SINGAPORE – Up to 20,000 additional certificates of entitlement (COE) will be injected across the five vehicle categories over the next few years from February 2025.
Announcing this on Oct 29, the Land Transport Authority (LTA) said it is able to increase the vehicle population here by about 2 per cent of current levels as travel patterns have evolved, with the total mileage clocked by vehicles coming down by around 6 per cent from 2019 to 2023.
The new satellite Electronic Road Pricing (ERP) system, or ERP 2.0, will also allow the authorities to better manage traffic congestion and vehicle usage by introducing new “virtual gantries”, LTA added.
The injection of COEs – which gives one the right to own a vehicle – will boost COE supply, though it is unclear at this point how the move will affect premiums.
COE prices had dropped slightly across all categories at the latest tender exercise on Oct 23, though premiums for both car categories remained above $100,000. Singapore had 1,003,126 vehicles on the road as at September 2024.
Asked how it intends to allocate the additional 20,000 COEs, LTA said it would distribute them after reviewing relevant information, including traffic data and the deregistration rate across various vehicle categories.
It did not elaborate further, or specify how many years the injection will be spread across.
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LTA said it will also consider further injections of COEs to the vehicle population in future as more data and tools under ERP 2.0 are made available, including the possible option of introducing distance-based charging.
Transport Minister Chee Hong Tat had said in March that the authorities were open to studying a one-off increase in the total vehicle population, spread over a few years and accompanied by higher usage-based charges to prevent congestion.
With the release of new COEs, ERP charges will be adjusted as needed based on traffic conditions, LTA said.
The authority noted that the injection of COEs from February 2025 is similar to the approach taken when the Government added 10,500 COEs between 1997 and 2003, after the ERP system was introduced. This addition was on top of the quota allowed under the permitted vehicle growth rate at the time.
It was made possible by the ERP system, which gave the authorities greater control over vehicle usage.
The upcoming COE injection similarly comes on top of the quota allowed under the current vehicle growth rate, which has remained at zero for cars and motorcycles since 2018.
In response to queries about the latest move, LTA said it has observed a sustained change in travel patterns over the past five years.
For instance, there has been lower traffic demand and congestion in the Central Business District (CBD) after the Covid-19 pandemic, the authority noted.
Traffic speeds in the CBD area during weekdays are still within the optimal range of 20kmh to 30kmh on arterial roads and 45kmh to 65kmh on expressways, which is why ERP gantries in the city have not been charging any fees.
LTA said the Government’s long-term vision remains centred on being “car-lite”, with walking, cycling and public transport as the predominant travel modes.
It noted that the rail network has expanded by 18 per cent from 228km in 2019 to around 270km today, with more MRT lines and extensions slated to open over the next few years.
In line with this “car-lite” vision, there will be no change to Singapore’s zero vehicle growth rate for cars and motorcycles until Jan 31, 2028.
The vehicle growth rate for commercial vehicles will also remain at 0.25 per cent per year from Feb 1, 2025, to Jan 31, 2028.
The vehicle growth rate is reviewed every three years. The last review was in 2021.
Turning to ERP 2.0, LTA said the system’s satellite technology will allow it to introduce new “virtual gantries” to manage congestion in a more flexible and responsive manner. This will come after all vehicles here are installed with the new on-board units (OBUs).
ERP 2.0 also provides for the option of distance-based charging, which will be an additional tool to regulate vehicle usage and manage traffic congestion more responsively, LTA said.
LTA reiterated that it has not made a decision on whether to implement distance-based charging. “We will carefully study the implications before assessing whether to do so,” it added.
It said the injection of extra COEs from February 2025 is unrelated to any decision on distance-based charging.
The move is also separate from earlier measures to reduce the volatility of COE supply, LTA said.
Amid record-high COE premiums in 2022 and 2023, the Government moved to stabilise the supply of COEs by bringing forward more COEs guaranteed to expire in future peak supply years to fill the present supply troughs.
Despite the “cut and fill”, COE prices have remained high. At the Oct 23 tender, the premium for a Category A COE, which is used to register smaller, less powerful cars and electric vehicles, ended at $102,900, while the premium for Category B COEs closed at $113,890.
LTA on Oct 29 also gave an update on the ongoing installation of OBUs for ERP 2.0.
About 150,000 new and existing vehicles have been fitted with the OBU since November 2023, LTA said.
LTA added that it will progressively send notifications to owners of all remaining Singapore-registered vehicles to install the OBU from November 2024.
Existing vehicle owners can now make appointments directly with their preferred authorised workshops to install the OBU without going through LTA’s booking portal or waiting for LTA’s official notification, the authority said.
The original booking portal (go.gov.sg/book-obu) has been redesigned as an information page to help vehicle owners locate suitable workshops for their vehicle.