$12.6m more to help SMEs improve business practices

$12.6m more to help SMEs improve business practices
By Lynn Lee
March 8, 2008 ST

An Enterprise Development Centre - the fifth in Singapore - at the chamber's Stanley Street headquarters was officially opened by Prime Minister Lee Hsien Loong. -- ST PHOTO: ZAOBAO

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FROM a shop in Changi Village tailoring suits for British military officers, Ms Kavita Thulasidas' family business has bloomed into a high-end East-meets-West clothing store for fashionistas.
Eight months ago, the managing director of Stylemart in Selegie Road launched her first overseas venture - a spa in Bangalore, India.

Ms Thulasidas, 33, says the Singapore Indian Chamber of Commerce and Industry's talks on doing business in India, and its network of lawyers and consultants came in useful when she was putting together her plan.

And it looks like the chamber will be able to do more for companies like Stylemart, as it now has a new facility to provide business and consultancy advice to small and medium enterprises(SMEs).

On Saturday, an Enterprise Development Centre - the fifth in Singapore - at the chamber's Stanley Street headquarters was officially opened by Prime Minister Lee Hsien Loong.

Mr Lee also announced a $12.6 million injection of funds by the Government, to fund the five centres' work over the next three years. The five are run by two trade associations and three chambers of commerce.

To date, the centres have helped around 14,000 of the 145,000 SMEs to improve business practices, in areas like human resources, finance and technological devlopment.

In his speech, Mr Lee also drew attention to how the SICCI could help both Singapore and Indian firms leverage on the countries' free-trade agreement .

Cost of staging a bomb attack

Cost of staging a bomb attack: as little as US$10,000, says terrorism expert

By Chong Chee Kin (The Straits Times)

BOMBING attacks in the Southeast Asia cost terrorists as little as US$10,000 (S$14,126) to stage, but the damage to properties and businesses can easily spiral into the millions.
The amount is spare change compared to the US$2 million to US$3 million that terrorist groups raise in the region every month.

The series of attacks in Bali in 2002 and 2005, which included the bombings of the JW Marriot Hotel and the Australian Embassy in Jakarta in 2003 and 2004, each cost only between US$10,000 and US$40,000 to stage.

Terrorism expert Rohan Gunaratna gave this regional perspective on terrorism when he spoke at a conference organised by British commercial insurer Lloyd's on Thursday for insurers and business leaders around the world.

Citing a report by Lloyd's and the International Institute for Strategic Studies, Lloyd's chief executive, Richard Ward, said the main threat to businesses operating in Southeast Asia were their proximity to Western targets, such as embassies and hotels and possible attacks on the companies' transport routes and supply chains.

'If a company's supply chain is attacked or shut down, it simply can not survive. While many businesses are aware of possible attacks on their premises and take precautions to avoid this, too few take into account their operating systems and transport routes,' he noted.

Crucial to managing the risks is the need for businesses to tap on the expertise of academics and non-governmental organisations, he said.

Intelligence agencies should also build up their 'human intelligence capacities' - getting information through a network of people rather than surveillance equipment.

Citing the example of how an Al-Qaeda member had his hand cut off for using a mobile phone at his camp, Dr Gunaratna said terrorists know that they can be tracked through technological means.

'It is getting increasingly difficult to track them because they know they can be traced easily when they use hi-tech equipment,' he said.

Goodbye Comrade Fidel

Fidel Castro leaves Cuba stage to brother Raul

HAVANA - RETIRED Cuban leader Fidel Castro will play the role of elder statesman after nearly 50 years of absolute rule of Cuba, leaving the stage clear for his brother Raul Castro to assert himself.
Fidel Castro, who stepped down on Tuesday as president and commander-in-chief of Cuba's armed forces, stays on as first secretary of the ruling Communist Party and will continue to hold forth on domestic and world affairs in articles.

'We will continue waiting for the 'Reflections of Comrade Fidel', which will be a powerful arsenal of ideas and guidance,' the party newspaper Granma said on Wednesday.

Mr Castro, 81 and in poor health, will now be known as 'comrade Fidel' instead of 'El Comandante", as he has long been called, an indication that times are changing half a century after the bearded revolutionary seized power in 1959.

