Singapore: The world’s first digital congestion charging system

Road Pricing is one way to manage traffic growth. In Singapore the system was first implemented in 1975 in the form of an Area license System (ALS) that charged drivers a flat rate for unlimited entries into Singapore's central area. The ALS system led to an almost immediate 45% reduction in traffic and a 25% decline in vehicle crashes. Average travel speeds increased from 11 mph to 21 mph. Initially there was an exempt for carpools, taxis, motorcycles, buses and commercial vehicles, which were license free. In 1990, they extended the Area Licensing System from covering only Singapore’s business centre to also including expressways leading into the city.

The ALS was successful in reducing congestion, but had a high need of manpower i.e. to man the tollbooths. Also it had limitations in varying road pricing charges and it was inconvenient for the motorists waiting in line to pay to get through the tollgates. All this prompted a move to electronic toll collection in the form of Electronic Road Pricing (ERP).

In 1998, Singapore replaced the system with the Electronic Road Pricing (ERP) program, which uses modern technology. At the start of the journey a Cash Card is inserted into the On-Board Unit (OBU), which is fixed permanently in the vehicle and powered by the vehicle battery. When passing an ERP gantry the cash balance after the ERP charge deduction is shown on the OBU for 10 seconds. The electronic system has the ability to vary the prices based on traffic conditions and by vehicle type, time and location. Today all vehicles are charged, only emergency vehicles are exempted. In 2005 the coverage of ERP expanded the gantries around Singapore central business district and on major arterials and expressways. To ensure optimal use of road space and to maintain optimal speeds, the system is revised quarterly.

After replacing the ALS with the ERP system, traffic levels have decreased a further 15 percent. In addition, 65% of commuters now use public transport, an increase of nearly 20%. Reduced traffic in the charging zone led to a 176,400 pound reduction in CO2 emissions and a 22 pound reduction in particulate matter (soot). The system has curbed traffic demand and managed road space for highest productive capacity, cutting congestion, pollution, emissions, and fuel use.

The implementation of the ERP system has amounted to approximately 125 million USD and the annual revenue from the program is  approximately 50 million USD. This creates a net profits per year surmounting 40 million USD and thus the ERP system has already paid for itself. The revenue from the system is among other things used for construction and maintenance of roads and public transportation.