Response from Minister for Transport, Mr Raymond Lim

Sir, there are many factors affecting businesses, people?s work patterns and family life, and it is not possible to separate them, and determine conclusively to what extent each one of them has played a part. For example, businesses could be affected by economic conditions, consumer confidence and even the weather. So while retailers within ERP zones have given feedback that ERP is one of the reasons their businesses have been affected, they also recognise that their business outside ERP hours has also been poor. Retailers elsewhere outside the ERP zones have also reported reduced business in recent months.

2 However, from time to time, LTA does gather trend data to see if it is possible to draw inferences from them. One example is its study of the impact on retail sales in Orchard Road, where we implemented ERP on Saturdays and extended ERP to 8pm on weekdays in October 2005. The study showed that growth of retail sales in Orchard Road was in fact faster after ERP expansion than before. Retail sales had grown by about 4% in the year before ERP was expanded. In the year after ERP expansion, retail sales grew by 9%, more than twice the growth a year ago. This compares more favorably with businesses outside of the CBD, where the growth in retail sales had remained more or less the same over the same period in question. So the findings in this particular study of the impact of ERP on retail sales would suggest that ERP, contrary to popular belief, has a positive effect on businesses. These findings mirror the experience in London, where a similar study on the congestion pricing system there showed that business became better after congestion pricing was introduced compared to before.

3 As with business, there are also many factors affecting work patterns and family life. However, even where ERP affects travel patterns in that some choose to go home later in order to avoid, say, the evening ERP on the CTE, there is also a flip side to the story. Others who were previously unable to get home early at all because of traffic jams are now able to do so if they wish, and can plan ahead with a much higher degree of certainty because of ERP. Let me put some numbers to this issue. After the gantry on the CTE before the PIE exit was implemented in November 2007, traffic volume between 6pm and 7pm fell by about 700 vehicles. But traffic speeds for the remaining 7,000 vehicles that continued to use CTE increased from 34kph to 50kph. So perhaps 700 drivers were affected in some way because of ERP, but 7,000 drivers now enjoy the benefit of a smoother and more predictable commute home. If we do not have ERP to deal with congestion, then motorists, and even larger numbers of bus commuters, will get stuck in traffic jams, spend a long time on the road getting to work, and not be able to get home on time. This is hardly conducive to work and family life. By having ERP, we can be assured that commuters will get to their destinations on time, and give commuters a choice, rather than leaving everyone with no choice but to endure the daily grind of gridlocked traffic.