Minister for Transport & Second Minister for Foreign Affairs Raymond Lim, in an interview with Lianhe Zaobao (Lee Ching Yee and Teo Woan Yee) on 2 July 2008, shared his views on a wide range of land transport issues. These include feedback received on the Land Transport Review, public transport market structure, competition and improvements, as well as the ERP policy. Below is an edited transcript of the interview.

(The interview was reported in Lianhe Zaobao in two instalments on 6 and 7 July 2008.)

PUBLIC TRANSPORT

LHZB: What is the ground feedback since the announcement of the comprehensive Land Transport Review? Has the Minister personally received letters from commuters / motorists? Have the feedback received so far been favourable? Do you think that people are generally able to see or understand the objectives set for public transport?

Minister: I think most Singaporeans support the principal goal of the Land Transport Masterplan, which is to ensure that we have a quality urban living environment, even as our economy and population grow.

Most Singaporeans also understand that given our compact size and how densely populated we are, we need to do two things. First, we need to make a decisive shift towards making public transport a choice mode. And second, we need to aggressively manage road usage.

People understand the big picture. But for some particular policies like the ERP, at the micro-level or the individual level, motorists who are affected will be unhappy. That is understandable. But it is not possible for us, as a government, when we make a decision such as this, to please everyone. We have to do what we believe is in the overall long-term interest of Singaporeans. So, we have a difficult trade-off to make here. The trade-off is between the individual who wants unrestrained driving - freedom to drive wherever he or she pleases at whatever time - versus that of society’s goal of a liveable city.

As for feedback, one of the key things that we decided to do when we reviewed our land transport policy was to put people at the centre of our land transport system. This is very important because once you put people at the centre of it, then it starts to inform all the policies that you make. We look at not just the macro picture, for example, building train lines, but also the micro dimension - from the time the person comes out of his home to the time the person reaches the office. It is the whole journey experience that we are looking at.

Putting people at the centre of our land transport system - what does that mean in practice? Well, it means that we need to engage people. The feedback that we receive, we will consider it carefully. This is a continuing process because we expect needs and expectations to evolve over time and we would need to adjust our plans accordingly.

Another way to look at this issue is to say that land transport planning is a technical matter – only for the experts. Some countries and cities have gone this way. We have not. Indeed some parts of land transport planning are technical in nature, but there are other aspects that involve trade-offs. And whenever there are trade-offs, the community must be involved. That’s why the LTA, as part of the Land Transport Review, has now set up a dedicated unit – the Land Transport Community Partnership Division – to institutionalise this philosophy.

Let me give you an example. In one constituency that I visited, there was a new condominium development and the residents there wanted LTA to punch through a cul-de-sac. They wanted a direct route to the main road rather than the present more circuitous route. We explained to them that this was not strictly an LTA decision. Technically, can LTA do that? The answer is “Yes”. LTA did a traffic study and it is possible. However, those people living along the road with the cul-de-sac, in private houses, would be unhappy. They said it would create a lot of traffic when previously there was none. So, we said that this is a matter on which the community has to decide. You make the decision as a community with different interests - the condominium owners and the people who stay in the landed properties – and you strike the appropriate balance.

It is very important that we engage the community. Right now we have an LTA representative in all the constituencies, and the feedback from the Advisors has been positive. They say it helps. It helps to have someone who is there when they are discussing issues. The LTA representative can give some input, and will try his best to find a way to deal with issues that come out at the community level. He cannot solve all the problems, but at least he listens to them and he has an understanding of the issues.

LHZB: What about yourself? Have you received any letters or emails from the public themselves to you?

Minister: Yes I do, from people living in different parts of Singapore. One definite trend is that people are positive about the public transport improvements.

LHZB: Any letters that have left a deep impression that you can share with us? Or hate mails?

Minister: If you take ERP, I would say that the majority who emailed me, were not happy with it. But what was significant was that there were also those who supported it strongly.

One writer said to me that it is a very difficult decision, and that I must expect a good number of the public to be unhappy. But he said I should not be discouraged and should stay the course, because this is the right thing to do. Another said that he lived in Woodlands and before we had put in congestion charging at the CTE, it was not easy for him to go home. But now he can go home and be with his family, rather than get stuck in the traffic. Then, there are others who urged us to extend it to Saturday afternoons!

For the trains and the railway network, people are happy that we are doing all these improvements. But there are some people who say, “Can you build the train lines faster?” or “Can you put it near my particular town?” These are views that you must expect to get and manage. For us, what is important is to take a long-term view and to look at it from the perspective of benefiting the country as a whole.

LHZB: How about negative letters?

Minister: Well, again take ERP. A constant refrain in the negative ERP emails is that the writers think the Government is simply seeking to raise revenue, and we try to explain to them that this is not the case. If you look at the latest exercise - $70 million increase in revenue from all the ERP changes this year, against $110 million in terms of road tax reduction and $200 million in terms of ARF reduction. So it is $70 million versus $310 million. It is not a revenue raising measure.

In fact, if you travel less, the Government is happy to collect less because the aim here is to deal with congestion and not to use it as a revenue measure.

