Transportation Planning Casebook/Road Pricing in Singapore

Introduction

          The small city-state of Singapore has uniquely implemented a series of traffic management strategies that curb personal vehicle use in the limited- resource nation. In the 1970s, Singapore began to develop rapidly after gaining independence from Malaysia in 1965. This expansion was quickly met with innovative transportation policies that were established to control traffic in the city. Some of the methods include the Area Licensing Scheme (1975), the Certificate of Entitlement (1990), and the Electronic Road Pricing scheme (1998). The Electronic Road Pricing (ERP) system was implemented on major roads to manage traffic and reduce congestion. The widespread use of the tolling system is nearly unmatched in the world today. The open road tolling platform allows users to pass under the ERP stations without stopping, thereby creating a simple, free-flowing transportation experience. The following are key attributes of the planning, policy, deployment and operation of the ERP system.

Annotated List of Actors

• Land Transport Authority:

          The Singapore Land Transport Authority (LTA) was founded as a statutory board of the Ministry of Transportation in 1995, under the government of Goh Chok Tong, Singapore’s second prime minister. Their stated aim is to make public transit the preferred choice of travel for Singaporeans and visitors, as well as by managing road use through optimizing the road networks and enhancing safety.

• Singaporean Drivers:

          In 2014 the average daily traffic volume in Singapore was 300,400 trips, with approximately 972,000 vehicles in the city-state, of which 55% are private cars. In order to drive in Singapore, one must have a car which is registered through the Certificate of Entitlement (COE) system (a 10-year permit to operate a vehicle on Singapore’s roads). The number of COEs in the country is limited, and are regulated through a public, transparent online lottery.

• Foreign Drivers:

          Driver are required by the Singaporean government to pay a daily VEP (Vehicle Entry Permit) fee of $25.00. Motorists get 10 VEP free days each year to accommodate short-term vacationers and those entering for business.

• Technology developers:

          Mitsubishi Heavy Industries Ltd created the In-Vehicle Units used by the ERP system. This technology was sold to Singapore and a consortium of technology developers including Philips Singapore Pte Ltd, Mitsubishi Heavy Industries Ltd, Miyoshi Electronic Corporation and CSE Global Ltd joined in order to develop the ERP system further. IBM has also been involved with the piloting of ERP II, a GPS based version of the current road pricing scheme.

• Singaporean Government:

          As a form of revenue, the ERP system has been hugely successful. Cost to deploy was estimated around $125 million, with annual revenues of $50 million; translated since its implementation in 2002, this has meant roughly a $40 million per year source of revenue for the Singaporean people - much of it dedicated to improving and maintaining existing roadways and transit infrastructure.

Timeline of Events

• 1975 Area Licensing Scheme (ALS) was used in the Restricted Zone on June 2nd.
• 1984 ALS extended to Cuppage Road and Koek Road on February 13.
• 1985 Government officials study electronic road pricing trial in Hong Kong.
• 1986 ALS extended to Marina Centre on November 19.
• 1989 ALS extended to evening peak hours on June 1.
• 1994 ALS hours stretched all day on January 3.
• 1995 Road Pricing Scheme (RPS) was implemented in three major expressways.
• 1998 Electronic Pricing Scheme (ERP) was activated replacing ALS on April 1st.
• 1999 ERP was extended to Ayer Rajah Expressway (AYE) and arterial roads outside the city.
• 2003 New scheme was launched for foreign-registered cars in September.
• 2005 Evening ERP was introduced for home-bound traffic leaving the city. Separate ERP cordon for Orchard Road area was implemented.
• 2007 Kallang-Paya Lebar Expressway (KPE) partially opened, with one new ERP gantry activated in October. ERP extended to Bukit Timah Expressway (BKE).
• 2008 Government announced a new signboards called the Rates Variable Message System. And Singapore River Line was activated, comprising five new gantries along the Singapore River. Installation of next-generation IUs on new motorcycles commenced. KPE fully opened, with a total of 16 ERP gantries installed. New scheme was introduced to allow ERP charges incurred by motorists to be billed to their credit cards.
• 2009 LTA and IBM run a pilot with a traffic estimation prediction tool (TrEPS).

