ERP 2.0: Distance-based pricing still under study
Even though the next-generation Electronic Road Pricing (ERP) system is capable of distance-based road pricing, the authorities are still at a very early stage of looking at different possible distance-based charging models, said Transport Minister Chee Hong Tat.
As it is a major policy that can affect livelihoods and different groups of road users, it is “correct for us to be prudent and to be careful before we introduce any changes”, Mr Chee told reporters on Dec 3.
The current focus is to ensure a smooth process of getting all vehicles in Singapore fitted with the on-board unit (OBU), which is part of the new satellite-based ERP system, known as ERP 2.0.
By the end of 2024, 200,000 vehicles – or about 20 per cent of the vehicle population – are expected to be fitted with the OBU, which replaces the in-vehicle unit for the payment of road tolls and parking charges.
Speaking in an interview to round up 2024 at his ministry’s office in Alexandra Road, Mr Chee also acknowledged that while the technology behind ERP 2.0 is not the latest, it is a tried-and-tested and secure system that can last for a while.
He was responding to questions from the media on the expected lifespan of ERP 2.0 technology and the features of the system.
The installation of OBUs in nearly one million vehicles is expected to be completed by end-2025.
Mr Chee said ERP 3.0 may be a possibility “in time to come” if the authorities find new technology that can work effectively after undergoing rigorous tests.
But he does not expect this to happen in 2026. “(That year) will probably still be (ERP) 2.0, but it already allows us to have all those features that we want – to be able to set up virtual gantries, to be able to do more responsive traffic management, to be able to introduce new usage-based charging, for example, distance-based charging if you want to,” he said.
Mr Chee said the concept of virtual gantries will be the same as existing physical gantries, with charging based on time and location.
Under the current ERP system, physical gantries are positioned in congestion-prone locations. Motorists pay a fee when they drive through gantries that are in operation.
Elaborating on the distance-based charging concept, Mr Chee said it may not be as simple as paying more for driving more, adding: “If that is what we need, actually, you can just do that with the odometer.”
An odometer is an instrument in a vehicle that measures and displays the distance travelled.
Instead, distance-based charging is linked to congestion management, taking into account the location and time of travel.
“A kilometre that you travel off-peak in a less busy part of town is different from a kilometre travelled during peak hours on a busy stretch in terms of the impact you add to congestion,” he said.
The minister added that there are studies that can be done on distance-based charging, and while ERP 2.0 allows the option, “it doesn’t mean that you necessarily then activate that option immediately”.
“You need to study what is the policy design that will lead to a fair outcome for the different groups of users. That’s the one that takes time.”
The roll-out of ERP 2.0 was originally meant to begin in 2020, but it was postponed twice, first due to the Covid-19 pandemic, then the global chip shortage that followed.
Mass installation of the OBU for vehicles started in November 2023 with existing fleet vehicles such as company-registered vehicles. Since May 2024, new vehicles have been fitted with OBUs before they are delivered to their owners.
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