HCM City needs many more parking lots

With the increasing number of cars, the demand for parking space in the city center is also on the rise, causing great pressure for the city’s infrastructure. Building underground parking is a very urgent matter, but many projects are stuck.

According to the municipal Department of Transport, from the city’s headquarters within a radius of 500m, there are about 60 high-rise buildings with 1-5 basements for parking, totaling ​​about 265,000m2, which is sufficient for parking spaces required for vehicles in these buildings and for another 1,300 cars and 2,700 motorbikes.

According to the city’s development planning approved in 2012, the center area of 930 hectares will have about 10 underground parking lots.

So far, many underground parking projects have been cancelled. At present, there are four underground parking projects located at the Trong Dong Theatre, Le Van Tam Park, Tao Dan Park, and Hoa Lu Stadium. However, these projects are still on paper.

For example, the project at Trong Dong Theatre was licenced to Indochina Group Co., Ltd. in 2008. The project has a total investment of nearly VND900 billion, with 10 floors, including seven underground floors, which can accommodate more than 700 cars and 400 motorbikes.

During the implementation process, due to many problems related to site clearance, this project was adjusted and has remained "immovable".

Some 2km away is the parking project at Le Van Tam Park with a total investment of more than VND 1,700 billion. It has a total area of ​​​​11,000m2, with four underground floors, enough for 2,000 motorbikes, and 1,300 cars.

The project broke ground in 2010 but then fell into stagnation, in August 2019, the HCM City People's Committee terminated the contract and withdrew the project.

Similarly, two parking projects at Hoa Lu Stadium (5 basements with a capacity of 1,500 cars, 500 motorbikes) and Tao Dan Park (3 basements for 600 cars and 3,000 motorbikes) are also proposed for termination for BOO (build - own - business) investment mode. The city authorities have assigned the HCM City transport project management board to prepare a feasibility study report to find investors.

Why have underground parking projects fail?

Dr. Vu Anh Tuan - Director of the Vietnam-Germany Transport Research Center of the Vietnam-Germany University - pointed out three main reasons why underground parking projects could not be implemented, including: pricing policy, the business model negotiation between the investors and HCM City authorities and the risk of user demand.

He said that investment in an underground parking lot is about three times higher than a regular parking lot. Meanwhile, the current parking fees are managed by authorities, which are too low to ensure that investors can recover their capital, not to make a profit.

According to the city’s regulations, the parking fee for motorbikes in the city center (districts 1, 3, 4, 5), is VND4,000-6,000 during the day and VND6,000-9,000 at night.

For cars with under nine seats and with a tonnage of less than 1.5 tons, the parking fee for the first two hours is VND 35,000/car. Each subsequent hour the fee will be VND20,000/hour. In the remaining districts, the fee is VND35,000/car/4 hours.

Experts believe that the current parking fees do not encourage investment in parking projects. Investors have to seek to build commercial spaces besides the parking space to offset the large investment costs.

Experts say that Ho Chi Minh City needs to re-evaluate the underground parking projects in the past to find solutions to deal with them.

To attract investment in underground parking projects, it is necessary to solve three problems related to parking fees and the rate of commercial space.

In the long run, the Ho Chi Minh City transport sector must take many solutions, and implement a public transport network and control of personal vehicles.

Tuan Kiet