Martin Lee @ Sg
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COE Changes

Yesterday, LTA announced the outcome of their review of the COE system.

The COE change is that a new criterion of the engine power of the car not exceeding 97 kilowatts (kW) will be added to the category A cars. With this refinement, about 50% of the cars in category A will end up in category B.

The COE change will only take effect from February 2014. This means that in the short term, COE prices could be heading upwards. This is because buyers of cars that will be affected by the change will be rushing to secure their COE before February 2014. Similarly, category B car buyers will also want to get their COE before more cars get added into their category.

I was actually a bit surprised on the extent of the change. This was supposed to be a major review of the 23-year COE system but after three months of consultation and public feedback in which many ideas were mooted, LTA has finally decided on a small refinement to the COE system. And this COE change is something that is pretty obvious to everyone from the start.

All the other ideas like multiple car ownership surcharge, banning dealers from bidding and a pay-as-you-bid system have been discarded.

Reading the news release from LTA, I feel that it serves more to explain why all the other ideas were not adopted and that the current system is sound.

There is even a lengthy presentation on why a pay-as-you-bid system will not make much of a difference:

COE-Refinements-Pay-As-You-Bid

While I agree that it is difficult to come up with a perfect system that is acceptable by everyone, I expected more fundamental changes.

Having said that, as long as you stick to a bidding system and not a balloting system, prices of COE are not going to come down no matter how hard you tweak it. The price will always be a function of demand and supply. The harsh reality is summed up in the last paragraph of LTA’s news release:

Given Singapore’s scarce land resources, it is not possible for everyone to own a car. The Government will continue to invest heavily in improving the public transport experience, as public transport is the more sustainable mode of travel, as well as improve taxi services, to provide Singaporeans with a high degree of mobility.

But how about having a separate COE category for non-Singaporeans so that the priority for owning a car is given to Singaporeans?

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2 comments
Danny says 5 years ago

The objectives of COE have changed. COE was supposed to control car ownership and road congestion. Now the best minds in the civil service are using COE as a social tool to ensure that roads are not just being congested with luxury cars, but congested with BOTH mass market AND luxury cars. Ridiculous.

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so1trg says 5 years ago

They are the one who cause resource to be scarce ( by increasing the population to 7m) and they got the bloodly cheek to make that statement …

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