The ERP revenue collected goes to the Government’s Consolidated Fund to fund programmes that benefit Singaporeans. The annual amount collected is much less than what the government spends on road improvement projects. For example, the total amount collected for Financial Year 2009 and 2010 is about $149 million and $159 million respectively. In comparison, we have invested more to improve our road networks. The recently completed Woodsville Interchange Upgrading project costs $130 million and the Marina Coastal Expressway, which is currently under construction will cost $4.1 billion. ERP operating hours and charges are set based on traffic conditions. The amounts collected are a function of ERP operating hours and charges, as well as the traffic volume or number of vehicles passing through.
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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