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Refereed Paper
This paper has been critically reviewed by at least two recognised experts in the field.
Originally submitted: June 1999
Abstract
Electronic road pricing (ERP) became operational in Singapore in September 1998. It replaces the manual congestion pricing schemes in the CBD and expressways. This paper outlines the key events in the development of congestion pricing since June 1975. It describes other pricing measures to manage road travel demand. These are the Additional Registration Fee (ARF) and the Vehicle Quota System (VQS) for new vehicles. The revenue from congestion pricing is about S$0.1 billion per year and that from VQS is about S$1.5 billion per year (A$1 - S$1.10 in May 1999). This paper also derives some price elasticity values with respect to congestion tolls from empirical data. Congestion pricing appears to be twice as effective as petrol price increases in reducing car travel, and would be only similar to petrol price in inducing mode shift to public transport. The balancing of fixed costs imposed on motorists, such as the VQS premium and registration fees, and usage costs such as congestion tolls is a complex issue. ERP tolls would have to be much higher than the current toll rates if they are to replace VQS completely and maintain the same total revenue.
Abbreviations
ALS Area Licensing Scheme
LTA Land Transport Authority
ARF Additional Registration Fee
MRT Mass Rapid Transit
CBD Central Business District
PIE Pan Island Expressway
COE Certificate of Entitlement
RH Restricted Hours
CTE Central Expressway
RPS Road Pricing Scheme
ERP Electronic Road Pricing
RZ Restricted Zone
GPS Global Positioning System
VQS Vehicle Quota System
INTRODUCTION
Congestion pricing is the charging of a toll to reduce congestion at specific times and locations. Singapore implemented the world's first congestion pricing scheme in June 1975. The scheme was called the Area Licensing Scheme (ALS) and motorists then had to purchase daily or monthly licences to enter the CBD during the restricted hours (Fan et al. 1992; Menon et al. 1993).
Congestion pricing has continued to arouse interest in many countries faced with a rising congestion problem. Hong Kong is about to complete a feasibility study in its second attempt to introduce congestion pricing (Opiola 1998). The Netherlands is working on a...