When we started ERP in 1998, we said that what we are going to do is to bring down the fixed costs to motorists as we introduce usage charges. So if you take 1998 to 2007, in terms of road tax reduction, excise duties, ARF and you add all that up, the revenue forgone per year permanently is $1.2 billion dollars. What has been the average in terms of revenue from ERP over the same period, every year? $100 million. If you look at the numbers, it doesn’t support this position which people often come up with: “All you are trying to do is just a revenue measure. You are just trying to put up a gantry and just collect money from people.” That is absolutely not true. That’s not the intent.

You have with ERP, a classic collective action problem. The impact of ERP is concentrated and specific, whereas the benefits are diffused across a larger population base. If you look at the numbers, only 24 per cent of vehicle owners pay ERP daily. This means 76 per cent actually benefit from the road tax savings without having to pay higher ERP charges. But because the 24 per cent is specifically affected, they voice out their unhappiness loudly whereas the majority who benefits, are quieter as the benefits are diffused.

So I think it is useful at times for those who see the benefit to put across their point of view too. To say, “Well, there is another way to look at these things.” I know the newspapers sometimes try to do that. I think TODAY (1 July 2008) published a different, positive view on ERP from a Singaporean who is now living in Adelaide. This is useful as it helps give perspective to the debate on congestion charging.

LHZB: Have the various measures started to show effectiveness? Any increase in ridership so far?

Minister: The Land Transport Masterplan is a road map for 10 to 15 years; some of the measures are long term measures. We are going to double the rail network in 12 years, 2008 - 2020, so some of the benefits will be in the longer term. However, even for the rail network, you will see some benefits in the short term. There will be a new extension or a new line almost every other year, because we are not waiting for the whole line to be completed before we open it. We are opening the line in stages, so that the benefits come in earlier.

There have also been more immediate improvements. If you look in terms of capacity, we have increased bus frequencies. For basic bus services, 80 per cent of them will go from 15 minutes headway during peak periods to 10 minutes by 2009. And this year, basic bus headways will be not more than 12 minutes for corridors affected by the ERP changes. For feeder buses, we are introducing new peak periods headways of 10 minutes for 85 per cent of the feeder buses by August 2008, and 90 per cent by August 2009. So the frequency is increasing.

For train trips, if you look at what was introduced in early part of this year - 93 additional train trips per week in February and by May, SMRT has put up another 516. If you add together, it is about 600 additional train trips per week. To the commuter, it has cut down waiting time by about 10 per cent and it is less crowded. Also, in terms of qualitative improvements like journey speed, we have introduced more bus lanes. For the normal bus lanes, we are increasing that by 25 per cent and for the full day bus lanes, we are tripling it. When all these kick in, we expect average bus speeds to improve by about 30 per cent, bringing it up to about 25 km/h.

These changes are beginning to have an impact on the ground. Recently, I was at a dialogue session at the LKY School of Public Policy. One student from the audience told me that he finds that the bus that he takes to school has increased in frequency during the morning peak hours.

For myself, when we started to introduce this, I went down to Toa Payoh MRT to check. That is where it is very crowded and people have been saying that something should be done. Once we increased the frequency, we went down to time it. It was 2 - 3 minutes. That means if you are now on the platform during the peak period, you don’t have to wait for very long to get into the train to reach your destination. All these have an impact on ridership. If you look at our ridership numbers, January to April 2008 compared to a year ago, it has gone up by 7 per cent.

LHZB: That’s for trains?

Minister: It’s the public transport ridership combined, bus and MRT. That has gone up. Part of the reason is because of all these improvements. The other part could be because of the oil price increases and motorists may find it expensive, so they shift to public transport.

What is important for us, as I told the public transport operators (PTOs) when I met them, is that we have a window of opportunity. People who normally would not take public transport are now taking it. We need to give them a good experience so the shift becomes permanent for them. We have this window of opportunity and the PTOs should gear up to meet this.

Interestingly, if you look at surveys done, people who are most critical about public transport are typically people who never take it. They don’t take it so they don’t know the situation. But those who take it, their feedback are much more balanced.

LHZB: Because they can see the improvements in it by daily trips and they can compare.

Minister: Yes, they can compare. If you listen to some people, you think that the base is very low, but that is not true. Take, for example, the survey that we have done. When I came into the Ministry, I said that it would be better to do surveys. If not, it would be very difficult to assess the true situation on the ground. It would be all anecdotal – “You say this and he says that”. How do we know what the true situation is, unless we conduct proper public transport surveys? So, we started it in 2006, covering both trains and buses. In the latest survey in 2007, 86.5 per cent of respondents said that overall, they are satisfied with the level of service. Of course, if you ask them whether there are areas to improve, they will say “Yes” - such as improving waiting time and journey time, which is understandable. But overall, are you satisfied with it? 86.5 per cent say they are.

If you take international rankings, we are in the top three in the UITP ranking of public transport systems. We have a good public transport system. But for people who have not taken public transport, their views are different. Now, we have this opportunity. Some of them are trying it. If the car owners, instead of making 5 car trips, now make 2 out of the 5 trips on public transport, that would be an improvement already. That is what we are trying to do.

LHZB: Do you have any idea what is the percentage of this kind of marginal drivers that we are looking at right now?

Minister: We don’t really have a percentage but we have an overall global number. We are now at 63 per cent in terms of public transport modal share for the morning peak and we need to shift it to 70 per cent, which is a huge challenge. Effectively, taking into account the expected growth in travel demand, it means doubling the number of public transport trips per day. But we have to try to achieve this in order to ensure that Singaporeans enjoy a high-quality living environment. That is the target that we are aiming for.

