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Underground parking lots in HCM City remain on paper for decade

HCM City planned to build four underground parking lots in the downtown area to meet its enormous demand for parking vehicles, but a decade on, parking lot projects remained on paper as none is likely to be built.
Trong Dong underground parking lot in HCM City remains on paper for decade.

One day at the beginning of May 2022, 45-year-old Nguyen Ngoc Nhu living on Le Van Tho Street in Go Vap District needed to meet a business partner at the center of District 1. He arrived 30-45 minutes earlier than the appointment time to find a place to park the car. At the intersection of Nguyen Du - Pasteur, notice boards said that the parking spaces were full while some places refused parking and other venues didn’t allow parking in front of them. After struggling for more than 80 minutes to find a parking lot, Nhu could meet the partner.

Nhu explained to the partner why he was late for the meeting adding that that was not the first time he has struggled to find a parking space. One day, he had a meeting with a partner at Nguyen Thi Minh Khai Street in District 1, but because there was no parking space, he had to go to the basement of a building in District 3, then took a motorbike taxi to the meeting place.

In the past time, realizing the crying need for car parking lot in the city center, the Ho Chi Minh City authorities have planned four underground parking lots in District 1 in combination with commercial and public services. One of them was a VND900-billion lot at the Trong Dong Theater, formerly known as the Lam Son parking tunnel and commercial service project, which was granted a certificate by the municipal People's Committee to Indochina Group Company in 2008. 

However, because the initial construction site affected the City Theater and metro lines, two years later, the project location was changed to Trong Dong Theater, more than one kilometer away. The VND900 billion project will be built on an area of more than 5,300 square meters including seven underground floors and three elevated floors, accommodating more than 700 cars and 400 motorbikes. In addition to the construction of the parking lot combining commerce and services, the enterprise was also assigned to rebuild Trong Dong Theaters for the management unit.

Nevertheless, during the implementation process, the project encountered some difficulties and bottlenecks so it was delayed for a long time. At the end of 2018, the project was among 180 projects that were delayed in implementation and were proposed to be withdrawn by the Department of Natural Resources and Environment. By July 2019, the city agreed to allow Indochina Group Company to continue implementing the project with the condition that the enterprise must commit to construction on schedule in 2020 and completion by the end of 2022. However, the deadline has passed but there has been zero progress so far.

 A VND1,700 billion parking lot beneath Le Van Tam Park was scrapped after more than a 10-year delay. The parking lot was invested by the Underground Space Company (IUS) in the form of a build-operate - transfer contract. 

It was meant to accommodate 2,000 motorbikes and nearly 1,300 cars an area of 11,000 square meters

The project was broken ground in 2010 but then faced hiccups along the way. In 2012, the investor completed the basic design, then asked for an adjustment. It was only completed in March 2017 and signed as an appendix to the contract. The investor committed by the end of 2017 to deploy and construct the project but did not implement it. In August 2019, the People's Committee of Ho Chi Minh City terminated the contract and revoked the project.

The underground parking projects at Tao Dan Park and Hoa Lu Stadium suffered the same fate when the construction work also couldn’t be implemented. Tao Dan Park's underground parking lot has a total investment of VND1,055 billion, including one ground floor and four underground floors to park nearly 1,200 cars and 900 motorbikes. The project at Hoa Lu Stadium costs VND3.4 trillion to have five underground levels to accommodate 2,500 cars and 2,873 motorbikes. Currently, two projects are proposed to terminate investment in the form of build-own-operate (BOO).

There are many difficulties in calling for investment to build a parking lot in the center of HCM City. Moreover, despite the large cost, the pricing policy, and the business model agreement between the investor and the city government have not been taken into account. This is the reason why the investor once started the construction project of a parking lot in Le Van Tam Park, but then had to accept to leave it unfinished and until now the project has been officially canceled. 

