Debated in Parliament on 4 Jan 2021.
Mr Sitoh Yih Pin asked the Minister for Transport (a) whether there are plans to re-evaluate the motorcycle COE regime to address the high COE prices in view of the fact that a significant number of motorcycle owners use their vehicles for purposes of their livelihoods; (b) what is the rationale for the low bid deposit for motorcycle COEs of S$200; and (c) whether this will lead to market speculation of motorcycle COEs.
The quota premium is dependent on supply and demand for Certificates of Entitlement (COEs). As the Vehicle Growth Rate for motorcycles has been 0% per annum since 2018, the supply of Category D COEs depends on the number of motorcycles deregistered in the preceding months. Based on the current distribution rule, the COEs from deregistration in a particular month are recycled for bidding over the next quarter.
For the last six months, bidding was disrupted from April to June 2020 due to COVID-19. To even out the supply of COEs, LTA therefore made an adjustment to the distribution rule, by returning one-third of the COEs accumulated to the bidding exercises from July to September 2020, and distributing the rest from October 2020 to June 2021.
Over the last six bidding exercises, Category D COE Quota Premiums (QPs) have held quite steady at around $7,250 to $7,700, although higher than pre-COVID-19 levels. For the temporary COEs secured in July 2020, which have a six-month validity, close to 90% have already been used to register a motorcycle as of 1 December 2020, which suggests that these are genuine demand and not speculative or manipulative bidding.
We are mindful that many lower income Singaporeans require a motorcycle to go about their work. That is why the bid deposit is set lower at $200 for Category D COEs. If we raise the $200 bid deposit, this will raise costs for dealers, which may mean higher prices for buyers. Motorcycles are also subject to much lower Additional Registration Fees, road tax and Electronic Road Pricing charges compared to cars.
PAPERCUTS