(Paper Cmd. 3 of 2001)
Sir, first, let me answer the two cuts from Mr Chay Wai Chuen and Mr Yeo Guat Kwang on world class transport. Sir, both Mr Chay and Mr Yeo have asked for an update on what has been achieved in the White Paper so far. Mr Yeo has also asked whether we can speed up the expansion of the rail system and in fact whether we can link up the different housing estates with the rail network and whether we are going to expand the LRT to the other housing estates, just as we have done for Bukit Panjang, Sengkang, and, later on, Punggol. Sir, let me first give an update on what we have achieved in the White Paper so far, as requested by both MPs. Sir, the White Paper sets out four initiatives. These are, namely, improving public transport, developing a comprehensive road network, demand management measures on car and integrated transport and land use planning. Let me go through them briefly. Sir, the land transport system, the cornerstone of that system, is really our public transport system. This is an area that we are focusing a lot of our resources on. Our aim is to have an expanded Rapid Transit System (RTS) such that it is comprehensive in network coverage and it is easily accessible. Members will recall that in the White Paper, we had envisaged a long-term rail network of 160 km, and when we say "long term", we are talking about 30 years. At the time when the White Paper was prepared in 1996, the rail network at that time was 67 km long. Today, I am happy to inform Members that the RTS network is now 92 km long, ie, we are more than halfway to the long-term target. On recent achievements, LTA completed the Bukit Panjang LRT system in November 1999 and the Expo Station in January this year. In the next few years, we will be opening the North-East line, the Sengkang LRT, the Dover MRT Station, the Changi Airport Extension, the Marina line, and the Punggol LRT line. Sir, the completion of all these projects by year 2005 will bring the RTS network to a total of 146 km, ie, we are about 90% to the long-term target by year 2005. Sir, in answer to Mr Yeo Guat Kwang, in effect, we are actually very far ahead of what was envisaged in the White Paper. As to the linkage to the other housing estates and whether we are going to expand the LRT to the other housing estates as well, I would like to inform Members that LTA is actively studying the other rail projects and we will announce the projects as and when they are finalised. In terms of the LRT for the other housing estates, now that we have one operational in Bukit Panjang and we are going to have the second operational very soon next year in Sengkang, what LRT would like to do is to step back and observe how well these two systems are performing and how do they compare versus the bus-based system for housing estates. The system is very expensive and it is prudent for us to make a review before deciding whether to further expand the system to the other housing estates in the future. Another good news for Members is that, over the long term, instead of the rail network of 160 km, we envisage that the long-term network will now stretch 540 km. So, in effect, we are going to make the rail network the basic infrastructure for public transport. In terms of developing a comprehensive road network, again, LTA has managed to proceed ahead of what was envisaged in the White Paper. By the end of last year, LTA had already added 415-lane-km of roads. This is much higher than the 225-lane-km targetted by the end of 2001, as set out in the White Paper. Sir, in terms of demand management measures, as you know, we have implemented ERP, as proposed in the White Paper. It is working very well and it is able to control congestion on the major roads. And because ERP is working very well, we do not need to expand the ERP system beyond the current gantries. However, if the congestion does worsen as the vehicle population grows, then ERP may have to be expanded to cover other areas and other parts of Singapore as well. Sir, the vehicle quota system (VQS) has indeed been helpful in keeping the car population down. Just now two MPs raised points about the VQS. I will reply to that later on. 1.00 pm Sir, the last pillar of the White Paper was the integrated transport and land use planning. Here, LTA is working very closely with URA and HDB on integrating land use in terms of town and transport planning. This will enable us to optimise the use of our land and to maximise the benefits of the integrated land transport system to consumers and to residents. As an example of the collaboration with URA and HDB, the hon. Member for Sengkang would realise that we are seeing there the integration, in terms of the use of the MRT and LRT stations together with the commercial operations, which will make the town a lot more attractive as well. The other example of the building-cum-station integrated development is the Dhoby Ghaut MRT station, which should be open very shortly. Sir, in conclusion, we can say that LTA has, indeed, made good progress in the five years since the White Paper was released, and we are on track to developing a world-class land transport system. Mr Yeo Guat Kwang has asked about the coordination amongst LTA and