Maps of Locations

Map of Singapore Expressways overlaid on base map of Singapore's transit system, via http://www.visakanv.com/blog/wp-content/uploads/2013/05/singapore-map-nice.jpg

Two Options for Road Pricing in Singapore

Area License Scheme(ALS)

          The Area License Scheme (ALS) was the predecessor to the Electronic Rate Pricing system. It was instituted beginning in 1975 to address the congestion in the central business district (CBD) of Singapore. The ALS was intended to control four factors - area, time, vehicles and fare. It set a cordon on the area of effect for the scheme (namely, entering into the CBD), and peak hours of congestion into and out of the CBD were measured and rated. Originally, this policy was applied to personal automobiles and taxis, but by 1989, all vehicles except scheduled buses were subject to the fee. The system stabilized by about 1986, with standard infrastructure and operating procedures.           Immediately upon implementation, the ALS began to show signs of success, reducing traffic flow during peak hours by 44.5%, including a 70% reduction into and out of the CBD . Even after a decade of implementation, during which employment levels in the CBD rose by 30% (corresponding to an increase in the number of workers coming into and out of the area), traffic reductions remained constant at 70% of pre-1975 levels.

Electronic Road Pricing (ERP)

          The electronic road pricing scheme uses a pay-as-you-use platform to manage the number of vehicles on the transportation network during peak hours. The idea behind the system is that drivers will consider alternative options to using a personal vehicle when they are subject to pay for the route they use. This incentivizes drivers to commute at off-peak hours, use different modes of transport or to carpool. Each of these alternatives takes vehicles off the road which increases the average travel speed and optimizes the road usage. The system consists of roadside infrastructure, in-vehicle devices and the administrative backend.

Infrastructure

          ERP gantries are placed on all roads that connect the central area of Singapore to the outer reaches of the metropolitan area. Each tolling point has two gantries that are equipped with sensors that capture vehicle information through a unique short-range communication system. The first gantry registers the oncoming vehicle while the second gantry records the rear license plate of the vehicle for additional identification.

ERP gantry at North Bridge Road

‌An in-vehicle unit (IU) is fixed to the lower right corner of the front windshield. Each device is outfitted with a card holder for a Stored Value Smart Card that connects to the driver’s account. The device serves two purposes, to communicate with the ERP sensors and to notify the driver of their account balance. The digital display of the IU is positioned to let drivers view the money that is deducted from their account as they pass under an ERP gantry. The IU communicates with gantry sensors using a dedicated radio frequency line. Currently the IU accepts Contactless NETS CashCard and EZ-Link. If the CashCard is not properly inserted in the IU card holder and the driver passes an ERP station, gantry sensors have no way to read a card and the vehicle will be flagged for a fine. EZ-Link was Singapore's first contactless Stored Value Smart Card System originally developed for public busses and Mass Rapid Transit (MRT) trains in 2002 .

ERP Policy Issues

          The pricing scheme is based on the time of day, the type of vehicle, and the chosen route. The Land Transport Authority conducts quarterly reviews of the traffic speeds used on priced roads to determine ERP rates . These reviews are also conducted during the summer and winter holidays to adjust for vacation traffic. The prices are based on an optimal speed for arterial roads of 30 km/h and 45-65 km/h for expressways. ERP gantries are usually in operation between 7:30-9:30 AM and 5:30-8:00 PM during the weekdays and usually not operated on Saturdays and never on Sundays. During peak hours, charges change every half hour to account for current traffic volumes. The charge for heavy goods vehicles and small busses is 1.5 times the charge for passenger cars/light good vehicles/taxis while large vehicles and big busses are 2 times the charge of passenger vehicles. This deters large vehicles from driving on expressways and prolongs the life of the road. The other factors in setting road prices are the location and type of road used.
‌How does this system work for foreign drivers? Drivers are required by the Singaporean government to pay a daily VEP (Vehicle Entry Permit) fee of $25.00. Motorists get 10 VEP free days each year to accommodate short-term vacationers and those entering for business . In addition, foreigners can buy an Autopass Card which is customized for travelers. The card itself functions as an electronic vehicle entry permit and can only be associated with one vehicle. It is an offence to drive a vehicle in Singapore without an Autopass Card or VEP.

