Ministry of Transport An alternative to the COE system
I want to give my views about how to replace the COE system.

Some people criticized the COE system because it is unfair and favors the rich. I do not agree with this criticism. It is unavoidable that scarce resources will always favor the rich. We all want to live in GCB (good class bungalows), but only the rich can afford GCB.

My criticism of the COE system is that the prices are volatile (resulting in large fluctuations) and the system allows certain parties, e.g. car dealers, to corner the auction and make a profit at the expense of the end consumers.

We still need a system to restrict COE permits, so that the number of vehicles is under control.

I prefer that the COE price be set by the authority. If there are more people applying for the COE compared to the available quota, the COE should be distributed by ballots.

The COE price will have to adjust according to demand. But the prices will be more stable, although it must reflect the market demand.

More importantly, my proposed system is fairer, and will not allow the middle men to exploit the system to make a speculative profit.

This system allows some owners to take a speculative position. They will apply for the COE and hope to win the ballot. They can then sell the COE to make a gain.

This speculation could be handled by imposition an appropriate transfer fee within one year of issue.

My suggestion recognizes the need to control the vehicle population by limiting the permits, but sets a price that is more stable (but still reflect market demand) and is fairer to the end users.

Tan Kin Lian
 

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