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There is no need to worry about Certificate of Entitlement (COE) prices rising significantly despite the move to cut the growth rate of cars and motorcycles to zero, Senior Minister of State for Transport Lam Pin Min told Parliament yesterday.
The Land Transport Authority (LTA) recently announced the zero growth rate, down from the current 0.25 per cent growth, for private passenger cars (Categories A and B) and motorcycles (Category D) from February next year.
Replying to a question from Mr Saktiandi Supaat (Bishan-Toa Payoh GRC), Dr Lam said COE prices will mostly remain untouched as the COE quota is "largely determined by the number of vehicle de-registrations". When fewer are scrapped, the COE supply goes down and vice-versa.
On Mr Saktiandi's question regarding whether Singapore's public transport is ready to handle more passengers, Dr Lam said the Government has invested heavily to beef up bus and train services, and "will continue to do so".
"In the last five years, we have expanded our rail network by almost 30 per cent to 230 km. By 2030, eight in 10 households will be within a 10-minute walk to a train station," he added.
"We have also expanded the fleet size for the existing MRT lines by close to 50 per cent."
With another 80 new bus routes and 1,000 new buses to be added by the end of the year, Dr Lam said: "There will be less need to own a car."
With the 0.25 per cent growth accounting for fewer than 100 COEs a month in the affected categories, industry observers, including Singapore University of Social Sciences transport researcher Park Byung Joon, agreed that the number of vehicles scrapped is more crucial in determining the COE quota.
National University of Singapore transport researcher Lee Der-Horng said: "Once the COE reaches its 10-year life span, most car owners will choose not to renew, therefore ensuring a supply of new COEs."
But he added that if fewer vehicles are scrapped, the zero growth policy would inevitably lead to a drop in the supply of COEs.
Experts believe the impact may be felt around 2020 when fewer cars are expected to be scrapped.
"COE supply is expected to be lower then than in previous years, which will push up COE prices," Dr Lee said.
LTA's latest figures show that 57,721 vehicles were deregistered in 2014, a 39 per cent rise from the 41,501 in 2013. In 2012, only 34,349 were deregistered.
The Land Transport Authority (LTA) recently announced the zero growth rate, down from the current 0.25 per cent growth, for private passenger cars (Categories A and B) and motorcycles (Category D) from February next year.
Replying to a question from Mr Saktiandi Supaat (Bishan-Toa Payoh GRC), Dr Lam said COE prices will mostly remain untouched as the COE quota is "largely determined by the number of vehicle de-registrations". When fewer are scrapped, the COE supply goes down and vice-versa.
On Mr Saktiandi's question regarding whether Singapore's public transport is ready to handle more passengers, Dr Lam said the Government has invested heavily to beef up bus and train services, and "will continue to do so".
"In the last five years, we have expanded our rail network by almost 30 per cent to 230 km. By 2030, eight in 10 households will be within a 10-minute walk to a train station," he added.
"We have also expanded the fleet size for the existing MRT lines by close to 50 per cent."
With another 80 new bus routes and 1,000 new buses to be added by the end of the year, Dr Lam said: "There will be less need to own a car."
With the 0.25 per cent growth accounting for fewer than 100 COEs a month in the affected categories, industry observers, including Singapore University of Social Sciences transport researcher Park Byung Joon, agreed that the number of vehicles scrapped is more crucial in determining the COE quota.
National University of Singapore transport researcher Lee Der-Horng said: "Once the COE reaches its 10-year life span, most car owners will choose not to renew, therefore ensuring a supply of new COEs."
But he added that if fewer vehicles are scrapped, the zero growth policy would inevitably lead to a drop in the supply of COEs.
Experts believe the impact may be felt around 2020 when fewer cars are expected to be scrapped.
"COE supply is expected to be lower then than in previous years, which will push up COE prices," Dr Lee said.
LTA's latest figures show that 57,721 vehicles were deregistered in 2014, a 39 per cent rise from the 41,501 in 2013. In 2012, only 34,349 were deregistered.
