The Vehicle Quota System (VQS) is part of our holistic approach to deal with congestion. Its objective is to control the growth of the vehicle population at a sustainable rate.
In the three years prior to the implementation of the VQS in 1990, the vehicle growth rate averaged 6.8% per annum. Between 1975 and 1990, the growth rate of the car population soared as high as 12% per annum in some years.
Following the implementation of the VQS, the vehicle population grew at an average annualised growth rate of about 2.8% between 1990 and 2008, which was well within the allowable growth rate of 3.0% set by the VQS for this period. Over the years, the vehicle growth rate has been gradually lowered to 1.5% p.a. in 2009 and 1.0% in August 2012, before being further reduced to 0.5% from February 2013, and 0.25% in 2015.
In view of Singapore’s land constraints and our commitment to continually improve our public transport system , the vehicle growth rate has been reduced to 0% with effect from February 2018 for COE Categories A, B and D. The existing vehicle growth rate of 0.25% per annum for Category C will remain unchanged until 1Q2021, to provide businesses more time to improve the efficiency of their logistics operations and reduce the number of commercial vehicles that they require.
Without the control on vehicle growth, it is likely that a buoyant economy, coupled with the desire for car ownership, would have led to an explosive demand for car ownership.
Given the land constraint in Singapore, there is insufficient space to accommodate a high level of car ownership. In fact, the land area currently taken up by the road network is already about 12%, comparable to that used for housing (14%).
If the VQS were to be discarded and we were to rely only on road pricing to manage traffic congestion, ERP charges would have to be very much higher than today’s rates in order to achieve the same level of traffic restraint. A much more extensive coverage of ERP would also be needed. These would have an adverse impact on businesses, especially transportation or freight forwarding companies and retail businesses in the Central Business District (CBD). Being recurrent and charged on a daily basis, high ERP charges may be more unacceptable than a one-time high upfront ownership cost.
Therefore, a two-pronged approach should be retained i.e. VQS to control the growth rate of the vehicle population and hence the overall demand for road space; while ERP manages congestion on specific roads/areas by restraining vehicle usage.
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