Growth rate of vehicles to be halved

SINGAPORE — With the total vehicle population here nearing a million and with limited scope for the road network to be expanded further, the annual vehicle growth rate will be slashed by half to 0.25 per cent from February next year to January 2018. The rate will be reviewed again in 2017.

Announcing the lower rate yesterday, the Land Transport Authority (LTA) also released the Certificate of Entitlement (COE) quota for the next three months, which will be 5.3 per cent higher than that for the preceding three months. There will be 11,932 COEs from next month to January, which translates to 200 more COEs per month compared with the supply between August and this month.

The LTA said the lower vehicle growth rate is not expected to substantially affect the COE supply, as this is determined mainly by the number of vehicle deregistrations. “This is especially so in view of the generally rising trend of deregistrations in the coming years, as the COEs of many old vehicles expire,” it added.

Motor dealers whom TODAY spoke to agreed that the lower growth rate will not have a large impact on COE prices, given that more cars are being taken off the roads.

The LTA noted that roads already take up 12 per cent of Singapore’s land.

“Priority for road growth will be given to serve new development areas and to facilitate bus movements to bring about a better public transport experience,” it said. “The latter supports ongoing efforts to improve the quality and connectivity of our public transport network, which is set to undergo significant expansion over the next few years.”

The LTA reiterated that it is not tenable to keep to the same rates of vehicle population growth as before.

The vehicle population has grown 3 per cent from 2010 to last year, outpacing the 2.3 per cent growth of the road network over the same period. As at the end of last month, there were 973,004 vehicles here, based on the LTA’s data.

In 2012, the annual vehicle population growth rate was lowered from 1.5 to 1 per cent. The 1 per cent annual growth rate was “front-loaded” with the 1.5 per cent rate kept for the first half of the quota year, followed by a 0.5 per cent rate for the second half. The rate was further cut to 0.5 per cent last year and this year.

Transport Minister Lui Tuck Yew had said that Singapore cannot build its way out of the traffic congestion problem, given the “hard reality” of being a small island.

To maintain a more stable COE supply in each category under a lower vehicle growth rate, the LTA said that from February, it will cut the contribution — from 15 per cent to 10 per cent — from the other categories to the Open Category. This will return more COEs from deregistered vehicles to their respective categories. “The immediate effect on quotas available for each vehicle category is expected to outweigh the reduction in vehicle growth rate,” the LTA said.

On the COE quota for the next three months, the LTA noted that the monthly quota for commercial vehicles under Category C are substantially lower — at 282, compared with 515 from August to this month. It added, however, that this is not indicative of the total number of new commercial vehicles that may be purchased and registered in the next three months, as many more COEs may be made available through direct registrations under the Early Turnover Scheme.

The LTA said the number of replacements under the scheme has increased significantly since it was enhanced in March. While the total number of deregistrations has not increased significantly, replacements under the scheme — which incentivises commercial vehicle owners to replace their old pollutive diesel vehicles early — has more than tripled, from about 20 per cent before the enhancement to 70 per cent in the third quarter this year.

This means that more Category C COEs are being made available directly in the market, rather than through the bidding system, the LTA said. “While this leaves fewer Cat C COEs available for bidding, it also means that potential buyers can obtain new vehicles coupled with a ready COE, without needing to bid for a new COE through the open bidding system,” it added.

Still, COE quotas for bidding under the category may be higher in subsequent quarters as deregistrations increase, based on the age profile of the existing commercial vehicle population, the LTA said.