LHZB: What kind of motorists will be more likely to make the switch first?

Minister: That is difficult to say. It depends on individual circumstances. It is difficult to say what the trigger points are, for different people. The economists would say that if you were to make the shift, you would think about the value in terms of taking the car compared to taking public transport and you weigh the two things. You decide which one from your individual circumstances is more valuable to you and you make the decision. That is the way to look at it analytically.

LHZB: There is a common understanding in the market that maybe the middle-income group, who are suffering from the rising cost of oil, are more likely to make the switch as compared to those who drive Mercedes or BMWs.

Minister: It is easy to make generalisations but it really turns on individual preferences and circumstances. For example, you may not be driving a Mercedes, but if you are sending your wife who is pregnant to the hospital, you might well use the car rather than take public transport. But for another trip, say to work, you might take the premium bus service rather than use the car. Even for those driving luxury cars, they may not make all trips by car. It may be more convenient to take public transport say to Orchard Road, because it is well served by buses and trains, compared to having to deal with the need for parking if you drive.

LHZB: How confident are you in pushing more people onto public transport? What if this effort failed and motorists still insist on driving?

Minister: It is interesting that you say “push”. I would say that you would need both “pull” and “push” measures to make public transport a choice mode. You cannot just have push measures; it is not going to work. You have got to have pull measures, which I mentioned just now. Key steps that we have taken - on the rail network, we are doubling it; bus frequencies, we are bringing it up; bus speeds, we are trying to help with the bus lanes; and even bus information, we are improving that now because we think it is important. We are coming out with a Public Transport Journey Planner so it is easy for you to plan your trips. All these are pull measures. But at the same time, we recognise that pull measures alone are not enough.

Look at cities like Seoul and Tokyo, they have good public transport systems, but they still get horrific traffic jams. It is very difficult for people to get to work. When I was in Zurich last year, I met the Mayor and the transport officials. They have a very good public transport system and many would say they are the gold standard. What they told me is that the first decision they made was to have push measures, and not just pull measures. What they did was to bring down road capacity and raise parking charges. So you would think twice before deciding to drive into the city.

If you simply have the pull measures without the push measures, it doesn’t really solve your congestion problem. In fact, if your pull measure is very successful in attracting marginal drivers onto public transport and therefore freeing up the roads, all that will happen is that you will induce new drivers on the roads. Previously, people who won’t drive on the roads now see that the roads are quite congestion-free. So they will drive, and that will clog it all up. That is why you need to have both.

The difference in Singapore is in the way we have done it. In some countries the way they try to do the push measures, is to let the roads become congested. The way congestion is cleared is through a queuing system. You take Moscow, for instance, the Ambassador was telling me about the situation in Moscow when SM and MM visited recently. To get from the city to the airport, which is 60 km, it takes 3 – 4 hours on the car and you cannot predict this. Sometimes, it takes 4 hours. Sometimes, a bit less.

LHZB: Anytime or …?

Minister: That is a very good question. In fact SM asked, “How long does it take to do this 60 km?” and he was told, “It takes 45 mins for this 60km.” So SM asked, “When can you do this?” and the Ambassador said, ”Only from 11pm to 5am.” So if you have such a system, you end up pushing people onto the public transport system. But it is a very inefficient system because people don’t really have a choice.

It would be like in Bangkok. In Bangkok, the traffic police are trained to be mid-wives. Everyday when they go out to do their job, they bring out the tube to suck the mucus out of the new born baby and an instrument to cut the umbilical cord. They have to double up as mid-wives because the traffic is so bad and the baby cannot wait for the congestion to clear.

We should never go down that road as that would make it a very different Singapore. What we do is to have congestion charging. In other words, we put a price to it and give people choice. If you need to drive during the peak period, at least you know you have a choice. The other way is not to regulate traffic at all and just let people go in there and get stuck.

On the issue of failure - in matters like this, it is really a matter of political will. If you study the literature on congestion charging and speak to transport officials from London to New York, they say this is one of the measures that you have to use. There is a political cost to it. Whether you do it or not, is a matter of political will. If there is a failure then it would be a failure of political will, not of policy. But you know it is the right thing to do and you have to decide whether you are willing to do it.

LHZB: Is it getting more and more a challenge to balance, because all policies will be related to how much political cost that you are prepared to take? So has it become more and more a challenge to balance these policies that is good for the society/country versus the political cost you have to pay?

Minister: The way I look at, what matters is for us to do the right thing when the situation calls for it. Rather than for us to do the politically popular thing. It is very tempting to defer a politically unpopular decision like ERP, but you know that by doing this, all you are doing is to store up trouble for the future and leaving it for someone else to clear.

I don’t believe in and I don’t subscribe to “Nimtoo-ism” – “Not in my term of office”. Because congestion charging is unpopular, some politicians may practice “Nimtoo-ism”. I think if you do that, all you are doing is a disservice to the people who have elected you and to Singaporeans as a whole. So that is the way I think we should approach this issue: to do what we know is necessary even if it is politically unpopular. If you don’t do that, if you do what is politically expedient in the short term; then in the long term, there is a big price to be paid by everybody.

