SINGAPORE — The development of the next-generation Electronic Road Pricing (ERP) system will soon be underway: The Government plans to call a tender over the next few months to build the system, which should be completed by around 2020, Senior Minister of State (Finance and Transport) Josephine Teo said yesterday.

It is necessary to look into a new system as the current one is coming to the end of its shelf life, she said. “If we do not replace it, it will become more expensive and difficult to maintain and repair.”

The new system will allow the Government to calibrate the charging of motorists in proportion to the congested road segments that they use — “a fairer approach”, as Mrs Teo put it. It can also provide value-added services, such as navigation, payment for roadside parking in lieu of parking coupons and real-time traffic information.

While some Members of Parliament (MPs) raised concerns over the loss of privacy due to the new system, Mrs Teo said there would be appropriate safeguards to minimise privacy concerns.

There will also not be any change in the pricing policy and ERP gantries will not be set up at additional roads while transiting to the new technology, she said.

Mrs Teo also announced that the Government is planning to ramp up support for car-sharing services by making available more lots in Housing and Development Board (HDB) estates for shared vehicles at car parks with sufficient capacity.

She pointed out that if 60 per cent of households here owned a car — or 15 percentage points more than today — the Government will need to find parking space for another 150,000 cars, by building more than 500 additional multi-storey car parks in HDB estates. While car-sharing has not caught on widely here, Mrs Teo said she was optimistic about its prospects.

On commercial vehicles, Mrs Teo announced that the one-year-old Early Turnover Scheme would be enhanced. The scheme seeks to encourage vehicle owners to replace their old and polluting diesel commercial vehicles. The Ministry of Transport is “sharply increasing” the Certificate of Entitlement (COE) bonus offered under the scheme if the owners switch to models that comply with at least the Euro 5 emission standards, she said.

From today, owners of light commercial vehicles registered before 2001 will get a 20 per cent COE bonus, up from 10 per cent. The bonus for heavy commercial vehicles will increase to 100 per cent, up from 30 per cent. This is on top of being able to transfer the unused portion of a commercial vehicle’s COE to the new vehicle. The scheme will be effective until the end of April 2016.

Jurong GRC MP Ang Wei Neng suggested that under the COE system, Category C (for commercial vehicles) should be split into two. “In this way, SMEs (small and medium enterprise) that need to buy light commercial vehicles do not have to compete with the big boys who are buying the heavy commercial vehicles,” he said.

Mrs Teo replied that this could result in more volatile prices as the number of bids in the new categories becomes smaller.

She noted that the COE system had undergone several tweaks in the past year. “It is probably best to let things be for a while before introducing further changes.”

CORRECTION: The original article reported that Senior Minister of State (Transport) Josephine Teo had said that privacy concerns raised by Members of Parliament to the new Electronic Road Pricing system were premature. She did not say that. We apologise for the error. This article was updated at 4pm on March 12, 2014.