Environmentally Sound Transportation Planning in Singapore

Submitted by iges_partner on Wed, 2005-11-09 12:56.


1970 - ongoing

Self, revenues collected from charges and fees

Mainly national/city government and private sector

Singapore is a city-state located in Southeast Asia, with a population of 4.13 million in 2001. It had an area of 682.3 square kilometres in 2001; and built up area accounted for nearly 50 percent of total land use. The per capita GDP of Singapore at current market prices was S$37,145 (U.S.$1 was roughly equivalent to S$1.78) in 2001. Since national independence, policy makers in Singapore have been serious about integrated urban, land-use and transportation planning. The fundamental motivation for Singapore was not the environment but economic prospects, and policy makers envisioned a prominent manufacturing, commercial and trading centre by utilising Singapore’s unique geographical location. Singapore was successful in meeting unprecedented travel demand while controlling congestion and environmental pollution to acceptable limits (within World Health Organisation and U.S. Environmental Protection Agency levels) while its economy grew from S$7.5 billion in 1965 to S$138 billion in 2001 (at 1990 market prices). Singapore employs a mixed approach of command-and-control and market-based-instruments to manage traffic demand and related environmental problems.

The objective of the planning process in Singapore was an integrated approach that assimilated urban, transportation and environmental planning. This approach reduces over-reliance on “end-of-the-pipe” measures alone and fixes much of the pollution problem at source. It is also an ongoing process, with adaptation and alteration of policies over time.

The description of activities described here follows the historical evolution of the issues and responses.
Stage 1, Initial phase: Singapore separated from Malaysia and became an independent city-state in 1965; at the time, a housing shortage and unemployment were major problems in the city. Much of Singapore was a densely-packed settlement surrounded by shantytowns in the coastal area. The average density of the city’s core 400 hectares exceeded 1,200 persons per hectare in 1959. In 1965, nearly 70 percent of the Singapore population of 1.8 million was concentrated within a 5-km radius from the port of Singapore, then the city centre. The Land Acquisition Act passed in 1966 (when it was still in the Malaysian federation) gave the government a sweeping hand to acquire any land, making it indeed land-reform legislation. An aggressive pursuit of urban planning, housing development and industrial estate development went ahead by the Urban Redevelopment Authority and Housing and Development Board (HDB) under the Ministry of National Development. Strategic location and economic liberalisation attracted huge manufacturing investments after 1965 and Singapore maintained double-digit economic growth until the first “oil shock” in 1973. In late 1960s, Singapore also attracted attention from financial and commercial sector investors, apart from the manufacturing sector. In the 1960s and 1970s, the growth in per capita car ownership in Singapore was much higher than the growth in per capita income. In the 1960s alone, car ownership doubled and motorcycle ownership tripled, and income was constantly rising, while the public transportation system was slow and unreliable. Traffic congestion was at its peak in 1975, with 19 km/hour the average vehicular speed during peak hours.
Stage 2, More aggressive pursuit: Realising that growing economy needs sound long-term city planning in land-scarce Singapore, planners commissioned a four-year State and City Planning (SCP) Project, a concept plan for the next 20 years, and the project was completed in 1971. For the transportation sector, the project found that by 1992 it would be environmentally unacceptable and physically impossible to build road infrastructure to meet prevailing private automobile growth. It suggested easing traffic congestion within the business centre, developing a rapid transit system in addition to expressways, and that buses alone would not be able to meet public travel demand. Following the recommendations from theh SCP, the Singapore government implemented a number of measures between 1972 and 1992, including private vehicle ownership restrictions by high import duties, additional registration fees (ARF), a vehicle quota system, private vehicle use restrictions in city centres by the Area Licensing System (ALS), revamping of the public transportation, expansion of expressway systems, and construction of 67 km of rail-based Mass Rapid Transit (MRT). Key dates: 1968: Ministry of Communications established 30% import duty on cars 1970: Bus service reform begins 1972: Import duty and ARF is increased 1973: Singapore bus service is unified 1974: ARF raised to 55% 1975: ALS scheme initiated, ARF raised to 100%, Preferential ARF started 1978: ARF raised to 125% 1980: ARF raised to 150% 1987: MRT begins 1989: ALS extended to other vehicles 1990: Vehicle Quota System begins 1994: ALS implemented whole day 1995: Road Pricing System on expressway 1998: Electronic road pricing begins 1999: ERP extended to highways

Despite strong economic growth and a 20-fold increase in office space and scale of employment, Singapore could maintain the environmental impacts from transportation systems under acceptable limits. By 1995, the level of motorization was slightly over 100 cars per 1,000 people, which was the general trend for cities with one-third the income level of Singapore. Recent data suggest that the average speeds during rush hours are 20 to 30 km per hour on city roads and 45-65 km per hour on expressways. Also, the levels of major air pollutants in Singapore are still well within acceptable limits of the WHO and US Environmental Protection Agency (see Table 1).

