Proposals to tweak motorcycle COE bidding rejected as they may lead to 'unintended consequences'

SINGAPORE – Categorise motorcycles according to their engine capacities for certificate of entitlement (COE) bidding, and use a balloting system similar to that for Build-To-Order flats for smaller motorcycles, MP Faisal Manap (Aljunied GRC) proposed in Parliament on Tuesday (Oct 5).

In the last parliamentary motion of the day, Mr Faisal said the Government needed to find ways to make motorcycles more affordable.

Motorcycle COE prices in recent months have reached historical highs – amounting to four to 10 months of riders’ salaries, he said. In 2001, it was $509. In September, it had reached $9,689.

Creating separate COE categories for the three different classes of motorcycles – instead of the now catch-all Category D – will allow more appropriate prices for each, he said.

Using a balloting system for Class 2B motorcycles, with engines not exceeding 200cc and usually used by first-time buyers or those relying on them for a living, will make this category less prone to speculative buying, Mr Faisal said.

If the current bidding system is to be kept, riders should be able to bid under their own name rather than through dealers, which could push up prices to increase their profit, he added.

“I am mindful that the ultimate goal is not to lead to an increase in the number of motorcycles on the road. Rather, my intention is to improve the well-being of our fellow Singaporeans who rely on motorcycles to make a living,” Mr Faisal said.

In response, Senior Parliamentary Secretary for Transport Baey Yam Keng said tweaking the COE system could have knock-on effects and potentially unintended consequences on buyers.

The system is functioning now, he said, pointing to the high utilisation rates of motorcycle COEs, which have averaged 99 per cent since bidding resumed in July last year, indicating the demand for COEs is genuine rather than speculative.

“While it is not a perfect solution, the system has generally worked, and COE prices fluctuate based on supply and demand,” he said. “That should be the case.”

Mr Baey said only about 440 Category D COEs are available for each bidding exercise, and splitting them into sub-categories could result in greater price volatility as each bidder would have a greater influence.

The percentage of bikes registered in each sub-category has historically also fluctuated from month to month, making it difficult for the authorities to fix quotas for each sub-category.

As for Mr Faisal’s balloting suggestion, Mr Baey said it will require the Government to set a price arbitrarily, which could affect demand and “those who truly need the motorcycle for a living and are prepared to pay a bit more”.

He also said riders are already allowed to bid in their own name under the current system, but many still choose to go through dealers as they are able to buy a bike immediately using the COEs secured by dealers, he said.

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“A removal of this option could have unintended consequences for buyers and will have to be studied carefully.”

Mr Faisal’s proposal to allow COEs for motorcycles to be renewed for two five-year terms instead of the current single five-year term was rejected by Mr Baey as it would affect the balance between existing and prospective owners, since expired COEs are recycled into the system for bidding again.

His call to extend the Preferential Additional Registration Fee rebate, given to car owners who choose to scrap their vehicles early, to motorcycle owners was also rejected by Mr Baey, who said costs for motorcycles are already kept lower than other vehicles through measures like lower road tax.

On Mr Faisal’s suggestion for allocated parking areas for delivery and dispatch riders, Mr Baey encouraged commercial building owners to set aside parking spaces for these riders with a reasonable grace period.

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