Vehicle Growth Rate and QY2006 Quota

Mr Ong Kian Min asked about the outcome of the vehicle growth rate review.

Since the introduction of the Vehicle Quota System (VQS) in 1990, our vehicle population growth rate has been set at 3% per annum.  The rate was last reviewed in 1999 when we decided that the growth rate should be maintained at 3%.  My Ministry has completed its latest review and we have decided to retain the vehicle growth rate also at 3% but only for the next 3 years, i.e. from 2006 to 2008.

In reviewing the growth rate, we took into consideration our ability to further expand the road network, the traffic conditions on our roads, the extent of road charging, planned development of public transport infrastructure and the need to allow more people to fulfill their aspirations to own cars. 

The vehicle population grew by 44 % from 1989 to 2005, the period of 16 years while road network expanded by only 17%. Although the roads are still fairly free-flowing today, Members will agree that traffic has definitely become heavier over the years.

We have controlled congestion through the use of ERP coupled with road expansion and improvement works. This has resulted in better utilisation of the overall road network capacity. 

However, our road expansion will slow down in the years ahead as we become more built-up, especially in the city area. We envisage that, at the most, our roads will increase by another 8% over the next 15 years, half the rate of the previous 15 years.

Therefore, having weighed the various considerations, we have decided to maintain the vehicle growth rate at 3% for 3 more years. We will monitor the impact on traffic conditions closely and will review the rate again in 2008. But I will urge our members to realise that, in view of our land constraints, it is not possible to maintain the 3% growth rate indefinitely.

At this juncture, I am pleased to announce that the total COE quota for 2006 is 131,127.  This quota is just marginally lower than the original quota announced for 2005, which was 132,581. The reduction is due mainly to a lower number of adjustment COEs introduced for this year.

Public Transport System

Mr Ong also expressed concern that the KPI for expressways seems to be declining. Let me explain. The KPI is an average figure derived from both the morning and afternoon peaks. Therefore his observation that the key peak figures for expressway has dropped is correct. This is because the ERP system is managing the morning peak traffic very well. But the traffic situation during the afternoon peak has been deteriorating, and I am sure many motorists including Members here would have also experienced this.

The percentage of expressways with speeds above 45kph in the morning peak is 100% in FY03 and 99.1% in FY04.  In comparison, the percentage for the afternoon peak period has fallen from 98.8% in FY03 to 96.8% in FY04. That is quite a big drop. Overall this has led to the average KPI declining. So without the ERP on most expressways during the evening peaks we can expect the average KPIs to further decline in line with the growth of our vehicle population. That is why on 1 Aug 2005 we implemented ERP along the northbound CTE during weekday evenings, from 6.00pm to 8.00pm.  Since the introduction of the evening ERP, traffic speeds along the northbound CTE have definitely improved. LTA will therefore be studying how to improve the expressways speed during the evening peaks.

Mr Ong also expressed that while 95% of the expressways are above 45 kph, the other 5% are below the threshold and a motorist would be unhappy if he is caught in the 5% of the expressway everyday. I would like to explain that the traffic speeds are measured during the peak hours over the entire stretch of all our expressways. And even for the stretch within the 5%, the travel speed is only slightly below the optimum speed range i.e. from 40-44kph. Otherwise the ERP would have been increased. So therefore in general, a motorist's journey would go beyond the affected stretch. His entire experience would be smoother as reflected in the 95% of expressway above the traffic speed of 45kph.

Mr Ong suggested colour-coding roads according to their travel speeds to better manage traffic jams. The colour coding of roads according to different levels of congestion is already being done in the form of an interactive map on the One.motoring website.  The different colours represent the different speed range at which a road is operating at that point in time. We would encourage motorists to consult the map before they start their journey.

For motorists already on the road, LTA currently makes use of electronic signs along the expressways to convey information on ongoing traffic conditions along the expressways and some major roads. I agree with Mr Ong that the messages could be more informative and helpful, especially in giving motorists an estimated time to clear the congestion. I will ask LTA to take up Mr Ong’s suggestion.

Mr Ong will be pleased to know that LTA is also working with interested service providers to make traffic information available to motorists in a personalised basis i.e. the driver will know exactly what to expect while driving. Now, whether such a service is available will depend on its demand and hence its viability. This is because the service providers will have to make some investments and will therefore have to charge for such personalised information.