Table 1: Singapore ambient air quality.

Pollutant type Average time 1982 1988 1994 1999 Standard
Carbon monoxide 8 h (roadside), ppm 1-3 1-3 1-3 1-3 9
Lead: roadside 3 months, g/m3 1.5 0.4 0.2 0.1 1.5
Lead: ambient 3 months, g/m3 0.6 0.2 0.1 0.1 1.5
Sulphur dioxide Annual mean, g/m3 29 20 19 22 80
Nitrogen oxide Annual mean, g/m3 18 16 29 36 100
Ozone Max 1 h, g/m3 450 176 237 181 235
Ozone* 1 h concentration >235 g/m3, days 30 0 1 0 -
PM10 g/m3 - - 48 34 50
TSP g/m3 70 47 55 - 75
Source: Ang and Tan (2001) citing Pollution Control Department, Ministry of Environment, Singapore.
* Ozone measurements in 1982 were conducted using the Neutral Buffered Potassium Iodide Method which was subsequently replaced by the Ultra-Violet Photometric Method

From the transportation and environmental viewpoint, the countermeasures used in Singapore include cleaner vehicles, controlled emission limits, cleaner fuels and controls of traffic congestion. The first three measures are being tried with many cases of success in cities around the world, while last one remains a big problem. In this context, Singapore’s experience is a landmark success. Discussions here therefore focus on efforts for controlling traffic congestion through travel demand management (TDM). This approach was principally implemented through four major instruments that limit the number of private cars on the road, as well their uses: (1) fiscal measures of to restrain car use, (2) the Vehicle Quota System (VQS), (3) the Area Licensing System (ALS), which was recently upgraded to the Electronic Road Pricing (ERP) system, and (4) efficient and affordable public transportation system.

Economic instruments (1)
Restraining car ownership by fiscal measures
Fiscal measures for restraining car ownership in Singapore include import duties levied through the Customs and Excise Department, a goods and services tax, a registration fee, the Additional Registration Fee (ARF), and road/fuel taxes. Before May 2002, the import duty was 31 percent for cars, 12 percent for motorcycles, 7 percent for taxies and 31 percent for buses with eight seats or less (based on Open Market Value, or OMV). As of 4 May 2002, the import duty is 20 percent of OMV for cars. The goods and services tax stands at 3 percent of cost-insurance-freight (CIF) cost plus custom duty in 2002. The ARF, originally introduced in the late 1950s but revised several times, stands at 130 percent of OMV. The registration fee was S$15 in 1968 and increased to S$1,000 in 1980, but after introduction of the ERP in April 1998, it was reduced to S$140. Fuel taxes vary with fuel grade. The best grade of gasoline is taxed at 35 percent of the pump price, before a 3 percent goods and sales tax. A tax on diesel was lifted in late 1998. The annual road tax varies from 70 cents (Singapore) per cubic centimetre (cc), for cars with 1000 cc engines, to 175 cents per cc for vehicles with engines exceeding 3000 cc. Recently, some rebate about the road tax arose after introduction of the ERP. To lessen the implications of high registration fees on vehicle renewable and modernisation rates, a preferential ARF was launched in 1975. In this scheme, the government reduced ARF rates for the registration of new vehicles when owners simultaneously scrap older vehicles of the same class and size.