His retirement appeared to be the final stage of a carefully laid transition to Raul Castro, dashing the hopes of their enemies that Fidel Castro's end would send thousands of Cubans onto the streets to demand democratic reforms.

'Raul is the man of the hour. He is firmly in charge. Fidel is off-stage. The Fidel era is over,' said Brian Latell, a former CIA analyst and author of a book on Cuba's next leader called 'After Fidel'.

Raul Castro has provisionally held power since his brother underwent emergency intestinal surgery in July 2006. He is expected to be chosen as president when the rubber-stamp National Assembly meets on Sunday.

Cuba faces big problems from a weak economy to decrepit transportation and a frustrated younger generation, Mr Latell said in Miami, adding that Raul Castro would address them in a diligent way.

'He's a problem solver. Fidel couldn't admit to problems in the first place. There's no doubt that Raul is running Cuba,' Mr Latell said.

How much of a reformer?
It is unclear how much of a reformer Raul Castro will be.

He has been his brother's closest advisor since they were guerrilla fighters in the Sierra Maestra mountains and had a reputation as a hardliner who could be brutal with his enemies.

But he is also seen as a good manager and delegator.

Analysts say Fidel Castro's continued presence behind the scenes will ensure a certain caution as his brother considers economic reforms.

University student and Communist Youth leaders said on Wednesday they would continue studying and applying Fidel Castro's ideas as 'the leader of the Revolution' if not the head of state anymore.

'We young Cubans, above all, believe in Fidel and trust his decision. Even though it is painful to accept, it could be best for the country,' Patricia Flechilla, head of the University Students Federation, said on a state television newscast.

But Raul Castro should be able to rule without too much interference, said Uva de Aragon of Florida International University's Cuban Research Institute.

'Fidel sees himself as playing the role of the great statesman, the grandfather, comforting the people. There was a hint of nostalgia in his resignation letter,' she said.

'Raul has a space to make some changes ... not that I expect significant change right away.' The National Assembly meeting will be important to see what roles are given to vice-president Carlos Lage, seen as a pragmatist, and to reformers, the experts said.

Even if Raul Castro does not take on both of the posts vacated by his brother, he will wield significant power.

'You have to see this as part of a process that started a long time ago,' Ms de Aragon said.

US President George W. Bush, who has tightened a decades-old US economic embargo against Mr Castro's government, said his retirement should begin a democratic transition.

The reaction from Cubans has been subdued. Some were saddened by Mr Castro's retirement and others hoped it would herald economic changes, but no one was predicting major changes to Cuba's one-party rule.

'I wish it were so, but I don't believe it,' said Pedro, a 74-year-old retiree who was lining up outside a bank at dawn on Wednesday to collect a monthly pension of 164 pesos (S$10).

'This is not enough to live on. A pound of pork costs 40 pesos,' said Pedro, who supplements his pension working as a night watchman. 'A man my age should not have to work.' -- REUTERS

Help grads who do as well as foreign talent

ST Forum (Feb 20, 2008)

Help grads who do as well as foreign talent

RECENTLY, I befriended a group of scholars from China studying at my alma mater, Nanyang Technological University (NTU). They were in their late teens and were attending foundation courses in English and maths before starting their undergraduate studies. In their five-year sojourn at NTU, they will be given free lodging and a monthly allowance of $500 each. Needless to say, they do not have to pay for their tuition fees. When they graduate, they must work in Singapore for six years as part of their 'payback'' bond.
A highly conservative calculation of their five-year tenure at NTU suggests that each will cost the Government or NTU some $70,000. That is, $30,000 for their five-year tuition fees, including the charges for their foundation courses, and some $40,000 for hostel accommodation and their monthly stipends. I graduated from NTU five years ago, with a good honours degree.

I was in the top 15 per cent of my cohort - and performed better than some of these scholars. While studying at NTU, I had to work as a pizza delivery boy to earn my allowance. Upon graduation, I had to start paying off a $24,000-student loan.

