Age Limits Among Car Ownership Limits Urged for Jakarta

Age Limits Among Car Ownership Limits Urged for Jakarta

By Hotman Siregar on 9:40 pm September 26, 2013.
A transportation analyst has urged the Jakarta authorities to impose a limit on the age of vehicles allowed on the streets, in a bid to both reduce exhaust emissions and cut back on car use. Yoga Adiwinarto, the director of the Institute for Transportation and Development Policy, said on Wednesday that the idea had long been discussed by city officials but never implemented.“Other big cities across the world have implemented such a policy,” he said, citing the example of Singapore, where higher taxes on cars older than five years are credited with keeping the number of these vehicles at a minimum.

“[In] Jakarta, it doesn’t have to be five years. 10 years would be good enough. Old cars should no longer eligible to operate in big cities,” Yoga said.

A similar policy in the United States offers car owners an incentive to scrap their old cars. In some states, they can get the equivalent of Rp 25 million ($2,180) per metric ton for getting their old cars scrapped.

In addition, the US government earns up to Rp 110 trillion annually from exporting scrap metal from such cars.

Yoga pointed to stringent car ownership rules in Japan as something else Jakarta could emulate.

“There’s no need to limit the number of cars people can own, but the government should limit their use. These days, people have cars without [even] having a garage [to park them],” he said, noting that in Japan, people were required to first own a garage before being eligible to buy a car.

Yoga’s remarks came in response to an announcement earlier this week by Jakarta Deputy Governor Basuki Tjahaja Purnama that the city administration planned to take all privately registered vehicles more than 10 years old off the streets.

“A plan is being assessed to see whether cars that are more than 10 years old should be sold to other cities or scrapped,” Basuki said on Monday.

He said the assessment was important because the need for cheap vehicles remained high in regions outside Jakarta, and especially outside the island of Java.

Basuki said the Singapore government had implemented a scrapping scheme for old cars because it had nowhere to put them.

The administration of Governor Joko Widodo has made cutting back private vehicle ownership a cornerstone of its effort to tackle the capital’s chronic traffic congestion.

The city plans to roll out an electronic road pricing scheme, among other measures, some time next year that will make it prohibitively expensive for people to drive into downtown Jakarta.

However, the administration says its efforts will be set back by the central government’s recently launched low-cost green car policy that makes cheap cars widely available.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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