New COE quota allocation Options

[Picanto]

SINGAPORE: Changes to the Vehicle Quota System will be made in April. This was announced by Transport Minister Raymond Lim in Parliament on Thursday.

A new formula will be used to determine the COE quota. This will allow authorities to better manage the growth of the vehicle population, by removing yearly fluctuations in supply.

Under the new methodology, the Land Transport Authority (LTA) will recycle the COE quota from the actual vehicle de-registrations in the most recent 6-month period back into the system. LTA says this eliminates the need to make any corrections due to any under- or over-estimation.

Traffic jams are a familiar frustration for many drivers. And efforts by transport authorities to curb the number of vehicles on the roads have had limited results.

For example, as of May 2009, there were 907,566 vehicles on the road. In January 2010, that had grown to 929,277 - an increase of 2.4 percent, higher than the allowable growth rate of 1.5 percent.

In Parliament on Thursday, MPs called for tighter controls.

Hri Kumar, MP for Bishan-Toa Payoh GRC, said: "As a matter of logic, we cannot allow car growth indefinitely. So what is the long-term strategy, particularly when we run out of roads to build?"

One solution is to change the way authorities calculate the number of Certificates of Entitlement (COEs) for release each year. Currently, this is largely based on an estimate of the number of cars to be de-registered or scrapped each year. Other factors include the annual allowable growth rate and adjustments for under- or over-projections from previous years.

But as authorities found out, estimates aren't always reliable.

Minister Lim said: "Dr Lim (Wee Kiak) asked, I think his first question was, how is it that we persistently had this over-projection, that we should have washed it out the following year. The reason is that we persistently over-projected every year. Let's say last year we over-projected for the current year, if we over-project it again, we add to the problem."

So from April, the calculation will take into account the actual number of vehicles taken off the roads. This includes both de-registered cars and temporary COEs that have expired or were cancelled.

And instead of an annual quota, figures will be revised every six months. Take for example, there are 800,000 vehicles as of January. Based on the allowable growth rate of 1.5 percent, there will be an additional 6,000 COEs for sale every six months. On top of the number of vehicles de-registered in the same period - for example 20,000 - this means the COE quota for July to December will be 26,000.

This direct replacement system is similar to that implemented before 1999. But back then, as quota numbers were released annually, there were complaints from industry players that the time-lag was too great.

Now, however, with a switch to a six-monthly revision, Transport Minister Lim said the time-lag issue is reduced. His ministry is also not ruling out shortening the quota period further if necessary.

Mr Lim added that further changes to the annual allowable growth rate, which halved from 3% to 1.5% last year, may be carried out in 2012. The move is meant to be more responsive to the market, and car dealers said they no longer need to second-guess the authorities when deciding the amount of stock to bring in.

But with the changes, the number of COEs is likely to be reduced, which means car prices may go up.

[Ben5266]

Hi Mr. Minister, short term sounds good in capping the number of cars.
But since the COE is quite high now and many of us just changed 2-3 years back when COE was ultra low, we are unlikely to scrap our car early. Or, we will sell our car in secondary market since the paper value is lower.
So, the new COE release for the next few years will be low and this will keep the COE price high.
But then, when come 6-7 years later, most of these cars will be reaching 10years and suddenly, many cars will be taken out of our road as few are taken out in mid term. Then, the supply of COE will spike and COE price will crash.

I think the supply of COE needs to be within a narrow band by not allowing it to dip too much nor surge too much. The proposed formula is a good start but if it reduces too many from previous months, we need to bring it up closer.

Good luck to new car vendors, they need to weather the winter for the next few years before the bumper year.
Good time for 2nd hand car dealer and workshop.
My opinion. Thanks.

[Ladykillerz]

talk is free.~
projected plan is bullsh|t without an actual result.

no point stating figures and detailed plan but yet never follow.
just show the roadmap on actual figures!

hope to see something is done positively asap! =P

[Gt81]

its a valiant effort but i am always thinking...since everyone feels that there is simply too many vehicles on the road (and yes..it is simply too many...jams everywhere)..why are these people still talking about reduction in vehicle growth? They should be talking about reduction of vehicles on the road, isnt it?

[Nom107]

how the AAAAA***** do his math ???? do u belive or not

just 1 to push up up up only !!!!