Why are Singaporeans like me not treated as considerately as such scholars? My study loan took five years to pay off after I started working. The China scholars receive financial support, a free education and start their working lives debt free. Their six-year bond is seen as a contribution to Singapore.

Am I not contributing as much, if not more? Non-scholar Singaporeans are not treated in quite the same way as foreign talent, regardless of how well we perform. The disparity is disheartening.

Don't Singaporeans like me who have done well deserve some relief? True, local scholarships are available. But not every Singaporean who graduated well, gets one.

Can the NTU or the Education Ministry tell me why graduates like myself don't deserve some relief or reward for doing as well as, or better than, some of the foreign talent?


Zhou Zhiqiang

Feb 1, 2008 - Foreign Talent

Feb 1, 2008
S'poreans and foreigners gain from job boom
By Goh Chin Lian and Keith Lin
THE economy grew so fast last year it created a record-busting 236,600 jobs, with six in 10 of them going to foreigners as there were not enough locals to fill all the openings.
That is up from the 2006 figure of five in 10 jobs going to foreigners.

The Manpower Ministry said in its statement yesterday that both Singaporeans and foreigners gained from the job boom.

The number of new jobs that went to locals rose last year to 92,100, up from 90,900 in 2006.

But foreign employment soared to 144,500 last year.

The services sector was the main engine of growth, adding 144,100 jobs. Most of these were in the financial and professional services. The construction sector grew by 40,900 jobs, double that of the previous year, and manufacturing by 49,400.

Record 236,600 jobs created last year


Six in 10 went to foreigners
... more
At the same time, the overall unemployment rate fell to a 10-year low of 2.1 per cent last year. On average, 56,900 Singaporeans and permanent residents were unemployed last year, down from 67,600 in 2006.

Retrenchment dipped to a 14-year low, with 7,200 workers laid off, the bulk from manufacturing. The ministry said that reflected the ongoing restructuring in the electronics industry.

National University of Singapore labour economist Park Cheolsung said it was unsurprising that in such a buoyant labour market, a larger share of the new jobs went to foreigners.

'The labour market situation is so rosy that most Singaporeans should have jobs if they want to. For many companies, turning to foreigners is the only way they can find workers right now.'

The ministry, which has relaxed foreign worker quotas and hiring requirements in recent years, said the injection of foreigners enabled the economy to 'grow beyond the limits of Singapore's indigenous workforce'.

Singapore registered GDP growth of 7.5 per cent last year.

Foreigners are key to the boom being enjoyed by the construction and marine sectors, where they are taking up posts that Singaporeans find unattractive.

In the shipping industry, workers from Bangladesh, India, China and Myanmar are employed as tradesmen - who do work such as welding - as well as technicians and assistant engineers.

Shipbuilding and Marine Engineering Employees' Union president Wong Weng Ong said: 'A welder gets $400 to $500 a month. Most Singaporeans won't work for you for less than $1,000.'

An increasing number of foreigners are also working in the services sector, doing jobs that range from waiting on tables to high-end ones in finance, logistics and information technology.

As of December last year, one in three workers here - or 900,800 - were foreigners.

But job growth could moderate this year, economists say. Dr Chua Hak Bin of Citigroup said: 'Already, the global credit crunch has resulted in some retrenchment in certain sectors, such as financial services.'

chinlian@sph.com.sg

Jan 31, 2008 - Keeping Traffic Flowing

Jan 31, 2008
Keeping traffic flowing smoothly
Visiting the Kallang-Paya Lebar Expressway yesterday, Transport Minister Raymond Lim outlined the Government's plan to tackle increasing congestion on Singapore roads.


INCREASING road capacity and deploying traffic engineering measures will not in themselves guarantee smooth-flowing roads. Additional lanes and new roads attract more traffic and congestion soon returns. As a Time Magazine writer put it: 'Traffic is like water; it oozes across all available surface.'
The insatiable appetite for more cars has led to an uphill battle against gridlock in many cities. In fast-growing economies like China, the car population grows at more than 20 per cent a year and peak-hour traffic in mega cities such as Beijing and Shanghai crawls at 5km an hour.

