High COE prices seen driving small bus operators out of business

With the Certificate of Entitlement (COE) premiums for commercial vehicles reaching a new high on Wednesday, industry players say this is driving some small bus operators out of business.

And this may lead to a significant drop in the supply of school buses in the next few years.

In the latest COE bidding exercise, the premiums for commercial vehicles rose above S$71,000.

According to the Singapore School Transport Association, the COEs for some 1,000 school buses would be expiring in 2017.

That is because many school bus operators bought new fleets of vehicles or renewed their COEs when premiums plunged to as low as S$87 in 2007.

The association says if premiums continue to rise, it may be difficult for "single school bus operators" to cope, as they already face expensive oil prices and high insurance costs.

And with the Education Ministry's plans to make all primary schools single-session in 2016, this would mean the number of school buses would have to increase by 50 per cent by then -- causing a further strain on operators.

Wong Ann Lin, the chairman of the Singapore School Transport Association, thus suggests pulling school buses out of the commercial vehicles category in the COE bidding system.

SOURCE

Record high for the commercial vehicle category COE is definitely not doing any good for the business owners. Such costs will either be pushed to the consumers resulting in inflation, or the business will simply go bust, especially with small transport operators in this case. Removing the need to bid for COE is not exactly a solution either as can be seen with what was done with the taxis in Cat A.

It is a great headache for everyone.