ERP Enigma

Six years ago, former Speaker of Parliament Mr Tan Soo Khoon known for his sagacity brought the Singaporean parliamentarians a peek into the future when he spoke on the hot topic of Electronic Road Pricing (ERP) during a budget debate. In his speech he said that the Government’s policy has been that the cost of ownership of cars would be reduced over the long run, but the cost of usage will increase thus the ERP charges will be increased periodically. In his usual actics way of putting his point across, Mr Tan said "We have ERP almost everywhere, or soon-to-be everywhere, (and) we are going to have ERP day and night. I think very soon, ERP will mean ‘every road pay’. “Sir, the day will be quite soon when the only safe place to leave your vehicle is at home, if you are lucky enough to own a landed property. You can well imagine that, one day, if I drive out of my house, the first thing I hear would be this ‘beep’ sound coming from the little device on my dashboard, and everywhere you go, you will be hearing ‘beep, beep, beep’, instead of car horns.”

While the worst-case scenario describe has yet to emerge into a reality, come 7 July motorists will have to face higher ERP charges and those travelling along certain roads leading into the city and away from it will be greeted with more gantries across their path. The government justify the introduction of the gantries in respond to growing congestion on our roads as growing traffic congestion will have an adverse impact on the economy.

From July 7, family life in Singapore should improve, at least for those who pass through traffic gantries as congestion has an adverse impact on family life as family spends more time on the road rather than together. Businesses, too, will become more competitive as the cost of crossing these gantries goes up, leading to faster travel times, which should then lead to lower transport costs overall.

However those who are against the increases in the ERP charges and the introduction of new gantries would argued that the ERP system has helped in smoothing traffic flow, especially in the Central Business District. The main quarrel with the timing of the new round of increases is that it comes in the wake of higher petrol prices and insurance costs. Many would argue that traffic congestion here is still tolerable compared with the traffic jams in Bangkok, Jakarta and even Kuala Lumpur. In fact, some contend that traffic in Singapore could be even smoother but for the ubiquitous road works, tree pruning and numerous traffic lights. Some would say that the reason why traffic is delayed on the roads is because if the presence if numerous traffic light. Singapore probably has more traffic lights per kilometre of road than anywhere else in the world.

The business community has also voiced their opposition to the increases. Car parks in the malls dropped dramatically when the announcement and the problem only seems to be abated when the authorities decided to introduce a “window period” in the mornings between 9.30am and noon that business at the malls in the Orchard Road area improved.


In any case, why raise costs when inflation is already ranging at record levels? The government has been encouraging us to switch to alternative form of transportation such as buses, Mrt and taxis but if the authorities want you to switch to public transport, why do buses and taxis also have to pay ERP charges? Last year, SBS Transit had to pay $2.9 million in ERP charges, $5.8 million in road taxes and absorbed almost $37 million in output GST (up from $28.5 million). The increases in all the charges would ultimately be transferred to the consumers who have had to bear the cost. If the ERP system is not a revenue-raising exercise then the funds raised is surely eye raising and this is only from a part of the public service company. Increase the number by including the taxi companies, SMRT and TIBS.

As the number of gantries increased and the oil prices continues to rise, we are forced to resign and accept it as part of life in Singapore. ERP has synonymous be known as Every Road Pay.