other agencies. I understand that point would be brought up again later, and we will answer that together. Sir, we have four Members talking on COE. Let me reply to them one at a time. First, Mr Chay asked about open COE: why the delay, when will it be launched, and whether there will be sufficient trials because the public will not tolerate any glitches to the system. He has also asked for information on the new COEs for the next quota year (QY). I will go through his points. Why the delay to the open COE system? Sir, the online COE bidding system that is being worked on at the present moment is a very complex system. As such, the contractor has had to spend a little bit more time than originally envisaged to make sure that the different elements of the system are well designed, and the software is written up properly. Sir, the contractor has, in fact, completed the development of the various components of the system. What is happening now is that LTA and the contractor are carrying out a series of very comprehensive tests on the system. This is, as Mr Chay had pointed out, to ensure that the system is totally debugged before we launch it to the public. We expect to complete the tests by the second quarter of this year. If everything goes fine with the tests, we should be able to see the open COE system being launched around June or July this year. Once the system is launched, we will introduce it on a trial basis and, during the trial, as Mr Chay had pointed out, we are going to alternate between the open COE and the present closed COE bidding system. The bidding will be done every fortnightly. What we will do is we would then divide that month's COE into two portions: one half for the open COE bidding and, a fortnight later, the other half, for the closed COE bidding system. As the two bidding systems will have different characteristics, it is quite possible that they will also have quite different outcomes. We will evaluate the outcomes from the two bidding systems during the trial period, and correct any shortcomings that may be observed with the new open bidding system. LTA will discontinue the closed bidding system once the open bidding system has stabilised, and the public is comfortable and familiar with the new system. We expect the trial period to last between six to twelve months. In terms of the new COE supply for the new quota year, Sir, Members will be happy to know that the Government will continue to allow for a 3% growth rate in our vehicle population for the new quota year. Based on LTA's computations, the COE quota for QY2001 will be 86,831. This is about 20% lower than for QY2000, but it is much higher than the quota for the previous years. As an example, the COE quota for QY2001 is 27% higher than the QY1999 quota. LTA will be releasing more details of the annual quota shortly. Mr Gerard Ee has proposed that we come up with a single pool of COEs, and he has given two options, if we have a single pool. One, let all the bidders pay the same price, or, two, let them bid but use a multiplier to differentiate between the different engine sizes. Sir, in fact, this issue of whether to have a single pool of COEs is not a new one. The GPC had very carefully considered this question when reviewing the Vehicle Quota System in 1999. It is fair to state that, from the public transport point of view, having one category of COEs does make for efficient allocation. Basically, what we are interested in is: how many vehicles are we going to have on the road, and whether the vehicle has a bigger engine or a smaller engine. In terms of road use, it does not really make much difference. In terms of efficiency, what Mr Gerard Ee has mentioned is correct. However, the feedback from the public was that some segmentation of the COE quota system would be useful for social equity reasons because of the concern that if we do not have separate categories, the potential buyers of small cars may be squeezed out by the buyers of the bigger and more expensive cars. As such, the Committee recommended that, as a first step, we proceed to only merge the car COE categories from four to two, which is what we have today. In terms of whether we should have a single pool, but still differentiate by having a multiplier, the complexity that is going to be introduced is not going to make anybody any happier. How do we allocate the multiplier? Whatever figure we pluck out from the air is not going to make anybody happy at all. So, I think the present system is working well. We only have the two categories for vehicles and, therefore, it is working. I think it is better that we stick to it. Let us have the open COE bidding first, see how that goes and, if the indications are that it makes sense later on to have a single category, I am sure the Government will be very happy to consider that. On his point that having the different categories, in effect, fit the relative size of each sector, based on historical figures, I think Mr Ee need not worry about that because we have thought about it. That is why we have the open COE category: so that if there are more buyers bidding for small cars, for example, instead of all going for the small car category and bidding up the COE prices, they