The Dutch To Implement Pay-As-You-Drive Scheme

In an effort to combat peak hour traffic and reduce pollution, Netherlands has decided to put in place a pay-as-you-drive scheme that charges drivers a fee for every kilometre travelled. Using the GPS tracking system, which all vehicles will be mandatorily fitted with, the total distance driven by each vehicle will be recorded by an agency in charge of billing. Scheduled for implementation in 2012, the fee will vary depending on the type, weight and carbon dioxide emission level of the vehicle. Driving through a congested road during peak hours will cost more.

For a typical sedan, a kilometre would cost around 3 euro cents (15 ringgit cents). As a compensation, the annual road tax and the present car purchase tax—which makes up 25 percent of the current price tag—will be abolished. The Dutch Government estimates that 60 percent of the drivers will benefit from this scheme, with frequent drivers paying more tax. Overall tax revenues are estimated to remain the same.

This pay-as-you-drive scheme is projected to reduce peak traffic levels by 15 percent, carbon dioxide emissions by 10 percent, and the number of accidents by 7 percent.

By comparison, Singapore has the ERP system, London has the congestion charge, and many countries have in place their own systems to keep the cars moving. Malaysia has none of these, probably because the jams are still manageable. But if the situation does escalate, it is good to know that there are so many different systems to choose from.