In the US, motorists spend more than 4.2 billion hours stuck in jams, enough time to fill 65 million iPod Nanos with music, and used up enough extra fuel to fill 58 supertankers. The 'congestion invoice' in the US stands at some $78 billion each year while congestion costs are estimated to be 1 per cent of GDP in European countries such as Britain and France.

Singaporeans, likewise, desire to own cars and our policies, in particular the use of Electronic Road Pricing (ERP) to manage traffic, have made it possible for many Singaporeans to do so. And so the vehicle population has grown steadily to the 850,000 vehicles today. With rising affluence, not only are more Singaporeans owning cars, they are also using them more intensively. While the number of cars increased by 10 per cent between 1997 and 2004, the number of car trips increased by 23 per cent, more than double.

The effects are telling. Congestion levels have increased by about 25 per cent since 1999, with more roads congested during the peak hours. A December 2007 Singapore Business Review article entitled Gridlocked Nation warned that 'if Singapore's growing traffic problems (were) not solved soon, the surging economy could feel the crunch'.

Against our ever growing appetite for car use, we are faced with the immutable realities of Singapore's situation: a compact city state with 12 per cent of its land already used up for roads. While we will continue to build roads like the North-South Expressway, going ahead, the pace of road expansion will have to slow down, from 1 per cent a year over the last 15 years, to 0.5 per cent a year over the next 15 years.

KEY TRADE-OFF

The only way to move large numbers of people efficiently in our densely populated city is by public transport...The more cars Singaporeans own, the more extensive ERP coverage and the higher the charges would have to be. This is the key trade-off we have to make, to maintain smooth-flowing roads.

There are three inescapable conclusions from these observations. First, as more and more Singaporeans own cars, it is clearly not possible for all of them to drive their cars to and from work every day. The only way to move large numbers of people efficiently in our densely populated city is by public transport. It is therefore critical that we make public transport much more attractive to the vast majority of Singaporeans, including those who have access to cars.

Second, the trade-offs we are faced with have become much sharper. The more cars Singaporeans own, the more extensive ERP coverage and the higher the charges would have to be. This is the key trade-off we have to make, to maintain smooth-flowing roads.

Third, even with more extensive ERP, the current vehicle growth rate of 3 per cent is not sustainable, given the already large vehicle population and the slowdown in road growth. We have to lower vehicle growth.

These are not easy issues but we have to make these difficult decisions and act decisively to manage car growth and usage to ensure that Singaporeans will continue to enjoy a quality living environment.

Public transport

FIRST and foremost, we are taking major steps to make public transport a choice mode of travel. We will plan our bus and rail network as an integrated system from the commuters' perspective, with more frequent services and seamless transfers. We will also spend billions of dollars to double our rail network, enabling many more people to benefit from fast and reliable MRT connections. These measures will transform our bus and rail services, reduce journey times and increase comfort and convenience for commuters. Beyond these, we will make immediate improvements to public transport - both bus and rail - so that people will have a good alternative to cars.

Improving bus services

LONG waiting times, long journey times and overcrowding are the three most common complaints amongst bus commuters. These are the same reasons that discourage more people from taking public transport today.

The bus priority measures such as bus lanes which we are putting in by June 2008 will help reduce waiting and journey times. These measures will help improve average bus speeds to 20kmh-25kmh, up from today's 16kmh for feeder buses and 19kmh for trunk buses. In addition, we will:


Increase frequencies of basic bus services, including feeder services.
To shorten bus journey and waiting times, and reduce crowding, we will enhance the frequency of basic bus services. In particular, we will put priority on corridors affected by impending ERP expansion, where the bus operators will raise the peak period frequency of all basic bus services from 15 minutes to 12 minutes by June 2008 and 10 minutes by August 2009.

Many commuters use feeder bus services to connect to MRT stations and bus interchanges. To reduce their waiting time, we will increase the frequency of feeder services. Over and above the minimum frequencies which the Public Transport Council (PTC) specifies for all bus services, the PTC will also be spelling out a separate and higher Quality of Service (QoS) standard for peak-hour feeder bus services. The PTC will announce changes after consultation with the public transport operators.