Modifications

          After years of ERP use, it was found that motorists are inclined to speed in ERP zones when they have the opportunity to beat a rate hike. For example, prices change on the half hour so drivers will attempt to pass through the ERP gantry before the price is increased. To control this phenomenon, the LTA developed the Graduated Electronic Pricing scheme which changes ERP prices gradually during the half hour . For the first five minutes of the half hour time slot, the rate will be increased, the next twenty minutes are at the set price and the last five minutes are the lower rate if the next slot is lower. This plan is used for time slots in which a change of $0.70 or more occurs.
‌Singapore has a long term vision of becoming a cashless society. The move in 2006 by the government to collaborate with the LTA on a nationwide “interoperable micropayment platform” . was the first attempt to comply with the Contactless ePurse Application (CEPAS 2.0) standard. The developers of EZ-Link had to replace all current ez-link cards with CEPAS-compliant cards to move forward with the plan. Currently, all ERP stations use the EZ-Link card under the CEPAS Standard. Other areas of Singapore use the CEPAS Standard to use with vending machines, fast food restaurants, and convenience stores and for the transportation of goods. Opportunities to move the CEPAS Standard to Electronic Parking Systems (EPS) and other markets are possible with the widespread use of this specification.

Violations

          If a driver passes through an ERP station without enough funds on their CashCard/EZ-Link, a fine is sent to the owner within two weeks. The driver must pay the fee and a $7 administrative fee for handling the case within two weeks of receiving the notice. The fee is reduced to $5.60 if one of the online payment portals is used . The rules become stricter as the owner neglects to pay the fee. The fee rises to $50 if payment is late and to $1,000 or one month in jail if more than a month passes .

Compare ALS and ERP

	ALS	ERP
Area covered	7 km2 (1.2% of Singapore)	more than 1.2%
Number of entries/charging points	22–33	45
Capital costs(￡)	3.8 million	66 million
Operation costs per year(￡)	5.5 million	5.2 million
Net revenues per year(￡)	26.5 million	19.8 million
Reduction(%) in private cars in the zone	45 (am peak)	15
Increase(%) in average speed in the zone	189	no much change

          ALS charges drivers and gives them permission to enter or drive in an area, whereas with an ERP, drivers are charged when passing through a gantry. As a paper-based system, ALS only had price variation according to vehicle type and time of day. But ERP pricing changes according to vehicle type, time of day and location of gantry. ALS aimed to reduce the traffic volume in restricted areas and induce passenger change from private vehicles to public transport. “ERP aimed to charge road users more accurately for their actual use” . An ERP charge is lower than ALS. “In the first year of implementation, revenues were 33% less than revenues from ALS and RPS combined” mainly resulting from lower charges rather than less traffic.
‌As for the payment, the ALS system required motorists to buy a paper license in advance for placement within the windshield. ERP system required road user to insert a cash card containing enough money. ALS is a manual-based system so the more complicated it becomes the more mistakes that will be made. ERP on the other hand is an automatic system, so it is less likely to have human error be an issue. ALS will not be expanded due to the ever increasing complexity of rules as the city of Singapore grows .

Problems with the ERP system

          The ERP system works by charging drivers a set toll depending on the location and time of day. At peak hours the tolls are highest (approximately $3/station) versus off peak times (approximately $0.40/station).
‌The pay-as-you-use principle enables multiple charges per trip based on the number of ERP stations that are passed along the way. If the payment fails, the gantry sensor would record the car license along with the presumed reason for missed payment. There are two options for the government to handle toll fees. The first way would involve a toll road bill sent to drivers monthly while the second is an automatic transfer during the trip. The former requires an expensive recording system so the government opted for an immediate deduction scheme.

Implementation Results

          Has ERP been effective in addressing congestion? The Land Transport Authority has addressed this common question with the following; “We have been able to keep traffic speeds on the priced roads within their optimal speed range [45 km/h] during peak hours.” The regular reviews and rate adjustments made by system operators creates a consistent driving experience for weekly users. Singapore is well suited for road pricing because it is well equipped with public transit and the security of knowing that companies won’t leave to avoid the tolling. The implementation has been successful because the government takes the program seriously and enforces effectively. Ultimately, the variable road pricing in Singapore has successfully reduced peak hour traffic, the number of singular drivers and has encouraged people to choose alternative routes.

