Electronic road pricing in Singapore

Road & Transport Research, Dec 1999 by Luk, J Y K

Refereed Paper

This paper has been critically reviewed by at least two recognised experts in the field.

Originally submitted: June 1999

Abstract

Electronic road pricing (ERP) became operational in Singapore in September 1998. It replaces the manual congestion pricing schemes in the CBD and expressways. This paper outlines the key events in the development of congestion pricing since June 1975. It describes other pricing measures to manage road travel demand. These are the Additional Registration Fee (ARF) and the Vehicle Quota System (VQS) for new vehicles. The revenue from congestion pricing is about S$0.1 billion per year and that from VQS is about S$1.5 billion per year (A$1 - S$1.10 in May 1999). This paper also derives some price elasticity values with respect to congestion tolls from empirical data. Congestion pricing appears to be twice as effective as petrol price increases in reducing car travel, and would be only similar to petrol price in inducing mode shift to public transport. The balancing of fixed costs imposed on motorists, such as the VQS premium and registration fees, and usage costs such as congestion tolls is a complex issue. ERP tolls would have to be much higher than the current toll rates if they are to replace VQS completely and maintain the same total revenue.

Abbreviations

ALS Area Licensing Scheme

LTA Land Transport Authority

ARF Additional Registration Fee

MRT Mass Rapid Transit

CBD Central Business District

PIE Pan Island Expressway

COE Certificate of Entitlement

RH Restricted Hours

CTE Central Expressway

RPS Road Pricing Scheme

ERP Electronic Road Pricing

RZ Restricted Zone

GPS Global Positioning System

VQS Vehicle Quota System

INTRODUCTION

Congestion pricing is the charging of a toll to reduce congestion at specific times and locations. Singapore implemented the world's first congestion pricing scheme in June 1975. The scheme was called the Area Licensing Scheme (ALS) and motorists then had to purchase daily or monthly licences to enter the CBD during the restricted hours (Fan et al. 1992; Menon et al. 1993).

Congestion pricing has continued to arouse interest in many countries faced with a rising congestion problem. Hong Kong is about to complete a feasibility study in its second attempt to introduce congestion pricing (Opiola 1998). The Netherlands is working on a pilot study (van Wijk 1999), also in its second attempt, and will adopt the Saab-Combitech equipment similar to that used in the CityLink tolling sites in Melbourne.

An electronic road pricing (ERP) system became fully operational in Singapore in September 1998 (Menon and Chin 1998; Menon 1999). It replaces the manual, licence-based schemes for the CBD and expressways and is a pay-per-entry system. The new system consists of 33 gantries. Twenty-seven gantries monitor traffic entering the CBD called the Restricted Zone. The other six gantries monitor six other sites on three expressways. Figure 1 illustrates the locations of these gantries. The locations are identical to the original toll sites for the licence-based schemes. Apart from the changes in technology, ERP rates and restricted hours were kept almost unchanged when the ERP system went into operation in September 1998.

This paper provides an update on the development and experience of congestion pricing schemes in Singapore. It also describes car ownership restraint measures, which may have been overshadowed by the technology-driven ERP but in fact they are as important in managing road demand. The interaction between ERP and car ownership restraint will be discussed. Some price elasticity values due to congestion tolls are derived from empirical data and provided in this paper.

In preparing this paper, the author has made use of the data available from the Land Transport Authority (LTA) Internet site: www.Ita.gov.sg and policy statements from the local newspaper, The Straits Times.

BRIEF HISTORY OF CONGESTION PRICING IN SINGAPORE

The ALS implemented in 1975 was for the CBD area. The objective then was to reduce commuting trips by private cars into the CBD. Car pools with four persons including the driver were exempted from paying the congestion toll, which was S$3 per daily licence or S$60 per monthly licence (A$1==S$1.10 in May 1999). Taxis were initially exempted but included for tolling after two months of operation.

Table 1 summarises the major events in the development of congestion pricing in Singapore from 1975 to 1999. These major events included the introduction of congestion tolls in the p.m. period in 1989 and the subsequent implementation of all-day tolling in 1994. The Road Pricing Scheme was introduced in 1995 on expressway sites that were the initial ERP sites before the ERP system became fully operational in the CBD.

The ERP system is suitable for multi-lane, highway speed tolling. It automatically deducts congestion tolls from a stored-value card. This card is a memory chip card called the CashCard. A driver must insert the card into an in-car unit installed in the vehicle, preferably at the beginning of a journey.