The bus operators will have to procure additional buses to run the trunk and feeder bus services at higher frequencies. As this will take time, LTA will, in the interim, extend the statutory lifespan of existing buses to expedite implementation.


Allow basic bus services to duplicate parts of the rail network.
Today, trunk buses are not allowed to run routes that are parallel to rail lines. This avoids wasteful duplication of resources, which would increase the overall cost of our public transport system. However, LTA has reviewed and will relax this rule for the mature rail lines, namely the North-South and East-West lines, where ridership is high and the scope for expanding rail capacity quickly is limited.

From June 2008, we will allow new bus services to ply the North-South and East-West lines where there is persistent heavy passenger loading during peak hours. For example, it will now be possible to have a more direct bus that runs parallel to the North-South Line, from Ang Mo Kio to Orchard Road, compared to existing services which have more indirect routes. This would give commuters an attractive alternative to trains.


Expand premium bus services to provide more choices.
We will also expand premium bus services which provide more comfortable and direct journeys. We currently have 42 services. We will work with the bus operators to increase the number to at least 72 by June 2008, putting priority on routes affected by ERP expansion. For example, premium bus services will provide direct connections from residential areas such as Katong, Holland, Bukit Timah, Choa Chu Kang, Sengkang, Tampines and Yio Chu Kang to the Shenton Way, Robinson Road, Suntec City and Orchard Road areas. The operators will also provide return trips in the evening on high demand services.

Increasing train capacity

EVEN as we improve bus services, we will also increase the frequency and capacity of our trains, for a more comfortable ride.

I mentioned in an earlier speech that an immediate improvement is the addition of 93 train trips a week during the morning and evening peak periods from February. For commuters, this will mean less crowded trains and a cut in waiting time by about 10 per cent to 15 per cent during peak hours.

Further, as part of LTA's effort in revising the rail Operating Performance Standards, more frequent services will be required during peak-time periods. For example, commuters should only have to wait for about two to three minutes during the morning peak-of-peaks when commuter volume is highest. During the lunch period, the frequency would be improved to about five to six minutes, down from the current seven minutes. LTA will work with the rail operators to bring about these improvements.

Ensuring ERP remains effective

BESIDES vastly improving public transport, we will also need to enhance our ERP system. As with putting in more roads and traffic engineering measures, simply improving public transport on its own will not solve the congestion problem. Of all the different measures to deal with congestion, ERP is the only one that addresses the problem directly by requiring individuals to take into account the costs of congestion caused by their driving to others.

Many other cities are coming to the same conclusion that there is no choice but to introduce congestion charging on heavily used roads. London, Stockholm and Milan have done so and New York and Amsterdam are considering it. Without ERP, Singaporeans would be spending many hours in traffic snarls, just like people in Tokyo, Los Angeles and many other US cities, who pay for congestion, not with their wallets, but with the time they have lost, stuck in traffic gridlock.

However, it is a growing challenge to keep our roads smooth-flowing. On the one hand, road growth is slowing; on the other hand, we are packing more and more cars onto our roads. In the last 10 years, the car population grew by almost 40 per cent, from 370,000 in 1997 to 515,000 today.

Coupled with this is the fact that our cars are among the most intensively used in the world, averaging 21,000 km a year, compared to 9,100km in London, 13,900km in Melbourne and 19,800km in Chicago. Not surprisingly, all these have resulted in the crowded roads and frequent peak-hour congestion that we see today.

Our ERP system has served us well, but it is coming under strain. We often hear feedback that ERP has not helped to ease congestion on the highest-demand roads like the CTE beyond a temporary respite; that ERP rate increases have little impact on travel behaviour; and that even though people pay ERP, they still face congestion on priced roads. There is some truth in this. The reason is that rising affluence has led to a greater propensity to drive which in turn has caused a dramatic rise in traffic volumes; so much so that the scale and intensity of traffic congestion today are far different from what they were a decade ago.

Increasingly, given the more pervasive congestion today, the emphasis must be on encouraging motorists to shift to public transport, rather than drive on alternative roads to their destinations. This is why the Government is spending billions of dollars to improve our public transport system to make it a viable alternative to the car.