Mr Ong also asked how LTA and the Traffic Police (TP) manage public events. When there is a major public event to be held, the current procedure requires the organisers to consult the relevant agencies, such as LTA and TP to identify the impact on road users, and implement appropriate mitigation measures to minimise the impact. Such mitigation measures include the identification of necessary traffic control plans at key road junctions, and advance publicity of the event so that the participants so that the general public are aware of the event and the potential traffic impact. Motorists are also advised to use alternative routes.  I think members would have noticed that in the recent months there have been a lot of advisory messages on our signboards.

I wish to assure Mr Ong that LTA will continue to work closely with TP and event organisers to manage public events so that they don’t congest the island too much.

Incentives for "clean" vehicles

Mr Ong Kian Min has observed that hybrid cars are still more expensive than conventional petrol-driven ones and they are not that convenient to use because of lack of fuel points

As members are aware, the Ministry of Environment and Resources has been enhancing the incentives for Green Vehicles. From 1 Jan 06, buyers of new hybrid cars can enjoy a tax rebate equivalent to 40% of the car’s open market value, up from 20% previously. This further narrows the cost differential between green cars and conventional ones.

With the enhanced rebates, the annualised total costs of some green vehicles are similar to, if not lower than, those of conventional cars. Even though their upfront costs may be higher, green vehicle owners enjoy savings in petrol costs. Green vehicles tend to be more expensive than conventional ones, as they do not enjoy huge economies of scale. However, this is likely to change in the years ahead. Firstly more people are becoming more environmentally conscious coupled with high oil prices, many people worldwide are encouraged to consider going green.  As a result, car manufacturers are responding with a greater choice of hybrid and other green vehicles.  

We are hopeful that the more environmentally conscious Singaporeans would also find green vehicles more attractive in time to come, especially if fuel prices remain high.  

My ministry will continue to work with MEWR to continue to monitor the developments in the green vehicle market and to review the policies on regular basis.

Inter-modal Competition for Land Transport

Mr Wee Siew Kim asked for more competition between the different modes of transport in the public transport industry. I know why he is so interested. Being on the board of SBST, it will actually help SBST if there is more competition but we have to look at it on national basis. We have as a nation invested a lot of money on the MRT lines. We owe it to the people from whom the funds came from that we optimise the use of our MRT systems and that is why we have regulated the PTOs to ensure that there is minimal duplication of services along the parts of Singapore where the MRTS lines run. But it does not mean that everything is frozen. There are some places where the MRT lines are already operating near to maximum capacity, and I think at these places where the MRT lines are already primitive lines, I think there is scope for us to introduce bus services to complement the MRT services. I will ask LTA to examine that.

Mr Ong Kian Min asked about the measures to smoothen bus travels i.e. the congestion of the roads does not allow the buses to keep to their schedules, so what can we do to help smoothen the bus travels.

Sir, all bus systems in heavily built up cities face the same problem of variable arrival times at the bus stops and bunching of buses due to congestion, and therefore our experience in Singapore is not unusual or unique.

To improve the general traffic flow, LTA will continue to carry out road improvement works such as road widening where space is available and improvements to the junctions and traffic light timing, etc. It will also work with PTOs on various traffic schemes to improve the reliability of bus services. The most common and effective one is the provision of a dedicated bus lane along heavily used roads during peak periods. Another measure is the “B” traffic light signals which ensure that buses are given priority at suitable traffic light junctions.  This B signal goes green before the rest of the usual traffic lights and therefore the buses are able to move off before the rest of the traffic. This allows the buses to weave through the different traffic lanes, especially if they have to cross the roads to make a turn later on.

As an example of the new approach that LTA has taken, LTA conducted a trial for a full-day bus lane along Orchard Rd recently. This helps to improve bus speeds by 15% from an average of 13 to 15 kph. As a result, we will be implementing full-day bus lanes permanently along Orchard Rd. LTA will look into the feasibility of extending this to other roads.  LTA will also be deploying traffic wardens to ensure that bus lanes are kept clear during operational hours, complementing the Traffic Police’s enforcement efforts against illegal parking along bus lanes.

