Zubaidah Jalil -
Two things soon become apparent to a new driver on Singapore’s roads: first, there are very few beat-up cars anywhere insight and, second, it’s unusual to be caught in a traffic jam.
These observations may appear to be disparate, but they are in fact closely linked — the result of a government policy to limit the number of private vehicles on the roads in the land-scarce country.
The government enforces the policy by controlling the number of permits, called Certificates of Entitlement (COEs), which grant individuals the right to buy a private vehicle. Prices are market-determined, as participants across the 5.6-million-strong Asian nation vie against each other through an open-bidding system.
This year, for the first time ever, Singapore’s government is issuing zero-per cent growth on the quota of new cars and motorcycles come February 2018, citing land scarcity and planned investments in public transport infrastructure.
In the past, authorities have allowed for growth in the overall number of COEs at rates between 0.25 and 0.5 per cent per year.
“Twelve per cent of Singapore’s total land area is taken up by roads,” the Land Transport Authority said in a statement. “In view of land constraints and competing needs, there is limited scope for further expansion of the road network.”
The new quota decision has received mixed reactions.
Average Singaporeans worry that the stagnant vehicle supply might exert upward pressure on COE prices, which are already prohibitive, putting dreams of car ownership firmly out of reach.
“I’ve never considered a first-hand car and I can’t afford it even if it’s a second-hand car,” said Tan Kai Shian, who shares her parents’ car to drive her husband and toddler around.
The certificates aren’t cheap — the last round of bidding for a car permit hit S$41,617 ($30,500).
If you add on taxes, registration fees and the open-market value of the car, and the cost of a mid-sized sedan can rise to over S$100,000.
The permits are only valid for 10 years, after which owners either scrap them or renew them for a maximum of another decade. This explains why only gleaming, shiny automobiles are seen on the city-state’s roads.
Car retailers are similarly bracing for lagging sales when the quota freeze is enacted. “Business will be affected negatively overall,” said Mohamed Taifoor, a car dealership owner.
“The freeze on new car sales will lead to dealerships shutting down, especially smaller outfits that don’t have the luxury of reserves to tide them over until the freeze is lifted,” he said.
Other industry insiders say the change is merely a correction, recalling the glut of new cars in 2008 when COE prices dropped.
The COEs on these cars will reach their 10-year-validity mark in 2018, meaning owners may decide to release them back into the market, neatly coinciding with the expected start of the freeze. Ride-hailing company Grab has praised the government’s quota freeze saying it is a step towards creating a “car-lite Singapore.” It says it supports Grab’s goal of reaching peak efficiency for existing vehicles already on the road.
“We believe the primary responsibility of ride-hailing companies is to convert as many personal cars into shared assets... as opposed to operating a car rental business, which leads to an oversupply of unutilised vehicles,” said Grab head Lim Kell Jay.
Popular food delivery app FoodPanda, which uses motorcycles, says there are ample motorcycle permits in the market to go around. But the company has been looking at ways to diversify its modes of delivery, said Luc Andreani, the company’s managing director, including by using electric scooters and shared bicycles.
Measures like these are probably what the move is aiming for. Reduced dependence on private transport mean fewer vehicles on the road, cleaner air, shorter transit times and ultimately fewer productive hours lost in traffic jams — at least until the measure is reviewed in 2021.
Until then, it seems likely that the status attached to owning a car in Singapore will continue to shine bright.
— dpa
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