Further, our ERP system has essentially remained unchanged since 1998. Hence, it is critical that we review the ERP system and enhance it to better address current and future traffic conditions. As a Thomson resident told me when I visited the area recently, people are willing to pay ERP charges but they must see the benefit from it. In other words, the ERP system must be made more effective.

LTA has studied the matter carefully and assessed that, to manage congestion effectively, it is necessary to make the following changes:


Refine the method of measuring traffic speeds: The optimal traffic speed thresholds of 45kmh on our expressways and 20kmh for arterial roads have been set to ensure smooth-flowing traffic. Yet, very often, motorists who pay ERP charges still find themselves caught in slow traffic, and even experiencing 'stop-start' conditions, despite fine weather and with no accident in sight.
LTA did a study which found the 45kmh and 20kmh threshold speeds which were set 10 years ago are today close to the point where traffic flow can deteriorate very rapidly to what traffic engineers call the 'unstable zone', where 'stop-start' traffic conditions become common. When this happens, all it takes is a minor disturbance in the traffic flow and the traffic speeds can drop quite sharply. This is undesirable and we need to create a buffer to ensure better traffic conditions.

After careful review, LTA has decided to address this problem by adopting a more representative method of measuring actual traffic conditions for ERP rate reviews, with speeds determined using the 85th percentile speed measurement method. The 85th percentile speed measurement method is also an international traffic engineering practice for assessing traffic conditions.

The 85th percentile speed measurement method will result in better driving conditions for more motorists than the current methodology of using the average or mean speed, as it ensures that 85 per cent of motorists will experience speeds above the threshold. The nature of averaging is such that lower speed readings would be evened out by higher speed readings. Hence, even if the average speed on an ERP- priced road is recorded as being above the threshold, the actual speeds may well be lower than the threshold for a significant part of the time. For example, even though the average travelling speed on the PIE from 7.30 to 8am was above 45 kmh in early January this year, up to 38 per cent of the motorists were actually travelling at speeds below 45kmh.

On Thomson Road in October 2007, about half of the motorists travelled at speeds below 20kmh between 8.30-9am, even though the average speed was 20kmh. Thus, using average speeds aggravates the risk of traffic falling into the unstable zone. This also explains why there is at times a disconnect between what LTA says and motorists' actual driving experience. LTA is correct that the average speed is above the speed thresholds but a good number of motorists are not actually experiencing such speeds.

Hence, LTA will no longer use average travelling speeds to determine ERP rate changes. Instead, LTA will use the speed taken at the 85th percentile level. With this change, at least 85 per cent of motorists will be assured of smooth travel on ERP-priced roads.


Update ERP rate structure: Traffic volumes have increased substantially in the last few years. This has resulted in the need to make more frequent rate changes on ERP-priced roads and expressways, from nine times in 2006 to 25 times in 2007, based on the same number of gantries. Instead of resorting to so many small adjustments, it would be more effective to make larger rate increments. Indeed, many people have said the 50-cent rate increment has only a temporary impact on driving behaviour as it is not significant enough to cause people to change their travel behaviour.
Therefore, for ERP charges to remain effective in influencing motorists' behaviour, LTA will raise the incremental ERP charge from $0.50 to $1. In addition, the ERP base charge, which is the starting charge for a new ERP gantry point, will be increased from the current $1 to $2. These changes will improve the effectiveness of the ERP system, so that each time ERP rates are adjusted, motorists who still choose to drive on these roads would see a visible improvement in traffic flows.


Manage congestion in city area: City traffic has been building up. Compared to five years ago, speeds on major roads in the CBD have fallen by more than 25 per cent. For example, five years ago, a motorist crossing the city from Bugis to Chinatown in the evening enjoyed travelling speeds of 25kmh. Today, the speeds have fallen by almost 30 per cent to 18 kmh. At major cross junctions between North Bridge Road and Bras Basah Road, as well as South Bridge Road and Cross Street, the build-up of traffic has resulted in motorists having to wait for three or more traffic light changes before they are able to cross the junctions. We cannot let conditions deteriorate further.
LTA has carefully studied the traffic situation and will introduce additional ERP gantries in the city area in July 2008 to manage traffic more effectively. These gantries will run roughly along the Singapore River from Clemenceau Avenue to Fullerton Road. Their purpose is to reduce the through traffic, which currently makes up about 38 per cent of the traffic, in this very busy area.