LHZB: LTA will take on the role of central bus network planner by 2009, and we understand that the authority has started to call for tender for consultancy work. How would this centralised planning work be carried out? How can the authority ensure that the new routes generated would not cause great impact to commuters' life? It is always a challenge to ensure that everyone is happy with the new arrangement. Commuters may blame the Government directly for any unhappiness in the future. Is there a concern that this may lead to a loss of votes eventually?

Minister: Firstly, we need to understand why we want to do this. We have a situation currently where bus routes are planned by the PTOs and the rail network is planned by LTA. But yet it is quite clear that when you want to make a decisive switch towards public transport, people have to look at public transport as a whole. The positioning must be public transport as a competitor to the car, rather than bus versus rail which would be counter-productive.

So, one of our key recommendations in the Land Transport Review was to have one central planner for public transport. And this central planner would therefore look at the whole network, the whole system and optimise it for the commuter. What are the implications of this? It means that the bus network will be better integrated into the rail network. We would also look at coordinating the transfers - timing the transfer and scheduling it – so that when you hit the interchange or a transport node, you don’t have to wait long for the next leg of your journey. That would also reduce the inconvenience that some people feel when they have to transfer. In fact, successful public transport systems have a high transfer ratio, because that is how they maximise the whole network. We are trying to move towards this.

So that is what LTA will do when LTA takes on this role. What they won’t do is what they did in Korea. Professor Kim, one of our international advisors on our panel and who was the Chairman of Seoul Bus Reform Citizens’ Committee, told me that one lesson we should learn is not to do a “big bang” approach. Seoul did a “big bang approach” and overnight, they changed the whole bus network. The next morning, people were confused and there was chaos and great unhappiness. We won’t do that. Instead, whatever measures we roll out, we will roll out gradually so as to minimise disruption to commuters. For instance, LTA may study the network now and find that there are certain gaps, so they will fill up the gaps. Or, if there are certain feeder buses taking circuitous routes, they can make them more direct. So LTA will look at it this way, rather than shake the whole system up because otherwise, the inconvenience caused will be tremendous. This then is how we are going to approach central planning.

Also, central planning doesn’t mean that we will dispense for the need for the route to be commercially viable. Once you lose that commercial discipline, you are going down a slippery slope. What LTA will do is to look at it as a whole, and package the routes such that when someone bids for it, the package as a whole will be commercially viable.

LHZB: Can the commuters be assured that with this centralised planning there will only be improvements and not disruptions to what they have now?

Minister: It is not possible to give such an assurance. There are about 5 million public transport trips a day, so when you start to make adjustments, some people might be unhappy. But what LTA will do is to plan so as to benefit the majority. And for the minority that is inconvenienced, to minimize the inconvenience to them.

LHZB: With LTA taking over the central planning for buses, they will have to take over the responsibility as well as the blame. So what is going to happen when commuters complain about the routes? Will that lead to a higher political cost eventually?

Minister: LTA is already doing rail planning.

LHZB: But it is more difficult to please in term of bus planning compared to rail?

Minister: You just have to manage this, by engaging people and explaining to them. It is not a good reason for LTA not to do it, just because the public will hold them accountable. I think they should do it because it will benefit Singaporeans as a whole. And in the process, they will have to work very closely with the public transport operators and the community with the PTC keeping its oversight role.

MARKET COMPETITION/STRUCTURE

LHZB: Our current PTOs are both public listed companies. Some have commented that for the PTOs to answer fairly to both shareholders and commuters, is almost a mission impossible, as both missions contradict each other. Is this the most efficient structure?

Minister: I think whether or not they are fair to both shareholders and commuters, is something that the PTOs have to answer, as they are doing the balancing.

But the larger question is whether this is an efficient structure. The answer is “Yes”. If you look at the way we have set the framework, we have put in place a price cap formula.

The purpose of the price cap formula is to force efficiency into the system. How does it force efficiency? It basically removes from the PTOs the power to raise prices as high as the market can bear due to their dominant market position. They cannot simply try to make profits or increase revenue by just raising the fares, because we have put in this price cap. This price cap is not pegged to their individual costs but to national cost indicators, which is the CPI and the national wage index.

So how can the PTOs make profits? The only way is to be efficient. The operator has to be productive, raise ridership and manage its costs. When they do this, commuters also benefit because there is a clawback mechanism through the productivity component which is shared between the operators and the commuters. That is the system that we have. It promotes efficiency and we can see the results. Empirically, on a purchasing power parity (PPP) adjusted basis, our public transport fare is lower than that in Hong Kong, Tokyo, London or New York City. So, the system does promote efficiency.

The follow-on question to this is, “Okay, so you do that and they have the incentive to keep their cost low, but how do you ensure that quality is not compromised?”

The way we have address this is that the PTC separately sets the minimum service standards for the bus operators and the LTA sets the rail operating performance standards.

LHZB: There is the sentiment that public transport as form of public service should be heavily subsidised, and PTOs should not be thinking too much about profit making. How would the Government talk over such sentiments?

Minister: The public transport system is actually very heavily subsidised in Singapore. The whole public transport infrastructure is subsidised by the State. The MRT system that we enjoy in Singapore today cost the Government $13 billion. And the new rail lines that we are putting through over the next 12 years will cost $40 billion.

But where is it not subsidised? It is on the operational costs. Once we start to subsidise operational costs, we then create inefficiencies in the system.

