Capital parking in a tight street

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VietStock FI English - 33 month(s) ago 3 readings

Hanoi’s plan to build spacious parking areas is on the back foot.

In light of Hanoi’s parking place planning towards 2020 which was ratified in late 2003, the city would set aside 703 hectares by 2020 for developing 34 parking lots in its seven inner districts to supersede existing pavement-based parking spots from 2004-2010.

However, most planned areas for underground parking like the areas in Le Nin and Thu Le parks, Hang Dau and Chi Linh (Indira Gandi) flower gardens and a vast empty space nearby Van Mieu-Quoc Tu Giam still await investors, while plans on building multi-floor parking areas still sit on the drawing board though land is available at Long Bien and Luong Yen water plant parking areas.

After nine years, a number of land funds catered to parking lots have had their usage functions changed to turn into services and trading centres, office-for-lease buildings and even state agency offices.

Hanoi Department of Transport deputy director Nguyen Hoang Linh said capital sources were vital in implementing the 34 planned parking lots. However, few investors had jumped onboard due to projects’ low investment efficiency. In some cases, some planned parking areas were later used for more urgent projects.

Head of Hanoi Parking Company’s project management board Nguyen Van Duc said a lack of clear land was the largest hindrance to building parking lots.

Besides, huge investment costs against a long capital recouping process kept investors away from pouring money into parking facilities.

Estimates show that to have a 1ha parking place in the suburbs firms must spend around VND45 billion ($2.1 million) in site clearance and infrastructure investment, while it would take 25 years for them to recover the outlay.

“Without proper incentives on lending, taxes and allowing firms to set service prices parking projects can hardly appeal to investors,” said Duc.

Besides, current state policies and mechanisms in this field remain vague.

Ministry of Construction’s Technical Infrastructure Department head Nguyen Hong Tien said some investors had filled in procedures to build underground parking areas. They, however, later left due to inconsistent procedures.

Architect Le Cong Sy, from Vietnam Architects’ Association, said cumbersome administrative procedures have scared investors away since firms mostly used bank loans to invest. In fact, due to the lack of guiding documents it could take investors almost two years to get a parking project rolling, thus exaggerating investment costs.

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