Economic instruments (2)
Electronic Road Pricing (ERP)
ERP was implemented in September 1998, replacing the Area Licensing System (ALS). ERP is an innovative tool for implementing congestion pricing. The basic idea of ERP is similar to ALS, but ERP is technologically sound so that charges can be varied over time and location, reflecting the true cost of vehicle use in central business districts. In this system, all 33 ALS “gantries” (entry points) were replaced with ERP gantries for the 720 ha core area, and each vehicle to enter into the restricted zone must be fitted with an “In-vehicle Unit” (IU). The IU unit reads from a stored-value cash card, from which charges are deducted automatically as soon as vehicle enters into the restricted zone through an ERP gantry. At the moment, pre-determined ERP charges vary each half-hour of the day, from S$2.50 during peak hours to 50 cents during off-peak hours, depending on the road section. Charges are different for motorcycles, cars, cargo vehicles, taxies and buses, etc.; different IU units are installed in each category of vehicle. At the moment, charges do not fluctuate depending on the traffic conditions in Singapore. ERP charges are subject to review every 3 months to suit changing traffic conditions, these charges are basically tied to prevailing speeds with the aim of maintaining traffic speeds of 45-65 km per hour on expressways and 20-30 km per hour on arterial roads. Frequent adjustments, such as special-reduced ERP pricing during school holidays when traffic volume is lower, are possible, and being carried out.

Organisational arrangements
Public transportation system
In the 1960s and early 1970s, public transportation was being provided in Singapore principally by three groups: a large British-owned bus company, eleven smaller Chinese-owned companies, and a fleet of unlicensed taxies. The result was a slow, inadequate and unreliable system. Efforts to organise public transportation were made by the government in 1970, ultimately resulting in the forceful merging in 1973 of all into a single company held by the government, which floated it on the Singapore Stock Exchange in 1978. These measures imposed by government improved the quality of public transportation and encouraged private motorists to abandon the idea of owning a car due to the high ownership and running costs. To introduce competition, the government later allowed one more bus company, and today two bus companies and four taxi companies are operating in Singapore, in parallel with the rail-based MRT services.

Regulatory instruments (1)
Vehicle Quota System (VQS)
The VQS was announced in February 1990, with the intent to cap the number of newly registered vehicles. The VQS is an innovative mechanism to limit the number of vehicles, and uses a market-based approach. In the VQS, the government fixes the number of allowable vehicles, and prospective vehicle owners must obtain a Certificate of Entitlement (COE) through open bidding to allow ownership of a vehicle, valid for 10 years. The bidding is opened each month and a list of bidders is arrayed in descending order. The bid quoted by the last bidder of a designated quota is called the “quota premium,” which is then levied on all successful bidders to obtain a COE. Table 2 below lists the COE price as an illustration. Beyond 10 years of COE ownership, one should either de-register or acquire a new COE at the price of the 12-month moving average quota premium of that category.

Table 2: Certificates of Entitlement (COEs) bidding, 20 November 2002.
Category Quota Quota premium, S$ Total bids received Number of successful bids Unused quota carried forward
Category A (cars 1600 cc and below, and taxis) 1,334 $29,008 1,942 1,328 6
Category B (cars 1601 cc and above) 663 $28,001 879 597 66
Category D (motorcycles) 835 $1 676 676 159
Category C (cargo vehicles and buses) 576 $13,789 736 567 9
Category E (open) 1,095 $28,005 1,445 1,094 1
Notes: A, B and D are non-transferable categories. C and E are transferable categories.
Source: http://www.onemotoring.com.sg/main/default.asp, accessed on 25 November 2002.

Regulatory instruments (2)
Area Licensing System (ALS)
The ALS is a road pricing mechanism where each car is charged for its contribution to congestion in the central business district (CBD). This measure reduces car use in the CBD, in contrast to import duties, ARF and other measures such as road or fuel taxes, which cannot influence actual use once a car is on the street. Singapore’s ALS scheme was based on a “cordon pricing” system and was introduced in 1975. The cordoned CBD area of 5.59 sq. km, referred to as the “restricted zone” (RZ) was isolated from the rest of the city by constructing 22 entry points. In the scheme, advance purchase of a license was required to enter into the restricted zone during morning peak hours (7:30 to 9:30 a.m.), at a cost of S$3 (later changed to S$4) a day (or S$ 60 per month, later changed to S$80). The paper-based system required verification by observers at the entry posts. Non-complying vehicles were issued a fine sent by mail to the owner’s home. At the same time, public parking charges in the restricted zone were raised and an additional surcharge was levied on private parking operators to discourage car use. After 27 years of ALS implementation, the inbound traffic volume in CBD in morning peak hours was still less than it was before ALS implementation, demonstrating its success.

