Since the inception of the ERP (Electronic Road Pricing) in September 1998, Singaporeans have always been complaining about the toll system, and especially shifty with regards to the constant increment in the amount taxed.
The ERP system, although understandably unpopular among most road users, has helped to improve the problem of traffic congestions since its implementation. The LTA reported that road traffic decreased by nearly 25,000 vehicles during peak hours, with average road speeds increasing by about 20%.
This price hike comes after the completion of KPE ( kallang – Paya Lebar Expressway) . Personally i feel that it is ironic for the government to increase the price at this time as in the economics point of view, the application of the mechanism reveals to us that an introduction of taxes is used to reduce externalities to market efficiency level such as solving the problem of traffic congestion by discouraging use of the roads at peak hours. With the availability of an alternative route as provided by KPE, traffic congestion should be reduced throughout the day. In fact, tax rates should be going down!
It is not easy to understand why the government is still increasing the tax with the avaiilability of KPE, maybe its to cover cost for building of KPE? I hope that price of driving through those gantries will be lowered as KPE fully opens in late 2008.