Why? Firstly, if you have a system where you charge below cost, by getting the State to come in and subsidise, does it mean that Singaporeans don’t pay for it? Not true. It means that instead of the users paying for it, taxpayers pay for it whether or not you use the public transport system.

Basically, there are only two persons who pay for these things. Either you say, user pay or you say, taxpayers pay. And then, you have to answer which do you think is fairer and more efficient.

LHZB: Or maybe we can ask the person, if the Government subsidise that, are you willing to pay more tax?

Minister: Good question. That is the second point.

What happens is that the minute you bring the cost down and under-price the service, people will over-consume. If you look at the experience of other countries and other cities, the deficit that goes into funding public transport – operational deficit – keeps on going up. London is a good example; it’s been going up. I mentioned just now, the Seoul bus reform. The same Professor Kim told me that previously they were like us. When they did the reform, they asked why don’t we subsidise. Within a short time the subsidies shot up to US $400 million. So like you said correctly, the issue is, are you willing to pay more taxes for this?

The operating cost to run both the rail and the buses is probably in the region of about $1.3 billion. So, let’s say it’s free like some people have written in to say, “Make public transport free in Singapore”. Then the question that you pose is the right one. Would you be okay if we raise GST by another 1.5 percentage points in order to make public transport free? And even after we do that, it is not fixed, as demand might start to increase because people don’t have to pay the actual cost. The demand then starts to go up and you have to come back and raise taxes again.

So it is a better system where if you use it then you pay for the operating costs, rather than for everyone to pay for it through taxes regardless of whether you use it or not.

And related to this, is the view that if you don’t make the operators have a profit incentive, somehow the cost will go down. But it doesn’t work that way. The operators would then have no incentive to lower the cost because the State is paying for it.

You will find that once you take away this profit motive from the public transport operators, the cost starts to go up. And you can see that in many examples. In Jakarta, you have the same bus fares but one entity is run by the State and another one is run by a private company. The private entity always makes a profit, but the one owned by the State always asks for more subsidies. But they both operate under the same conditions.

Take the example of Adelaide, where previously the bus operator was owned by the State. They told us that when they introduced the profit motive, the cost dropped by 20 per cent because there is now an incentive to be efficient where previously there was none.

Contrary to what people think that by taking away the profit motive the cost goes down and fares will be lower; the opposite, based on evidence, would likely to happen. So many countries are actually introducing this sort of framework. London has done it since the mid 80s. Adelaide and Perth are also doing that.

LHZB: With competitive tendering, will the authority require new-comers to also be multi-modal players? How would the Government ensure that the incumbents will not have total advantages?

Minister: The way we will do this competitive tendering, is not to package rail and bus services together. If we package them together, you will have to be a multi-modal player to enter the market. So if you are only running buses, you can just bid to offer bus services. If you are a multi-modal player but you want to bid for bus services, it is fine with us.

How do we ensure that players can come in? We are looking into this. Some common facilities might have to be owned by LTA. For instance, depots. If the major depots are owned by the incumbents, then you might have a classic case of “contract capture” because the incumbents already own the essential structure for operations. So you may want the structure to be owned by the State, so that when you tender it out, the new company does not have to come in and have to set up a duplicate set of common infrastructure.

We are conscious of this. We will see what we can do to lower the barriers to entry to facilitate the competition.

LHZB: We'll be building more MRT lines and highways in the next 12 years, how will the rising cost (construction, manpower and energy cost) impact these projects? Is the Government prepared to inject even more budget into these projects? Will there be any delay to the completion dates? Are we likely to have more Public-Private Partnerships (PPP) projects in the future?

Minister: In January when we went to Cabinet and got the approval to proceed with all these lines, we also project the possible future cost increases for the costing that we put in. So all these are actually projected in.

Right now, the projects are basically on track.

Will we consider PPP? Any project that is above $50 million, not just for the Transport Ministry but any Ministry with a big project, should consider PPP. It doesn’t mean they have to do it but they have to evaluate it, and make a decision whether it is suitable. Some projects may not be suitable and you won’t do it.

Electronic Road Pricing (ERP)

LHZB: Was there any amendment to the ERP plan before it was first announced? Is the new ERP solution sufficient to solve congestion problem? Especially at a time when our public transport system is still not extensive enough to attract motorists to make the switch?

Minister: To answer this question, it is useful to understand some critical aspects of policy making. There are three critical things. First, you have to decide what is the desired outcome that you want to achieve. So in this case, it was to ensure that we have a quality living environment and as part of that, we have to ensure that we don’t suffer gridlock on our roads.

Having decided on the policy outcome, you then ask yourself what is the right policy that will achieve this outcome?

Here, we decided that congestion charging or ERP is one of the key measures to achieve this. We introduced ERP in 1998 and when we look at it, we came to the view that we need to make it more effective, because we haven’t made any significant changes to the system over the last 10 years. So we need to enhance the ERP system. That’s the second part.

Then the third part is how best to implement this.

So the three parts are: you decide on what is your goal, what is the right policy to achieve the goal and how best to achieve this policy.

Now throughout this process, there will be revisions to the policy because you are engaging people, debating, discussing it and making adjustments to take in these inputs.

So this is what happened, not just for the ERP but the whole Land Transport Review. And precisely because we have taken great pains to do that, I’m confident that the package that we finally settled on will help us achieve our goal, which is a liveable city.

