SINGAPORE, Feb 3 — Foreign-registered vehicles, including those entering from Malaysia, will be able to install Singapore’s new on-board unit (OBU) from April 1 at a cost of S$158.70 (RM500) before installation fees — a move introduced ahead of the nationwide shift to the ERP2 system. 

Those that choose not to install the device will have to pay a daily flat ERP rate of S$3 for motorcycles and S$10 for other vehicles from 2027, while Malaysian taxis will be required to install the unit for tracking and enforcement purposes, The Straits Times reported.

The early rollout for foreign vehicles was highlighted as Singapore prepares to make OBUs mandatory for all locally registered vehicles from January 1, 2027, when the country fully transitions to its next-generation, satellite-based road-pricing scheme.

Singapore’s Acting Transport Minister Jeffrey Siow told Parliament today that ERP2 will replace the physical gantry model with satellite location tracking, enabling more precise congestion management. 

“We can also spread out ERP charges in smaller amounts across several locations, rather than at one location. This will be fairer,” he said.

The Land Transport Authority (LTA) said that about 930,000 vehicles — 93 per cent of the national fleet — have been fitted with the new unit so far, and the installation exercise remains on track to finish in 2026.

Owners of Singapore-registered vehicles who have not installed the OBU will receive a final reminder from February 15 and a three-month window to install it for free. 

After that, installation will cost S$35 for motorcycles and S$70 for other vehicles.

Siow stressed that the Singapore government would be “judicious” in adding new charging points under ERP2, noting they will be introduced only at “persistent congestion hotspots”. 

The existing ERP1 system, with 95 gantries of which 22 are active, will be phased out.

He added that distance-based charging would not be implemented immediately. 

“Distance-based charging is something that we will continue to study and explore after motorists have gotten more used to the new system and the situation is more stable,” he said.

Certain categories — construction equipment, restricted-use airport and port vehicles, and classic or vintage cars — will be exempt from installing an OBU. 

Exempted vintage and classic vehicles will instead pay a flat daily ERP fee when on the roads from 2027.

The Bill also tightens regulations on tampering. Only authorised technicians will be allowed to install, modify or repair OBUs. Unauthorised work could draw fines of up to S$20,000, a year’s jail, or both.

Separately, missed ERP payments will be decriminalised and handled administratively. 

Motorists who fail to pay within the five-day grace period after receiving an SMS notification will be barred from selected LTA services until settling the charge and a S$10 administrative fee.

Siow said penalties for illegal vehicle modifications and for using unregistered or deregistered vehicles will be raised, citing a sharp rise in such cases. 

Detections of deregistered vehicles rose from 40 in 2022 to 245 in 2025, with some used in crimes including drug trafficking.