Phasing in changes

THE revised speed measurement criteria and the new rates will be introduced from July 2008, only after the public transport improvements have been rolled out by June. These public transport measures will increase rail and bus passenger capacity by 15,000 trips and 6,800 trips, respectively, during the morning peak hours. These are more than sufficient to cater to the 6,000 passenger car trips that LTA estimates may be affected by these ERP changes during that period.

LTA will phase in the ERP changes, starting with the CBD and Orchard cordons in July as the city area is a key priority. It will then extend the new criteria and rates to other roads progressively, with six new gantries put up to deal with peak-hour congestion in November. This is to give time for people to adjust their travel plans and allow for the impact of changes in the city area to work its way through the rest of the road network. Hence, if as a result of the new ERP rates in the city area, fewer motorists drive on the arterial roads and expressways leading to the city, we may not need to adjust the ERP rates even with the new criteria. LTA will give more details of the new ERP gantries later.

Lower vehicle ownership taxes

WITH all these changes to the ERP system, the expected increase in ERP revenue will be about $70 million a year. In line with our policy to shift progressively towards taxing on the basis of vehicle usage rather than ownership, the Government will reduce road tax by 15 per cent for all vehicles, including taxis. I urge taxi operators to pass on the savings to taxi drivers.

This permanent road tax reduction will cost the Government about $110 million annually. It underlines the point that the higher ERP charge is to address congestion and is not a revenue- raising measure. If motorists were to drive less, the Government would be happy to collect less ERP revenue.

In addition, to lower the upfront cost of car ownership, we will also reduce the Additional Registration Fee (ARF) for cars, lowering the rates from 110 per cent of Open Market Value (OMV) to 100 per cent of OMV with effect from March 2008. The Government will collect about $200 million less annually.

Lower vehicle growth rate

BESIDES enhancing the effectiveness of ERP, we will need to lower the vehicle growth rate.

Every weekday morning and evening, we feel the impact of our 850,000-strong vehicle population on the roads. When I go to dialogue sessions, I often get questions like 'Don't you think there are too many cars on the roads?' People tell me it is not just the city areas that are getting congested but also suburban areas like Serangoon and Thomson, which they say get chock-a-block full of cars in the evenings.

One of the reasons for this rising congestion is that in applying a 3 per cent growth rate to the vehicle population base, we have been adding 25,000 vehicles to the roads each year, compared to 16,000 vehicles back in 1990 when the Vehicle Quota System was introduced. If we continue at a 3 per cent growth rate, we would have enough vehicles, packed bumper to bumper, to turn our entire road network into a giant carpark in the not-too-distant future. If we take into account that road growth will go down to 0.5 per cent a year, then clearly the 3 per cent vehicle growth rate is no longer tenable.

We will, therefore, lower the vehicle population growth rate from the current 3 per cent to 1.5 per cent from Quota Year 2009 (beginning in May 2009). We will review the growth rate after three years, and assess then whether a further reduction is necessary, in light of the slowdown in road growth.

Moving a nation

QUITE a number of people have suggested to me that I should just focus on improving the public transport system and leave these tough car demand measures to the future. They argue that since we are making such significant improvements to our public transport system, this should be sufficient to deal with our congestion problems. I wish it were so.

But unfortunately, I know that it is not the case. The reason is that even if we free up some roads because some motorists decide to switch to public transport, other motorists will soon take their place, attracted by the smooth-flowing traffic and very soon, these roads will again be congested. So improving public transport is necessary but not sufficient in itself to deal with congestion. We need both - public transport improvements and congestion measures.

There is always tension between the individual's personal interest in wanting unrestrained driving and the social goal of a liveable city. We have to decide whether as a people, we are willing to take hard decisions that will benefit our country; or whether we will, like many other cities, postpone the necessary, store up the trouble and suffer future gridlock, with the attendant costs to the economy and living environment.