LHZB: We understand the need to adjust ERP to influence motorists’ behaviour. But in view of the current inflation issue, is there a concern that the timing is not right? Any worry that this may lead to a higher political cost?

Minister: I have answered this earlier. I think what is important is for us to do the right thing, if the situation calls for it, rather than to do the popular thing by postponing it, and leaving it to someone else to solve the problem. This is because when you postpone it, it just makes the problem bigger.

We looked at all these data during the Review, and looking at the traffic data, we knew that congestion was building up. If you look at some of the numbers, for example in the city area, say North Bridge Road and South Bridge Road, Bras Basah Road, Stamford Road, the cross-town speed has dropped by 22 per cent in just two years.

And as I mentioned, in the process of doing this Review, we met with many people. When we met with the senior media editors, they told us that the congestion is getting worse, not just in the city. They asked me if I have been to Thomson and Serangoon. They said these areas are now also becoming a bit of a problem.

When we met with bankers - MAS regularly meets with financial institutions – they said that congestion is becoming a problem in the city area. Anyone who tries to drive into the city on a Friday evening in particular will face a big challenge. Last year, there was a report in the UK Telegraph. The article said that if you are a British person and given the opportunity to become an expatriate in Singapore, grab it. He says, the entertainment is good, the food is good and Singapore has good accommodation. But he also said that peak hour traffic jams are becoming a norm.

So we know that this is what is happening, hence we have to act and we have to act now. We can’t postpone it. If we were to postpone it, there will be a cost to the economy and there is a cost for the society as a whole, in terms of our living environment.

Now there are some people who said that we are not as bad as Bangkok. But do we really want to be like Bangkok? No. For Singapore to be like Bangkok, it will be a very different Singapore. It will be very difficult to attract business people to come. Business people and investors come, not just because of tax incentives. They want to know what the living environment is like in Singapore. If the living environment is one where you are always caught in a traffic jam, that would have a cost to us.

So we have taken all these measures through the years since 1975 with ALS and 1998 with ERP. Now, we are doing the next stage by making ERP more effective. If we don’t do that, Singaporeans will suffer as a whole. And that is the reason why we have acted

LHZB: But actually many Singaporeans don’t think that long term. It is very painful that their pockets are getting smaller and smaller. I understand your point but there are also some motorists who are really suffering because of the higher rates, or the operators are suffering because of higher operating costs due to ERP.

Minister: You mean the business operators?

LHZB: Yes, business operating costs.

Minister: Like you said, it is between looking at it in the long term and in perspective, rather than looking at it short term. If we don’t do this, the business operators will suffer more, not less.

You take say, Bangkok as an example. Recently, we had this senior Japanese businessman who spoke to the Government. He just got posted from Bangkok to Singapore. He told us that in Bangkok, he can only do two meetings in a day. Two external appointments because the traffic jam is so bad that that is all that he can do.

In Los Angeles - pizza delivery. It takes 45 minutes to do one to two miles to deliver your pizza because the traffic jam is just horrific.

If we don’t do anything, your business cost actually goes up. Because, let’s say you send your delivery boys out and they get stuck in a jam. The number of deliveries they can do a day will be much less. And when they get stuck in a jam, they are also burning fuel.

So there is this dimension. You don’t see because this is a hidden cost but it is a cost nonetheless. So if we don’t do this, the whole business environment in Singapore will be much less conducive. So we need to look at this issue in this perspective and see it for what it is.

LHZB: But I think the more worried ones are the small operators. The big operators have big pockets, they can cope with the higher operation costs. We interviewed some logistics companies. They said that because of diesel prices rather than the ERP, they foresee that maybe if it worsens, they might have to close down the company.

Minister: So like you said, it’s not just the question of ERP. You have diesel and other operating costs. These are business conditions that they have to find ways to adapt to.

LHZB: People can alter their commuting pattern, but the LTA can also extend ERP operational hours. Whichever what way, we are cornered, since ERP charges will filter down somehow.

Minister: I think we need to go back to the fundamental reason behind the ERP policy. The purpose of ERP is to manage congestion. As such, we do not extend ERP operational hours simply because commuters have changed their commuting pattern. ERP is only effected if the traffic demand increases beyond a certain point and the resulting congestion has to be managed. We do so, by putting a price for using the congested road to influence enough drivers not to use it, so that it becomes smooth flowing again. But given our land constraints, the trade-offs are becoming sharper, and increasingly, the alternative cannot be just to alter driving patterns, but to switch to public transport. We need to make a decisive shift towards public transport if we are to keep our city relatively congestion free and liveable.

That said, we are not using the ERP in isolation. It is just one of our slew of measures to ensure that our city is not caught in a gridlock. We are still building more roads and increasing the capacity of our existing roads. We have also introduced improvements to our public transport system to provide alternatives, not just for the commuting public but also for motorists who decide to make the switch.

For those who choose to pay the ERP, they can enjoy smoother flowing roads. Ultimately, the choice, whether to drive or take public transport, is for individual commuters to make.

LHZB: Another thing about ERP is that this time round the way it’s presented. Previously, we used to say that there are alternative routes but now it is like it’s all trapped. Would that be the trend?

Minister: When I announced the Land Transport Review, I tried to explain the very point that you brought up. I said that in the early days we could do that because it is easier for us. So if there is a road that is congested, we put a gantry and you have alternative roads that you can use. But increasingly, it has become difficult because we have 863,000 vehicles now. We use our cars very intensely. So for most of the roads, if we were to put in a gantry, the other roads, like you said, might become congested.