Construction of underground parking lots costs many times more than conventional parking ones. Therefore, investors have to calculate and take advantage of the space to build commercial services next to the parking space to offset costs. The commercial rate is too low, the efficiency is poor whereas the commercial rate is too high, which affects the goal of building a public parking lot, said Dr. Vu Anh Tuan, Director of the Viet Duc Transport Research Center.

According to statistics of the Department of Construction, within a radius of 500m around the headquarters of the People's Committee of Ho Chi Minh City, 59 high-rise buildings such as Kumho Asiana Plaza building, Eden complex, Saigon Center building have 1-5 basements for parking. In addition, nearly 50 high-rise buildings with parking basements of smaller capacities on Nguyen Hue, Dong Khoi, Hai Ba Trung streets. It is estimated that in addition to the capacity to meet parking spaces in buildings, only about 20 percent of the area is for more than 1,300 cars and nearly 2,800 motorbikes to park outside the buildings. Worse, the price of hourly car parking at these places is quite high.

Nearly 10 years ago, in anticipation of the lack of parking spaces in the city center, Saigon Transport Mechanics Corporation put into operation a high-rise parking garage at Vo Van Kiet Street in District 1 from the fifth to the ninth floor with one floor having 90-95 parking spaces. In addition, the company built a high-rise parking lot at Che Lan Vien Street in Tan Phu District with accommodation of 1,400 cars and 1,400 motorbikes.

At these parking lots, the price of car parking is up to several million Vietnam dong per month. Recently, many people have come to park their cars at these two parking lots. However, the underground parking projects at Drum Dong stage, Le Van Tam Park, and Tao Dan Park are sluggish. 

Explaining the delay of the underground parking project at the Trong Dong Theater, Ms. Nguyen Thi Bao Quynh, Vice President of Indochina Group Company said that the enterprise has invested a lot of money and effort into the parking project. The investor had to invest a lot of effort and time to carry out the procedure because the underground car tunnel project had no precedent. By the time the design agreement was completed with the Ministry of Construction, the project was entangled with metro line 2 and had to be redesigned.

According to Ms. Bao Quynh, during the 12 years of implementing the project, the investor has continuously encountered difficulties in legal procedures and has fully reported to the People's Committee of HCM City and relevant departments and agencies.

For example, recently the project was asked to change the function from commerce to the public on the upper floor. If the function of the upper floor is ought to change like that, then investors’ capital recovery is more difficult and must be recalculated not to mention, no official document asking investors to change the function of the upper floor. Because the investor has to wait for the procedure for too long and was asked to change the design constantly generating unexpected costs for the project.

Regarding some underground parking projects in District 1 have gradually been sluggish, a representative of the Department of Transport said, many investors supposed that the investment cost of underground parking is very large whereas the return of that initial investment is slow, so they are not interested in pouring money into the construction of parking lots.

The planning of underground parking lots is already in the general plan of the city in an area of 930ha. Of the four underground parking projects mentioned above, only the project at the Trong Dong Theater is adjusted the detailed planning for implementation. Currently, the Department of Transport is coordinating with the Department of Planning and Architecture to review and complete this adjustment.

Regarding car parking, the Department of Transport has just sent an official dispatch to the relevant units requesting to add 31 additional routes to collect temporary use of part of the roadway for parking. Currently, the city is collecting parking fees on 20 routes including 12 routes in District 1, three routes in District 5, and 5 routes in District 10. Revenue from parking fees is stable and increasing gradually. 

Specifically, in December 2021 and January 2022, the city collected nearly VND400 million a month. On that basis, the Department of Transport will collect opinions from a number of districts to report to the People's Committee of HCM City for consideration and approval of promulgating a list of expanding the scope of implementing fee collection to cars parking along streets, in order to ensure revenue enough to cover expenses.

According to the Department of Transport’s data, by the end of the first quarter of 2022, the city is managing more than 9 million vehicles including 900,000 cars.

Source: Sai Gon Giai Phong


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