustration for many drivers. And efforts by transport authorities to curb the number of vehicles on the roads have had limited results.
For example, as of May 2009, there were 907,566 vehicles on the road. In January 2010, that had grown to 929,277 - an increase of 2.4 percent, higher than the allowable growth rate of 1.5 percent.
In Parliament on Thursday, MPs called for tighter controls.
Hri Kumar, MP for Bishan-Toa Payoh GRC, said: "As a matter of logic, we cannot allow car growth indefinitely. So what is the long-term strategy, particularly when we run out of roads to build?"
One solution is to change the way authorities calculate the number of Certificates of Entitlement (COEs) for release each year. Currently, this is largely based on an estimate of the number of cars to be de-registered or scrapped each year. Other factors include the annual allowable growth rate and adjustments for under- or over-projections from previous years.
But as authorities found out, estimates aren't always reliable.
Minister Lim said: "Dr Lim (Wee Kiak) asked, I think his first question was, how is it that we persistently had this over-projection, that we should have washed it out the following year. The reason is that we persistently over-projected every year. Let's say last year we over-projected for the current year, if we over-project it again, we add to the problem."
So from April, the calculation will take into account the actual number of vehicles taken off the roads. This includes both de-registered cars and temporary COEs that have expired or were cancelled.
And instead of an annual quota, figures will be revised every six months. Take for example, there are 800,000 vehicles as of January. Based on the allowable growth rate of 1.5 percent, there will be an additional 6,000 COEs for sale every six months. On top of the number of vehicles de-registered in the same period - for example 20,000 - this means the COE quota for July to December will be 26,000.
This direct replacement system is similar to that implemented before 1999. But back then, as quota numbers were released annually, there were complaints from industry players that the time-lag was too great.
Now, however, with a switch to a six-monthly revision, Transport Minister Lim said the time-lag issue is reduced. His ministry is also not ruling out shortening the quota period further if necessary.
Mr Lim added that further changes to the annual allowable growth rate, which halved from 3% to 1.5% last year, may be carried out in 2012. The move is meant to be more responsive to the market, and car dealers said they no longer need to second-guess the authorities when deciding the amount of stock to bring in.
But with the changes, the number of COEs is likely to be reduced, which means car prices may go up.
- CNA/ir
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