The alternative now, instead of an alternative road is an alternative mode or an alternative time. So if you feel that you really have to drive during that particular hour, and you think that the cost that you pay is less than the value you get in the saving of time, then you pay. If you don’t want to, then you don’t do so.

Some people say they don’t have a choice but to pay ERP, but the data doesn’t support it. If you look at the data, there are 5 million public transport trips a day. So there is a choice.

If you look at the CBD morning peak, there are 177,000 public transport trips into the CBD every morning. So there is a choice. Each individual has to make his own decision on how best he wants to make a particular trip.

The way to look at it is in fact, why do you want a car? The reason is that it gives you high mobility.

If you don’t have congestion charging, it defeats the purpose of having a car because during the peak periods and at popular roads, your mobility goes to close to zero. You get stuck in stop-start traffic. So which is more efficient? To allow you to get stuck with no choice - you may get stuck for one hour and as I said about the Moscow example, three to four hours. Or to introduce pricing so as to give you a choice and speed?

It is much more efficient to use pricing rather than queuing to clear the congestion.

LHZB: Another thing is about the London congestion scheme. They have this plan, as in you have residents within that area and then certain cars like budget cars, you get pro-rated rates. Can we work that out in our system?

Minister: Well, when we started our system, we decided that we should not start making value judgments as to the merits of a trip. This is important. We need to keep in mind the problem we are trying to solve here – congestion.

Once we allow meritorious claims, such as making an exception if the trip is to where the person lives, then we must expect that there will be other claims. Someone will say, “I have to visit my sick grandmother, so why do you charge me ERP for this trip?” It is a meritorious thing, visiting my grandmother. After all, the government promotes family togetherness and now you charge me. Or if I have to drop my children in school, “so unfair that you charge me”. Or like you said, “I live here, so if I live here, it is so unfair to charge me”.

LHZB: Or my car takes more passengers?

Minister: Once you start making exceptions for these meritorious claims, you will find that there are many meritorious people in Singapore. Everybody will put up their hands and say that “I am very meritorious.”

And the original problem that you are trying to solve, which is congestion, would have been undermined. You would have so many exceptions to it. So instead, we keep the system clean. This is what we need to do, and that is how we do it. So you don’t compromise your original objective.

LHZB: With the implementation of the five new gantries along the Singapore River Line, motorists are likely to stay out longer before heading home so as to avoid ERP. This does not go very far to help promote family life.

Minister: The Singapore River Line gantries are meant to discourage through traffic from using the city on outbound trips. In doing so, they help to manage the evening congestion in the area. Currently, through traffic makes up more than 30 per cent of city traffic in the evenings.

The argument that evening ERP does not go very far in promoting family life is flawed. If we do not have ERP to deal with evening congestion, then motorists will get stuck in a traffic jam, spend a long time on the road and not be able to get home on time. This is hardly pro-family. By pricing the road, we can be assured that if we choose to use it, we can reach home on time.

LHZB: ERP rate is getting more and more expensive. Will it lead to a greater social gap, only the rich can afford to drive and the others have to take Public Transport?

Minister: I think this is over-simplifying the matter as the social gap issue goes beyond ERP. The decision whether to drive or to take public transport is based on individual circumstances and how much value an individual places on his or her time, which is also dependant on the nature of the trip.

The underlying premise of the question is that public transport is only for those who cannot afford to drive. This is wrong. It is this misconception that we are seeking to correct by emphasising that public transport should be considered a mode of choice rather than a last resort. We are thus taking concrete steps to make it a viable alternative to the car. We are already seeing some results as we increase bus and train frequencies, improve bus travel times with bus lanes and roll out more premium bus services to provide people with more choices. There are people who used to drive to work from HDB estates as well as from condominiums who have switched to taking public transport. With greater efforts being channelled into making public transport a more attractive choice, I am optimistic that it will be able to cater to more commuters, including drivers, in the years ahead.

LHZB: Congestion in the city is mainly due to the various MRT and road construction work, and not caused by motorists who do not have to go through it. Why penalise motorists for that?

Minister: This view is not supported by the facts. When LTA makes an assessment on whether to put an ERP gantry or to adjust the ERP rates, it takes into account the impact of any MRT or road construction works on traffic flow. Moreover, it is LTA’s practice to minimise the impact of any such works on traffic flow. For example, lane by lane replacement is provided wherever possible. In the case of Cross Street, LTA even constructed a temporary viaduct to ensure that capacity is not reduced with the construction activities. However, the key point remains, that every road has a finite capacity. If traffic demand exceeds this, unless it is regulated, congestion will build up and everyone using the road will be stuck in a jam. It is in such instances that ERP is effected.

LHZB: Commuters are worried about the overcrowded problem on trains and buses with more motorists making the switch to public transport. On the other hand, motorists are upset with the increasing ERP. Hence in the end, both sides are unhappy. Is our public transport system ready to take in more commuters? How do we strike a balance between meeting the expectations and needs of both commuters and motorists?

Minister: We were aware of this when we did the Review. So what we needed to do was to deal with two aspects of this problem: One, is like you said, if we start all these measures, people will decant into the public transport system and so it would make it even more crowded. And so what we did right at the beginning was to increase and ramp up the public transport capacity.

