Singapore to roll out satellite-based ERP system in 2027

Singapore will fully transition to a new satellite-based Electronic Road Pricing system from 1 January 2027, requiring all locally registered vehicles on the road to be fitted with an on-board unit. The move marks the retirement of the existing gantry-based ERP system, which has been in use for more than two decades.

Speaking during the debate on the Land Transport and Related Matters Bill on 3 February, Acting Transport Minister Jeffrey Siow said the new ERP 2 system relies on satellite technology to determine a vehicle’s location for toll charging. As a result, an on-board unit is mandatory for vehicles that use public roads. He told Parliament that the new system would allow charges to be applied more precisely, improving how congestion is managed across the island.

Singapore currently has 95 ERP gantries, with only 22 in active operation. These physical structures will be decommissioned once ERP 2 is fully rolled out. Mr Siow said the satellite-based approach eliminates the need to install large, costly gantries, giving authorities greater flexibility. “We can also spread out ERP charges in smaller amounts across several locations, rather than at one location. This will be fairer,” he said.

He added that the Government would remain cautious about introducing new charging points, stressing that they would only be deployed when there is persistent congestion. The aim, he said, is to ensure that the experience under ERP 2 remains as close as possible to the current system during the initial transition.

Installation progress, costs and exemptions

The Land Transport Authority said it is on track to complete the nationwide installation exercise by 2026. Around 930,000 vehicles, representing about 93 per cent of all registered vehicles in Singapore, have already been fitted with an on-board unit.

Vehicle owners who have yet to install the device will receive a final reminder from the authority on 15 February 2026. They will then have a three-month window to complete the installation at no cost. After that period, charges will apply, with installation costing US$35 for motorcycles and US$70 for all other vehicles.

Certain vehicles will be exempt from the requirement. These include construction equipment such as tractors, as well as vehicles operating under the Restricted Use Scheme, including those used at airports and ports. Classic and vintage vehicles are also exempt, although owners may choose to install an on-board unit if a workshop confirms that it is technically feasible.

From 1 January 2027, classic or vintage vehicles without an on-board unit will be required to pay a flat daily fee on days when ERP is in operation. The rate will be US$3 for motorcycles and US$10 for other vehicles. Owners of foreign-registered vehicles will also have the option to install an on-board unit, with those opting out required to pay a daily flat-rate ERP charge instead. Malaysian taxis, however, will need to install the unit for tracking and enforcement purposes.

Payment rules, enforcement and tougher penalties

The Bill also introduces changes to how missed ERP payments are handled. Under the proposed framework, non-payment will be decriminalised and treated as an administrative issue rather than a traffic offence. Currently, unpaid charges can lead to court prosecution if they remain unsettled.

Under the new approach, motorists who fail to pay within 5 days of receiving an SMS notification from the Land Transport Authority will be blocked from conducting transactions with the agency. This includes services such as renewing road tax or transferring vehicle ownership. Access will be restored only after the outstanding charge and a US$10 administrative fee are paid.

The legislation also strengthens enforcement against illegal vehicle modifications and the use of unregistered or deregistered vehicles. Mr Siow said more than 1,000 cases of unlawful modifications are detected each year, prompting the need for tougher penalties to deter large-scale violations by workshops.

Individuals convicted of illegal vehicle modification could face fines of up to US$20,000, jail terms of up to two years, or both, with repeat offenders subject to doubled penalties. Workshops could be fined up to US$40,000 for a first offence and up to US$80,000 for subsequent violations. This represents a sharp increase from the current maximum fine of US$5,000 and a jail term of up to three months.

Penalties for keeping or using unregistered or deregistered vehicles will also be raised. First-time offenders could face fines of up to US$20,000 and up to two years in prison, double the existing penalties. Mr Siow said the stricter measures are needed due to a growing number of such vehicles on the roads, some of which are linked to crimes such as drug trafficking. He added that these vehicles pose serious safety risks as they lack valid insurance and regular inspections, and are often involved in hit-and-run accidents. Detection figures rose from 40 cases in 2022 to 245 cases in 2025.