Mr Ong shared about his happy experience in London as a student where he was able to use the heavily subsidised concessionary passes. Sir, I will not join Mr Ong in extolling the virtues of the London system. This is because the low concessionary fares enjoyed by Mr Ong were a result of heavy Government subsidies. The financial  subsidies to cover operational deficits in London continues today, but is under better control because operation of the buses and maintenance of the trains have been contracted out to private operators who undertake to manage more efficiently.  Let me give you an example. Last year the subsidies for the London bus operations alone amounted to S$1,650m (549.2 million pounds) while that for the London Underground amounted to S$2,250m (748.3 million pounds). These are huge figures, but they were even much higher before.

In Singapore, the government is committed to helping low-income earners.  This is well reflected in Prime Minister’s announcement in his Budget Statement of a $2.6 billion Progress Package. The Members also know that we have a host of financial support measures for low-income earners. 

In addition, MCYS adopts a “Many Helping Hands” approach, by partnering VWOs and community organisations, like the CDCs, in reaching out to identify those genuinely in need of help, and reaching out to help them.

This system of general assistance focused on the low-income earners is a better way, instead of giving out subsidies to the entire population, or by targeting subsidies at particular services.  This allows recipients discretion on how to use the financial assistance; it prevents distortion to consumption patterns and avoids misallocation of resources.

To take Mr Ong’s example, I think it is better for us to provide financial assistance to his lower-income worker living in Tampines, and let him decide whether to spend it on additional transport costs by taking a job in Tuas on the other side of the island, or to use the money on worthwhile things, for example, a computer for his children. This way, we neither distort his travel patterns nor his needs.

And when special circumstances require additional help to be given, we are ready and able to rally such support.  For example, when transport fares were increased last year and the economic outlook at that time was still uncertain,  the transport operators, together with community organisations and the unions, were able to provide additional financial support targeted at the lower income groups. But these should be one-off measures, to tide the low-income earners over a difficult period, and should not be relied on as a systemic, or an on-going measure.

Mr Ong lamented about the reluctance of the PTOs to widen the use of travel concessions and season tickets.

These are granted by the PTOs to various groups of individuals, such as pre-school children, students and senior citizens, to help lower their cost of travelling.  These concessions remain the prerogative of the PTOs and they are actually cross-subsidised by the majority of full-fare paying commuters. The PTOs have therefore been very prudent in extending these travel concessions beyond the present groups as it would ultimately result in other commuters paying higher fares.

Public Transport to Tuas

Sir, Mr Ong Kian Min also talked about Tuas.  Sir, first let me assure Mr Ong that Tuas toady is adequately served by public transport. There are now 4 public bus services serving Tuas, with a total fleet of 41 buses, and they link Tuas industrial estate to Boon Lay MRT Station and Boon Lay Bus Interchange which are located together. SBST has planned their bus schedules to match the ridership which is concentrated during the morning and evening peaks, with very low demand during the off-peak period. PTC has periodically checked, and found that the bus services to Tuas are quite adequate.

By 2009, public transport to Tuas will further improve, when we will complete the Boon Lay Extension (BLE).  This will extend the East-West MRT line westward into the Jurong estate, into the Joo Koon Circle area.  There will be a new integrated MRT cum bus interchange there. I think workers will find it a lot more convenient and accessible when the facilities are ready.

Sir, Mr Ong Kian Min suggested that we carve Tuas Industrial Estate out of the USO, Universal Service Obligations, and allow other players to come in to provide mini-bus services.  Sir, we have actually considered this before. Our conclusion is that this is not likely to lead to better service levels at today's fares. This is because the bus ridership pattern is very peakish in Tuas, like in most other industrial estates, and the travel time also coincides with travel times elsewhere, so i.e. whoever operates there cannot be using free capacity freed up because the buses were lying idle, and therefore be able to offer a low cost service.

Sir, without the USO, the bus operators will only ply during the peak hours, with very little coverage during the off-peak hours, little or in fact no coverage.  Also, the bus operators operating mini-buses may not enjoy the same economies of scale as SBST and SMRT do.  So in short, the workers in Tuas may be worse off than today, as there is no guarantee that fares will be the same or lower than the current level, and the service may not be available throughout the day.