Advancements

• Real-time Traffic Estimation and Prediction System (TrEPS) integrates surveillance systems, digital sensing and communication technologies to predict traffic conditions and provide navigation for road users. The TrEPS predicts the level of congestion an hour in advance by incorporating historical traffic data and current traffic feeds from several sources. The result is a system that can change toll pricing based on actual traffic conditions, relay price information to drivers, and alert drivers to conditions on the road ahead.
• LTA is going to build a comprehensive traffic system which integrates other existing traffic management systems with the ERP system. The existing traffic management systems in Singapore are the Expressway Monitoring Advisory System (EMAS), Green Link Determining (GLIDE) System, Junction Electronic Eyes (J-Eyes), Electronic Regulatory Signs (ERS), and TrafficScan.
• The next iteration of electronic road pricing in Singapore will involve the Global Navigation Satellite System, also known as the Global Positioning System in the United States. Using GPS technology will make distance-based congestion charging possible and eliminate the need for physical gantries. These changes will make the system less expensive and potentially more accurate. Currently drivers that use multiple congested roads are charged nearly the same as a driver that uses a short length of congested road.

Narrative of the Case

          Modern Singapore emerged after gaining its independence following a merger with Malaysia until 1965. As a nation, it is one of the most densely populous in the world, and is one of the few true city-states in the world. It was developed as a British colony beginning in the early 19th century because of its strategic prominence along the Straits of Malacca, the principal water thoroughfare between the Indian and Pacific oceans. Singapore’s growth has been a combination of this strategic location, which has brought lucrative trade through the city for generations. Another reason for growth is due to the strong statist economics of the government of Singapore, which allowed the nation to pursue a policy of rapid economic development and modernization. During the 1990s, it was dubbed one of the four “Asian Tigers” (along with South Korea, Hong Kong and Taiwan) whose growth was remarkable for their transition from developing world status into the developed world. This prosperous growth, beginning in the 1960s, along with the strong central control of the Singaporean government over public policy, has been instrumental in broader planning efforts that have allowed the compact, densely populated city-state to thrive and expand efficiently .
‌Congestion is a deadweight social cost; time spent sitting in traffic literally is money being wasted that could be spent on productive economic activities. Not only is congestion bad for the economy but it is bad for the environment and the morale of drivers. Traffic congestion increases the amount of carbon emitted into the atmosphere from vehicles, increases gasoline and oil consumption, increases local heat island effects, and because of the necessity of providing impervious infrastructure for vehicles, also degrades the hydrological and biological condition of the area. Drivers are also experience psychological hardship when waiting in traffic - everything from boredom to road rage. Furthermore, congestion on transportation networks limits the ability of emergency vehicles to reach people in need.
‌It has been suggested that there are three means of reducing urban traffic volumes: encourage efficient land use so as to necessitate fewer trips between nodes of activity; impose physical and financial restrictions; and create a social mindset whereby public transit is favored, when possible, over the use of private vehicles.
‌To this effect, the Singapore Land Transport Authority (LTA) has addressed road congestion in four ways: (1) building more roads, (2) regulating vehicle use growth, (3) using intelligent transportation systems, and (4) encouraging the use of public transit. The LTA has actively pursued the use of electronic road pricing because of the anticipated benefits, namely, reducing traffic congestion. The fully automated tolling system minimizes human error and uses a central computer structure to monitor the roadside devices, collect traffic condition data, alter prices and issue fee notices. This differs significantly from the previous traffic management strategy (ALS) in that motorists do not need to buy monthly licenses and police officers are not needed for enforcing the rules. With the electronic system, drivers are charged according to how frequently they use congested roads instead of paying a flat fee or tax. Finally, the road usage is optimized significantly as traffic is spread evenly throughout the day which allows drivers to pass through smoothly.
‌On June 2, 1973, Singapore introduced the first road-pricing scheme to the region. The Area Licensing Scheme was implemented in the Restricted Zone (RZ) in order to alleviate the road congestion. Although other economic management policies had been used in the past such as high road annual fees and vehicle registration fees, a different approach was needed. This is the first traffic congestion pricing scheme which was successfully implemented in the world.
‌Approximately 34 overhead gantries were erected on the initial setup (now increased to 77 as of 2014) and were monitored by police officers. The control area is approximately 720 hectares, which has the most severe traffic congestion problems in Singapore. It makes up for 1.2% of the whole area in Singapore. All drivers need to buy a paper license at post office, petrol station, convenient store and sales booth before they start to drive. And the paper license need to be stick to windscreen of cars or handle of motorbikes during operation hours. If drivers don’t follow this rule, they will not be asked to stop but will be recorded. After its implementation, the number of vehicle during 7:30 am to 9:30 pm was significantly reduced.
‌Because of the success in ALS, a new congestion pricing policy called RPS (Road Pricing Scheme) was implemented in three major expressways in 1995. Only urban segments of these three expressways were controlled by this scheme. Similar with ALS, this scheme is still manual operated, driver need to show their license when using their cars during specific part of the day.
‌This simple ALS policy successfully controls the traffic congestion in Singapore for more than 20 years, which sets a great example for many other countries. Although ALS significantly reduces the traffic volume in a lost cost manner, there are still problems with the policy and practice including traffic flow on the major expressways.. “Shoulder peak” charges were needed to control the traffic flow in this condition, but it makes the scheme too complex for users and for the government to enforce. A large number of cars try to reach the control zone just before and after the restricted hours, but this kind of traffic flow may not be out by ‘shoulder peak’ charges. Additionally, drivers have attempted to illegally transfer their license to other drivers. These issues could be averted by using toll-booths however this this may cause traffic delays. A scheme was needed to efficiently solve the problems of ALS. On September 1, 1998, the ERP replaced both ALS and RPS. The objective of ERP in 1998 was (and as of 2004 still is) to maintain an average speed of 45–65 km/h on expressways and 20–30 km/h on major roads, similar to ALS. In addition, the system is aimed at levying charges on a per-pass basis based on congestion.