can still go into the open COE market and bid for the open COEs. So there is a balancing-tank effect there. Mr Noris Ong lamented about the high cost of car ownership in Singapore. Sir, I think it is useful for us to take a step back and see whether we should be comparing ourselves with countries which do not have space constraints. In Singapore, the reason why we need to have a very strong control on car population is that we are land-short. In fact, we should be comparing ourselves with the major cities of the world, like New York. Very few people who live and work in New York expect to own a car, and Singapore really is a major city. We do not have the open spaces where we can have a half-an-acre home and park 10 cars in the driveway. Unfortunately, in Singapore, there is no alternative to having controls over the car population because we have very limited land for roads and we have very limited land for parking cars. In fact, roads today already take up 12% of our total land space, and this is equivalent to the total land area used for residential housing. So we are already using whatever land we have for roads, and it is going to be very difficult to build a lot more roads. It is also going to be very difficult to build much more car parks in existing housing estates. If we look at the older housing estates like Toa Payoh, Queenstown, etc, the parking capacity is already very, very tight. So we must control both car ownership as well as car usage. In fact, I think Mr Noris Ong made an interesting point. He is asking us to reinstate the category for small cars. This is in contrast to what Mr Gerard Ee has asked for, which is to merge everything into one category. This shows that, really, the issue of car ownership and usage is a very complex one, and we will have to try to balance all interests as much as possible. Sir, he has also asked that we make it possible for car owners who want to revalidate their COEs to do it on a five-year basis rather than on a 10-year basis. This issue was again discussed quite extensively previously, and the reason for having that 10-year COE is, again, an equity reason, because the new car buyers are buying COEs on a 10-year basis and, therefore, the lifetime of each COE is really for a 10-year period. And if a car owner feels that his car has been very well maintained and can last another 10 years, he is free to revalidate for a full 10 years. In fact, he can do it indefinitely, as long as the car is well maintained. But we do recognise that there will be other owners who do not feel that the car can last 10 years and therefore, we have made it possible for them to have a final revalidation of the COE for a 5-year period, ie, this 5-year period is not meant to be an instalment payment scheme. We should leave the instalment payment scheme to the financing agencies. 1.15 pm Mr Gerard Ee also touched on the point of package deals for COEs. He himself recognises that this package-deal system is actually a very convenient one and, in fact, it is one that the vast majority of car buyers use, and for all the reasons that Mr Ee has mentioned. The question is: should we now step in and disallow the packaging of the car prices with the price of a COE? This would be unnecessarily intervening in the free market mechanism. As Mr Ee has in fact recognised, the package pricing of the car with COE, in effect, results in a discount being given by the dealers. He used the term "subsidise". I would rather not use the term "subsidise" because I do not think car dealers are in the business of subsidising car buyers. But they do give a discount to make it more attractive for the car buyers to buy the car from them with the COE included. And I think that is to the benefit of the car buyer but there is a hidden cost to it. And again, that is something which Mr Ee has alluded to, and the hidden cost is that the buyer has no control over what the car dealer is going to bid for the COE, and over the timing of the delivery of the car that he has entered into an agreement to buy. So there is a hidden cost. Therefore, in a way, the buyer who buys his own COE is, in effect, forgoing the discount but, in return, he is getting the assured delivery of the car he wants, at the time he wants. Sir, I think what we need to do is to encourage the car market to be more competitive so that car buyers can shop around and know what they are actually buying. To this end, LTA has done two things. One is that it has made it easier for individuals, companies and car dealers to parallel import the cars that they want. I have asked LTA to review and further streamline the import procedures to further facilitate parallel car imports. Of course, the cars that are being parallel imported must still meet our safety and environmental standards and regulations. The second part that LTA is doing, and would be doing more, is to post every month on its website full details of the car prices, and this would include the OMV, customs duty, ARF and COE payable, ie, car buyers can then go into the website and know exactly what he has paid for versus what it actually costs the car dealer. They can then make an informed choice as to what to buy and whether to buy with or without COE.