Technology component
There are some technology-related factors that also played an important role in Singapore. ERP for example, depends on sophisticated technology that allows different pricing according to the time of day, reflecting traffic conditions. Its predecessor, ALS, was less technology-intensive. A computerised traffic control system was already in place by 1986 in the central business districts in Singapore, and this was replaced with a more advanced automated traffic signalling system, called the Green Link Determining System. GLIDE is a traffic-adaptive signal control system that is monitored centrally to adjust to changing traffic conditions. Efforts are being made to create a global positioning system- (GPS-) based co-ordinated public taxi calling system, which will dispatch taxies automatically to customers from the nearest location, although individual taxi operators are already using such a system. These high-technology measures provide support to the non-technology measures of car ownership and use restrictions.

• Key approaches include integrated planning that assimilates urban planning, land use planning, transportation planning and environmental planning, in view of potential economic growth. For cities undergoing rapid economic growth, “end-of-the-pipe” controls are not enough, as economic growth accelerates many variables responsible for the worsening environment. Thus, integrated planning is a must.
• Vehicle ownership and use restriction. High economic growth accelerates automobile ownership in cities. In such case, some form of control over the ownership and use of cars is essential. As much as possible, market-based mechanisms (such as pricing that targets traffic congestion) should be utilised to exercise such controls.
• Policy consistency and feedback. No policy is ever perfect. Well-planned measures with the ability to modify or change over time, with good feedback mechanisms, are most successful.
• Providing alternatives. In any sound transportation planning approach, it is important to provide a set of reasonable choices to the public. Demand for human mobility can be fulfilled through a number of different ways; a policy that is rigid and does not offer such choices is less likely to succeed. For example, when Electronic Road Pricing was implemented in Singapore, commuters could choose to (1) pay a charge and drive smoothly (2) change their time of travel and pay a lower charge (3) use an alternative road and not pay the charge, (4) use public transport, and (5) use other schemes such as park-and-ride (park the car and ride on the transit system).
• Cost-sharing. From these charges and fees, Singapore generates more revenues than it invests in the transportation infrastructure. This outcome shows that such revenue-generating mechanisms can relieve the financial burden of transportation policies on government.

Singapore’s critical instrument for transportation planning has potential for application elsewhere, especially in cities with huge automobile problems and a lack of revenue to built infrastructure, such as Bangkok or growing Chinese cities. Not all of the instruments will be applicable elsewhere, but some of the measures such as ALS, parking regulation, and fiscal control on ownership have a good scope for applying elsewhere. Being a city-state, Singapore enjoyed a certain ease of policy implementation compared to other cities that do not have such clear functional boundaries and have too many interactions outside of the city. Strong institutional arrangements and ability to enforce the measures are also key factors. In nearby cities, especially Bangkok, Kuala Lumpur and Manila, vehicle ownership and use restraints have been proposed in the past. In Manila such restraint were proposed in 1977, but such ideas were later dropped, apparently due to insufficiency in enforcement mechanisms. Similarly, proposals have been made several times since late 1970s for car-restraining policies in central areas of Kuala Lumpur and Bangkok. Three Norwegian cities (Bergen, Oslo and Trondheim) initiated such schemes in 1980, covering wider areas than in Singapore. High-technology options, especially ERP and Intelligent Transport Systems (ITS) have attracted attention in developed countries. Canada, Norway, and the United States are already carrying out initial applications while Chile, the Netherlands and the United Kingdom are expected to do so. London started a system similar to that of ALS from November 2002, with a 5-pound charge to enter into the core area.

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Land Transport Authority
PSA Building, 460 Alexandra Road, Singapore 119963, URL: http://www.lta.gov.sg/

Ministry of Environment
40 Scotts Road, Singapore 228231, URL: http://www.env.gov.sg/

Urban Redevelopment Authority
45 Maxwell Road, The URA Centre, Singapore 069118, URL: http://www.ura.gov.sg/

Housing and Development Board
480 Lorong 6 Toa Payoh, Singapore 310480, URL: http://www.hdb.gov.sg/

Dr. Shobhakar Dhakal

Senior Policy Researcher


Institute for Global Environmental Strategies
2108-11, Kamiyamaguchi, Hayama, Kanagawa, 240-0115 Japan
Tel: +81-46-855-3700
Fax: +81-46-855-3709