Similar Systems around the World

London’s “Ring-of-Steel"

          The city of London implemented its own congestion pricing mechanism in February 2003 and as of 2007 it is the largest city to adopt a congestion charge model . The model differs from the Singapore ERP system in that users are charged a daily fee of £11.5 to enter and exit the central business district any number of times from 7:00 AM to 6:00 PM. Payment can be made in advance or on the day of travel. A variety of options exist for drivers to make payments. The Congestion Charge Auto Pay (CCAP) is the best way for drivers to comply with the road pricing scheme as it automatically deducts the fee from an account connected to the registered vehicle. Motorists can also pay a singular charge online, by text message, by phone and by post. The nickname, Ring-of-Steel came from the intricate series of cameras placed around the edge of the central business district of London. These Closed Circuit Televisions (CCTV) take two pictures of each vehicle that enters the zone. The pictures are compared to a list of people that prepaid the daily charge or have an auto pay account. If the computer system cannot identify the license plate, an operator visually inspects the pictures and determines whether the vehicle is clear or should be charged. The system is more technically complex than that of Singapore's however it has seen the same amount of success. Transport for London (TfL) reports that traffic levels have decreased by 10.2% over the last 10 years .

San Diego

          To take control of the notorious Southern California traffic, the San Joaquin Hills Transportation Corridor Agency developed an electronic tolling system that only includes four state routes (73, 133, 241 and 261). Similar to London, cameras on overhead gantries snap pictures of license plates and process the information within the computer network before charging any of the five acceptable accounts that drivers can use for automatic payment. The system was developed based on the volume of cars and highways and the low density transportation environment of San Diego. Contrary to London’s all-who-drive-will-pay scheme, the San Diego system allows drivers that are willing to pay more use an express lane to drive faster than the adjacent traffic. This is a controversial approach because it grants privilege to those that can pay the fee giving it the nickname “Lexus Lanes.”

Discussion Questions

• What capabilities would a smartphone app have that could be developed to make the system easier for users?
• Is ERP an effective way to prevent traffic congestion? If so, why don’t more countries adopt the technology?

Reading Recommendation

• "Urban congestion charging: A comparison between London and Singapore", G Santo, 2005
• "Singapore: The World’s First Digital Congestion Charging System.” Dac & Cities. N.p., 21 Jan. 2014. Web. 3 Oct. 2015. [1].
• "The Long and Winding Road." The Long and Winding Road. N.p., n.d. Web. 03 Oct. 2015. [2].