Delay in Roll-out of Distance-based Charging in Next-generation ERP System

15 Mr Gerald Giam Yean Song asked the Minister for Transport (a) what is the reason for the delay in the roll-out of distance-based charging in the next-generation ERP system (ERP2) despite this being a key feature and cost component; (b) what is the timeline for the implementation of distance-based charging; and (c) how much of the $556 million ERP2 contract was spent on this feature.

The Senior Minister of State for Transport (Dr Amy Khor Lean Suan) (for the Minister for Transport): The key reason for switching to the next-generation ERP, or nexgen ERP, is that the current system, which has been in place since 1998, is reaching the end of its operational life.

After studying several options, LTA concluded that the Global Navigation Satellite System, or GNSS, was the most suitable technology to use for nexgen ERP. It will remove the need to maintain the current bulky gantries and generate accurate real time traffic data to support transport policy, planning and traffic management.

It can also potentially be used for distance-based charging. There is no specific contract cost attributable to this feature, as it is part of the system design in the contract.

The Member asked about the timeline for implementing distance-based charging. Let me clarify that this distance-based charging is a different approach for congestion charging. The current approach is point-based or cordon pricing – vehicles are charged when they cross a specific point or a cordon. As announced earlier, such distance-based pricing is several years away. Give the nexgen ERP system some time to settle down first. In the meantime, we will study different approaches and options.

Mr Speaker: Mr Giam.

Mr Gerald Giam Yean Song (Aljunied): I thank the Senior Minister of State for the answers. I have some supplementary questions. First, will the distance-based charging – when it is rolled out eventually – be revenue neutral for the Government, compared to the current ERP system? And if so, will we expect a reduction in road tax once the distance-based charging is rolled out?

I am also concerned about how distance-based charging may impact individuals who drive or ride to work like taxi drivers or private hire drivers or delivery riders. So, will there be concessionary distance charging rates for these groups?

And lastly, will coupon-less charging for roadside parking, be rolled out in the first phase of this new system?

Dr Amy Khor Lean Suan: Let me thank the Member for his supplementary questions. As I have said, the reason why we have rolled out nexgen ERP is because there is a need to replace the current system, which is nearing the end of its operational life. And when we evaluated various technologies, it was found that GNSS was the most appropriate technology given that we will then be able to do away with bulky gantries, which occupy road space and also be able to avoid, for instance, the need for manpower intensive maintenance of these gantries. In addition, this technology based on GNSS will be able to give us accurate, real-time traffic data, which will help us to do even better in terms of transport policy, planning and traffic management.

As I have noted, the system also has the capabilities for, and potentially we can implement, distance-based charging. But, I think our current focus really is on ensuring that the installation process for the million or so motorists in Singapore, will take place as smoothly as possible. As I have said, we are going to roll this out around second half of 2021 and it will take about 18 months. We need to give the nexgen ERP time to settle and also to give us time to collect information on traffic patterns, travel patterns, distance travelled impact on the different types of motoristsand so on. Then, we can study the different options and approaches, and come to a decision.

So, with regard to his questions, about whether it will be revenue neutral and what about the other taxes and so on. I think it is premature, we will have to study all these different approaches first in order to come to a decision. As I have said and I think we have consistently said – any form of distance-based charging is several years away.

With regards to coupon-less car park charging, Parking.SG is already able to do this. And in fact, it is already rolled out to many car parks. This system also has the capability to do that, but it is not a key feature nor a key criterion for us adopting this technology.

1.15 pm

Mr Speaker: Order. End of Question Time. Leader.