So we must move - building up our public transport so that people will have a viable alternative to the car, and taking firm steps to curb excessive car travel demand so that all of us will enjoy a quality urban environment now and into the future

New Transport Plan Jan 31 2008

Jan 31, 2008
ERP network widened, charges going up
16 new gantries and other changes are aimed at ensuring that 85% of motorists enjoy a smooth ride

By Christopher Tan, Senior Correspondent
THE bitter medicine aimed at easing road congestion was spooned out yesterday.
Motorists will have to pay more to use the roads, said Transport Minister Raymond Lim, as he unveiled the third and final instalment of the Land Transport Review.

Congestion levels have gone up by about a quarter since 1999, he noted. To arrest this, 16 new gantries will go up between April and November, making 71 in all.

On top of this, a new price structure will be introduced gradually from July: From then, passing each gantry will cost motorists at least $2, up from $1 now; and subsequent jumps in the road pricing fee will be $1, instead of 50 cents.

'Instead of resorting to so many small adjustments, it would be more effective to make larger rate increments,' Mr Lim said.

The Government will change the criteria for deciding which roads will be priced under the Electronic Road Pricing (ERP) system. It will also change the 'trigger point' for increasing the ERP rates along roads already priced.

RELATED LINKS
More gantries
Now, as long as average speeds on expressways and arterial roads fall in the 45kmh to 60kmh and 20kmh to 30kmh ranges respectively, all is well.

Soon, 85 per cent of road users must be able to move at these speeds to stave off ERP or a rise in the ERP fee.

Bitter as the medicine is, the Government is also offering some sugar to go with it.

Road tax, cut just last September by 8 per cent, will be cut by another 15 per cent - which will more than offset motorists' ERP expenses. This tax cut will cost the national coffers $110 million a year.

Mr Lim stressed that ERP was never meant to be a Government revenue earner, and that the long-term policy was to shift vehicle taxes from ownership to usage.

And by beefing up public transport - changes to the bus and rail systems have been announced over the last two weeks - the Government also hopes to coax car owners onto buses and trains.

Two other sweeteners were unveiled yesterday for motorists: a cut to the additional registration fee (ARF) and new road projects.

The ARF, now at 110 per cent of the vehicle's open-market value, will be cut by 10 percentage points from March and cost the Government $200 million a year. The change will apply to cars bought with certificates of entitlement secured from the March tender on.

As for road projects, $14 billion will be spent on building roads over the next 12 years, a leap from the $3.4 billion spent in the last decade.

One of them is the 21km North-South Expressway to link Woodlands to the East Coast Parkway. Ready by 2020, it will cut commutes from the north-east by 30 per cent.

The Marina Coastal Expressway linking the Kallang Expressway to the Ayer Rayah Expressway will be ready in 2013; the Tampines Expressway and the Central Expressway will be widened.

Going forward, fewer roads will be built, said Mr Lim. This is because 12 per cent of Singapore's land space is already taken by roads, nearly as much as the 15 per cent now sitting under housing.

Besides, he said, building more roads 'is like telling a person who's suffering from obesity that the solution...is to buy bigger trousers'.

To give motorists an attractive alternative to driving, the frequency of bus services along corridors affected by the ERP expansion will be upped to one every 12 minutes by June, from one every 15 now.

And for the first time since mass transit started here two decades ago, bus services will be allowed to duplicate sections of mature MRT lines.

The land transport masterplan, the result of a year-long review, aims to get 70 per cent of morning peak-hour trips made on public transport, from 63 per cent now.

The medicine may already be working, at least with marketing executive Loh Ye Ling.

The 23-year-old is revising her year-old plan to buy car. She realises now that if she drives daily from her Hougang home to her Bugis office, she would spend far more than if she were to take a bus.

She said: 'I can't afford to spend so much on ERP, though road tax will be cut.'

Mr Cedric Foo, who heads the Government Parliamentary Committee for Transport, said: 'I don't think it's easy, once you get a car, to move to public transport. But as we narrow the gap between private transport and public transport standards, motorists would, over time give up their cars.'

christan@sph.com.sg