[Scoobydoo]

Our streets really getting damn crowded. Same problem as public transport during rush hour.

Actually, it might be a welcome change if these two issues are eased.

I know it's unfair to some people when things become unaffordable etc... but Sg is so land-scarce. There will be a limit to how much we can be fair to everyone.

Pricing itself won't stop people from buying cars; people will just compromise on their dream car and settle for cheaper brands. But the end result is still the same number or cars on the road. Only with COE can they control the absolute number plying the streets.

[Nmnhnlm]

If thats the case, then COE is USELESS.........

Other countries do NOT use MONEY to determine car growth.....only SG..........Those b.a.s.t.a.r.d.s will have retribution one day. They will be cursed for generations....... God will punish them

[Angcheek]

If thats the case, then COE is USELESS.........

Other countries do NOT use MONEY to determine car growth.....only SG..........Those b.a.s.t.a.r.d.s will have retribution one day. They will be cursed for generations....... God will punish them

lol

[Theone2010]

Minister Lim said: "Dr Lim (Wee Kiak) asked, I think his first question was, how is it that we persistently had this over-projection, that we should have washed it out the following year. The reason is that we persistently over-projected every year. Let's say last year we over-projected for the current year, if we over-project it again, we add to the problem."

i blur, answer like no answer, or they too busy collecting money from PARF, COE, ERP???

[Ronnchee]

Every Milistry performance is evaluated by small dragon.

Those Milisters who cant attain the desired KPI, their head will be chopped.

Hence Leg Transport Authority come up another ingenious idea to suck more blood fr the commoners.

[Roh96]

The damage from over projection and 3% growth already done and we can really feel it from daily road congestion and jam. By reducing growth to 1.5% or recycling the quota will not solve the traffic problem....it is still a growth and number will keep increasing.

[Cybertech]

All our those High Up there one basically all Fire-Fighter, ie where got fire, go there and put off fire.
Never got the problem solved. Housing also like that, keep changing rules until I give up reading them.

[Shull]

Minister Lim said: "Dr Lim (Wee Kiak) asked, I think his first question was, how is it that we persistently had this over-projection, that we should have washed it out the following year. The reason is that we persistently over-projected every year. Let's say last year we over-projected for the current year, if we over-project it again, we add to the problem."

In other words, they farked it up...what's so difficult about putting it into words? why must use such a long essay to say "we farked up the mathematics"

[Fuelsaver]

wen politisians tok, they mus b diplo-matic. so cant say fattup maths. but y didn't they realize d over-project earlier. n i thot garment so smart n won't accept anythin based on projection, estimation n d likes. they always hav figures to justify u c..

isit unspoken rule on projection so car dealers n AD n PI can survive???

so i really confused by all their po-li-cies :\

This post has been edited by Fuelsaver: Mar 12 2010, 12:28 AM

[Ben5266]

Wait... If my memory serves me right, last time they said the strategy then is to use ERP to curb the car usage. Then, gov can release more COE to fulfill our dream of owning car. Remember the headline "ERP enable more Singaporean to own car"? As a result, COE price crashed and everyone was happy with the low COE price but cross with the additional ERP gentries. So, It is not over-project issue but strategy.

[Coltplussport]

I thought the new allocation method is back to basic. It is good and should have been implemented long ago. The estimate method use now must be thought out by some gek kiang scholar then, but how come no one oppose to it?

[Coltplussport]

Actually the parf system is just for government to collect taxes. They should have void it but maintain that the minimum OMVs of cars importing into Singapore should be $40k. So our bread and butter cars become BMW 3 series, and lexus might be some of the only japanese carscoming into Singapore.

[Curahee]

Their old formula suxx n flop but it helps many ppl able to own their first car easily.

[Longhorn]

28% cut in COE supply from next month!!! That's HUGE!!!

[Joseph22]

Wait... If my memory serves me right, last time they said the strategy then is to use ERP to curb the car usage. Then, gov can release more COE to fulfill our dream of owning car. Remember the headline "ERP enable more Singaporean to own car"? As a result, COE price crashed and everyone was happy with the low COE price but cross with the additional ERP gentries. So, It is not over-project issue but strategy.

Yes, i still remember that is what LHL say in national day speech in 2008. they want more ppl to own car. So they release more COE and increase ERP. now they are saying the reverse because ppl complain too many car on the road.