1. The Land Transport Authority (LTA) has completed its study on measures to ease the transition to a lower vehicle growth rate of 0.5% p.a. in light of the slow-down in the rates of de-registration in recent months.1
2. The following measures will be implemented to ease the transition with effect from August 2012.
More gradual reduction in vehicle growth rate
3. In October 2011, LTA announced that the vehicle growth rate will be reduced from the current 1.5% p.a. to 0.5% p.a. from August 2012. Following this review, the vehicle growth rate will now be reduced to 1.0% p.a. from August 2012, before being further reduced to 0.5% p.a. from February 2013 to January 2015. This will make available about 390 more COEs per month from August 2012 to January 2013. These additional COEs are equivalent to about 10% of the current monthly quota.
Deferment of COE adjustments for over-projections in 2008/2009
4. A total of 4,789 remaining adjustments for over-projections in Quota Years 2008 and 2009 as well as expired COEs from 2009 were scheduled to be spread over bidding months from August 2012 to January 20142. These adjustments will now be deferred for 1 year from August 2012 to July 2013. They will resume from August 2013 to January 2015. This will make available 266 more COEs per month (or about 7% of the current monthly quota) from August 2012 to July 2013.
5. These two measures will bring about a smoother transition to a lower vehicle growth rate, as the Government continues to manage the growth of the vehicle population at a sustainable pace.
Reduction in Contribution Rate to Category (CAT) E
6. Currently, 25% of COEs from de-registered vehicles in each vehicle category form the COE quota for the Open Category (CAT E), which can be used to register vehicles from CAT A to CAT D, to provide flexibility for changes in the vehicle mix.
7. To maintain a more stable supply of COEs in each COE category under a lower vehicle growth rate, the contribution rate to CAT E will be gradually reduced from the current 25% to 20% from August 2012, and to 15% from February 2013. The effect of this is to return more COEs from de-registered vehicles to their respective categories, with proportionately fewer quotas in CAT E.
8. The quota for the COE bidding period from August 2012 to January 2013 will be announced in July 2012.
1 Replacement COEs will be issued in August 2012 to January 2013 for vehicles de-registered in January 2012 to June 2012. The average number of vehicles (excluding taxis) de-registered per month between January 2012 and April 2012 is 2,395, compared to a monthly average of 2,696 between July 2011 and December 2011.
2 A total of 17,558 adjustments for over-projections in Quota Years 2008 and 2009, as well Quota Years 2008 and 2009, as well as expired COEs from 2009 were scheduled to be spread over 46 bidding months from April 2010 to January 2014. An adjustment of -12,769 has already been factored in the quotas from April 2010 to July 2012.