Sir, I must admit that employers in Tuas do face a bigger transport challenge, and therefore the workers there face a bigger transport challenge than many other places in Jurong.  For example, the travel time for bus commuters can be very long, in view of the sheer physical size of Tuas.  Let me give an example.  The 4 bus services that ply Tuas Industrial Estate take between 50 minutes to more than one hour just to go from Boon Lay Bus Interchange to the end point of their service in Tuas.   That is that one-way trip can take an hour or more.

This makes it less attractive for workers to work there, and employers there have had to compensate them in some ways for this inconvenience.  Some employers pay a higher salary.  Others offer a dedicated company bus shuttle for their employees because such shuttle services are faster, more direct and flexible, and can be customised to cater to their special work arrangements, like their shift hours.

At the end of the day, the employment market in Singapore is an open and competitive one.  Workers who are structurally unemployed will need to be re-trained for the jobs that are available, whether these are in Tuas or elsewhere in Singapore.  And employers will need a competitive remuneration package if they wish to attract the right worker, in keeping with the demands of the job, the workplace, and the skills required.  This definitely applies to the employers in Tuas too.

Quality of Bus Service

Sir, I will move on to the question by Mr Ong Kian Min.  Sir, he asked about the quality of service, whether we are setting QOS which are relevant to commuters. 

The existing QOS, which were first developed in 1994, have been evolving in tandem the service demands, and in tandem with the increasing expectations of commuters. 

To this end, the PTC recently reviewed the existing standards, and they have come out with a new set.  The revised set of Quality of Service (QoS) standards for basic bus services is now being refined with the PTOs for implementation later this year.  The existing bus service standards used to measure averages over a period of time, usually on a per week or per month basis.  This does not reflect the everyday experience very well.  The new QoS standards will be more sensitive to individual incidents of, for example,  over-loading and long waiting time, and will better reflect the experience of commuters.  One of the things we will measure, for example, will how the individual bus services comply with the scheduled headways.  At the moment we lump them all together, so it all looks very good.  But there could be a few services that actually have very poor compliance.  So this will allow PTC now to identify where are the problem areas.

Performance Standards - Benchmarking

Mdm Phua asked whether we benchmark.

Yes, we do benchmark the operators regularly to ensure that they offer a quality service that is convenient, efficient and affordable to Singaporeans.  Sir, let me explain how we have measured up.

First, we do opinion surveys.  On the whole, recent public opinion surveys have shown that the vast majority public is satisfied with our public transport system.  That is the silent majority.   The survey showed that more than 80% of the public respondents agreed that Singapore’s overall land transportation system provides adequate choices, and is well-integrated and efficient.

In addition, our system is also rated very highly by foreigners, when compared to Hong Kong, London, New York, Paris and Tokyo, which have very good and well developed public transport systems.

Besides the surveys, LTA also carries out benchmarking, which I have mentioned, and let me go into this.  The 4 areas of benchmarking are:

i)          System utilisation, which measures how well the assets are used to generate revenue, without compromising on service quality and safety.     

ii)         Fares, which give an indication of cost to the commuters and affordability.  

iii)        Productivity, which refers to how efficiently the resources are used; and

iv)        Financial performance, which in our case is important because unlike most other cities, we do not subsidise operating costs of the operators.

So when compared with 10 rail and 10 bus operators from cities in Asia, Europe, and North America, our two operators – SMRT and SBST – came up amongst the top in each of these four areas.  For example, SMRT’s rail system was consistently ranked top three in the KPIs. For buses, the KPIs showed that SMRT Bus and SBST Bus came in either first or second. In terms of fares, which are normalised using the purchasing power parity or Gross National Income per capita for comparability, Singapore’s public transport fares are amongst the lowest. 

Sir, our strong ratings are an affirmation of the quality of our public transport system and the operators.  But I think our challenge is not really what happens today, but how do we keep pace with Singaporeans’ rising expectations.  My Ministry, together with the PTC, would therefore continue to engage the key stakeholders to ensure that we continue to have a public transport system that serves the needs of most Singaporeans, and that remains affordable.

