I REFER to Mr Simon Sia's letter last Friday, "Congestion and vehicle population increase - LTA can't have it both ways".
The Land Transport Authority (LTA) adopts a holistic approach in managing congestion on our roads, apart from just controlling the growth of the vehicle population and expanding physical road capacity. Other measures LTA uses are aimed at managing demand and optimising road capacity, and these include Electronic Road Pricing (ERP), intelligent transport systems, traffic engineering measures and encouraging more people to take public transport.
This has allowed vehicle growth to outpace road growth for a number of years, enabling many more Singaporean households to own cars. However, the situation is not a static one, and that is why LTA reviews the vehicle population growth rate from time to time, to take into account the impact of the various measures and changes in circumstances over time.
Mr Sia is right in pointing out that our certificate of entitlement (COE) system was previously determined based on actual de-registrations of vehicles.
However, because of public feedback that the one-year lag between vehicle de-registrations and replacement COEs caused the system to be unresponsive, the then Government Parliamentary Committee for Communications recommended that the methodology be changed to one based on the projected number of vehicle de-registrations, when it reviewed the COE system in 1998. The Government subsequently accepted the recommendation and implemented it.
However, any system based on forward projections is subject to errors in forecasting. In this case, the number of owners who decide to deregister their cars in a particular year depends on many diverse factors such as economic conditions, COE prices, fuel prices and even the launch of new models by car manufacturers.
The impact on annual vehicle growth of any deviation of actual de-registrations from the projection is significant as the bulk (about 80 per cent) of the COE quota is made up of recycled COEs from de-registered vehicles. As a result, vehicle growth in any particular year may deviate somewhat from the targeted 3 per cent per annum growth rate. These discrepancies are corrected in future review periods to ensure the long-term growth rate of 3 per cent per annum is maintained.
There will be trade-offs between accuracy and responsiveness in any system we adopt to determine the annual COE quota. Nevertheless, LTA will review its methodology to see if we can make further improvements to strike a better balance.
Geoffrey Lim Deputy Director, Media Relations
Land Transport Authority
This article was first published in The Straits Times on Oct 28, 2008.
