Singapore: Kept Congestion Under Control, but how?


Last time, we talked about London’s battle against congestion. In this post, we will talk about how one of the world’s most densely populated places, Singapore manages its traffic congestion problems.

As far as congestion charging is concerned, Singapore was one of the first places to do it, introducing it as early as 1975. The original Area License System (ALS) charged drivers a flat fee for unlimited entries into Singapore’s central area, with collection managed using manned toll booths. The impact of this was profound and immediate. It led to a 45% drop in the amount of traffic and a 25% drop in road accidents. The average speed of commuters also increased from 18 kmph to 34 kmph. The chargeable area was increased in size in 1990 and included the expressways that led into the cities.

To increase efficiency and precision in road pricing management, Singapore eventually replaced the ALS with the innovative digital Electronic Road Pricing (ERP) system. The ERP utilizes a car’s On-Board Unit (OBU) which has a slot for cash cards. The OBU is a permanent fixture for all vehicles on the road, except the ones providing emergency services like ambulances, fire engines etc. Once a car goes through an ERP gantry, the leftover balance in the cash card is displayed for the driver. One of the most unique features of this system is the “live” variable road pricing. Congestion charges can vary based on the time of day, location, vehicle type, and even on current traffic conditions. The ERP system has brought down Singapore’s congestion by another 15%. It has also increased public transport usage from 45% to 65% of Singapore’s population. The reduction in carbon emissions has also been massive. On top of that, the ERP system raises around 50 million USD in revenue every year.

Aside from ERP, the Singapore Government has introduced some other measures to combat congestion as well. Some of these are mainly aimed at reducing car ownership and usage. One of those measures is the Vehicle Quota System (VQS). It aims to cap the annual increase in vehicles on the road to just 3%. Under the Vehicle Quota System (VQS), one must enter a bid system to even get permission to own a car (the Certificate of Entitlement), which will give you registration privileges for 10 years. If you are lucky and get the COE, you will also have to pay a large tax amount for the privilege of owning a car: first, you need to pay a staggering 41% customs duty, then it will cost $1,000 to $5000 to register the car (private vs company), plus on first registration, there will be an Additional Registration Fee (ARF) of 150% of the (inflated) market price of the car. However, all of that is before your car even hits the road. After your car is on the road, you need to pay road taxes as well. As a result of that, an Audi A4 1.8, which costs around $37,000 in the US, costs $182,000 in Singapore.

The key to Singapore’s sustained success against congestion has obviously been its incredible public transport system. For that reason, the revenue from the ERP system is chiefly allocated to the maintenance of the road network and the public transport system. Food for thought; what do you think Mexico City or Bangalore City should do to tackle parking problem?

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