Sir, she also asked how do we make sure the PTOs do not ask for fare revisions but use their reserves to reduce fares.  First let me clarify to her that as the KPIs have shown, our system is among the most cost effective and most affordable.  And this is borne out by the past fare adjustments.  Let me give her some data.  If you look over the past 18 years, wages have gone up by an average of 182% while fares increased by only 17% for buses, and only by 33% for the MRT.   That is because the MRT, when it started, we deliberately kept the MRT fares very low for the first couple of years. 

So I can say that the bus operators have done our commuters a way of good, by way of keeping their operations very, very efficient, and by keeping the fare increases very, very low.  So are they having an overly high rate of return?  The answer is no.   Actually, their rate of return has been very modest.  I don’t have the figures here.  But I think the rate of return is in the region of about 4 to 6%, which I think for an operation with such a heavy capital investment, I think these are quite modest figures which I think Madam Phua based in the private sector would appreciate.

Sir, she asked about traffic congestion along Braddell Road.  I’ll advise her to communicate with LTA which would look into it.

Feeder Fares

Mr Chiam has asked for the feeder service fares to be reduced. He quoted a fare of 90cts for the LRT and 80ct for the trunk service. Actually, the feeder fare is exactly the same as the fare for the trunk bus services. That means that for the feeder fares and the LRT fares, paid via the ezlink card, the fare is 64 cents, not 80 or 90 cts, as quoted by Mr Chiam. But if they pay by cash, the cash fare is 90ct, and this is the same for both feeder services as well as for the trunk services. The cash fares are higher. For those who do a transfer, they enjoy a 25 ct rebate. That means those who take a feeder bus pay 64ct, but when they transfer, they get a 25 ct rebate. So in actual fact, they pay only 59 ct. So the fares are already very low.  And the advantage for those on the feeder services is that it is a flat rate.  So even though they may travel a longer distance than the first bus fare, they do not have to pay additional like what those passengers on the trunk service have to pay. Passengers on feeder buses are in fact treated very well, and pay a lot lower than what Mr Chiam See Tong had feared.

Wheelchair Accessible Buses

Mr Ang Mong Seng talked about wheelchair accessible buses (WABs). Let me assure Mr Ang that the pace of introduction of the new wheelchair accessible buses is already very rapid. There’s no way that we can change all the buses today, because it would be very wasteful. To try and retrofit the rest on existing buses would also be very, very costly.

What we are doing is we are going to fit in the new buses as they come in with the ramps. The figures show that about 40% of the entire bus fleet will be replaced by those with ramps in the next 5 years. And this works out to about 1500 buses. We will be introducing about 1500 buses with ramps over the next five years.

LTA is working with the bus operators and the relevant Voluntary Welfare Organisations (VWOs) to ensure that we have an effective deployment plan for the limited number of WABs for the initial years.  We would also enlist the help of the VWOs to publicise the bus services where these buses would be deployed.  Every WAB would have a special wheelchair label prominently displayed at the front of the bus for easy identification so that the wheelchair bound riders will know which bus to board.

Compulsory seat belts on school buses

Mr Tan Cheng Bock asked for seatbelts to be required on school buses.

If Dr Tan were here a few days ago, he would have delivered the head part as this was raised and debated.  Let me assure Dr Tan that LTA is reviewing this and we will have the decision in due course. And we will definitely carefully balance the need for safety versus the cost impact.

COE Categories

Dr Wang Kai Yuen felt that the current segregation into Category A and B distorts the allocation of car quotas, and it is timely now to amalgamate them into one.

The rationale for the current segmentation is still relevant today. The convergence of the COE prices for the 2 categories in recent years means that there is no great benefit to merging them now. There may be a variation of a few hundred dollars, usually. The times when the gap is so big are very rare.  This is because it is hard for us to predict the future preferences for car sizes.  For example, consumer preferences may change as fuel prices move up or down, or as big cars become more fuel efficient driven by high fuel prices.  More importantly, if the economy booms again, the demand for bigger cars may grow. As such, I think preserving the separate categories will safeguard the interests of smaller car buyers, and there is no immediate need to merge them.

Let me assure Dr Wang that my Ministry will continue to monitor the trend, and take his views into serious consideration, should the recent trends of lower Cat B prices persist over the long term. Thank you, Sir.