So even before we announce it, we talked to the public transport operators to say that we need to do this. From the January announcement to June, passenger train trips have gone up by an additional 18,000 trips a day. For buses, close to 6,000 passenger bus trips a day. Now compare these against the estimated displacement of 8,200 passenger car trips a day due to the ERP changes in April and July. The additional capacity is more than adequate to address the concern that the trains and buses will get more crowded because of the ERP changes.

Then the other aspect of the problem was that for the motorists, besides making sure that the capacity is there, we wanted to raise the overall quality of the service. So that is the reason why we brought down basic bus frequencies during peak periods from 15 to 12 minutes this year, and later to 10 minutes. And to improve bus speeds, we put in more bus lanes as well.

And I think it is also worth emphasising that we take a holistic approach in dealing with congestion. So it was not just trying to enhance our ERP system. Besides these public transport improvements, we are spending about $14 billion on road building, with new expressways like the North-South Expressway, Marina Coastal Expressway,and Kallang-Paya Lebar Expressway which will be opened later this year. And we are widening roads, like the CTE.

LHZB: But those are long-term benefits.

Minister: Yes, some of them are long-term benefits.

LHZB: So how do you ensure that in the short term, you are trying to meet more motorists’ needs? And you have to make the public transport – the bus, the rail – be conducive enough for them.

Either the frequency be faster or not so overcrowded?

Minister: So that is what we are doing. If you talk about overcrowding, the capacity is already in. So part of it is exactly like what you said - there are certain immediate measures such as increased capacity.

LHZB: But is it sufficient?

Minister: Well, you have to see the numbers. The number for passenger-car displacement is about 8,200. You must remember, when we try to displace, we don’t displace everybody. You just want to displace at the margin, about 5 per cent to 10 per cent of motorists. That is enough to bring speeds up. So it is about 8,200 against 18,000 for trains and 6,000 for buses.

And on top of it, we try to provide choices. The premium bus service is an example. We started with 42 in January and there are now 75 such services. For some motorists, they find that it’s actually a good alternative.

LHZB: What if motorists were insensitive to the revised ERP structure?

Minister: Our target is basically that it is sufficient if we can shift at the margin by about 5 to10 per cent of motorists. So I think that it would have an effect.

For example, when we put in the ERP gantry at the CTE before the turn-off to the PIE last year, the traffic volume at its slowest hour between 6 and 7 pm dropped by about 10 per cent but the speed went up by 50 per cent.

The aim is not to say, not to use cars at all. That is sub-optimal. The aim is simply that whenever you are considering a trip, you think about whether you want to use a car or public transport, based on your circumstances. And you make an informed decision because you have to factor in the externality of your driving during congested hours. That is the key thing. ERP is just the externality - the inconvenience you cause to others, I price that in so you consider the impact on your fellow motorists. And if you think you don’t want to do it, that is fine. It is your choice.

Taxis

LHZB: What can we learn from the CBD Taxi-stand incident?

Minister: I think the measure was well-intentioned by LTA. It was to deal with concerns about safety in the CBD.

As I said earlier, when you have decided on what is the right policy to do, you need also consider how best to implement it. I think that is where we fell short and I think there is room to improve here.

However, it is to LTA’s credit that when the implementation problems surfaced, they responded quickly. Within two weeks, they responded and adjusted it as the feedback was reasonable. I think that is the way to do it rather than for them to dig in their heels.

Going forward, this is a lesson that they have taken to heart. So in rolling out policies, it is important to have effective engagement of the people who are affected.

LHZB: The expansion of the ERP and full-day bus lane schemes is putting the taxi drivers in a disadvantage position. Is there a concern that cabbies may be marginalised in this whole exercise of promoting public transport? How can we better address cabbies’ concerns?

Minister: The system that we have is that of a multi-modal transport system. Yes, there are certain priorities. We say public transport is very important, but the land transport system must be multi-modal. So it goes all the way from public transport, private cars, taxis to a person who walks to get to his destination. Walking is also a form of getting from point A to Point B. So if you look at what we have done, we have also sought to facilitate walking such as ensuring that close to 80 to 90 per cent of our overhead bridges are covered to shelter people from the weather. So, our land transport system is a multi-modal system.

Taxis definitely have a role to play in this multi-modal system. They help to bridge the gap between public transport and private cars. The industry itself has been de-regulated so the role of LTA here is really to facilitate the working of the market, to see how best to ensure that it is effective.

Where we can help, we have done so. In terms of taxes, the taxi companies pay a diesel tax of about $5,100. If you look in terms of the private vehicle equivalent, it would be in the order of $6,150. If you take road tax before the latest 15 per cent tax reduction, they pay $1,200. The equivalent for the same capacity car would be about $2,800. So there is a discount there. And these measures, I think, would have been factored in by the taxi operators when it comes to setting the rentals that the taxi drivers pay.

A good example is the recent 15 per cent road tax reduction. Many of the taxi companies, when we discussed it with them, said they would pass it on in some way to their taxi drivers.

LHZB: But there have been comments from cabbies who said in this whole exercise of promoting public transport, the push and pull factors, the ERP - these are actually putting them in a disadvantaged position. So in this whole exercise, what is the role of taxis here then?

Minister: No, as I said, they are part of the multi-modal system. They help to bridge the gap between the private car and the public transport, so they do have a role to play.