Written Answer by Ministry of National Development on financial deficit resulting from operation of HDB car parks
Sep 13, 2016
Assoc Prof Daniel Goh Pei Siong: To ask the Minister for National Development
(a) what are the reasons and projected cost breakdown for the sharp worsening of the fiscal position from a $19 million surplus to a $80 million deficit this year and a $100 million deficit next year in the operation of HDB car parks;
(b) what is the estimated cost savings in outsourcing the operation of Electronic Parking System residential car parks to commercial operators;
(c) what is the current percentage utilisation of HDB car park spaces; and
(d) whether further cost savings can be achieved through a recalibration of the number of car park spaces to match utilisation rates.
Answer:
While carpark charges have remained constant for the last 14 years, costs have increased over this same period. Since 2002, core-inflation has risen by about 30%. The total costs of building, operating and maintaining HDB residential carparks have increased even more, by a total of about 40%.
These costs have gone up, even with the implementation of the Electronic Parking System (EPS). With automation provided by EPS, HDB is able to save about 25% mainly on daily operating costs such as enforcement, attending to feedback and enquiries, as well as collection of parking charges. But the bulk of the cost of residential carparks comes from building and maintenance works. Hence, the savings from EPS are not sufficient to outweigh the other cost increases due to:
(a) Rising costs to construct new carparks;
(b) Cyclical improvements, as well as additional repair & redecoration (R&R) works required to maintain an increasing number of ageing carparks; and
(c) More capital expenditures in new and existing HDB carparks, such as installation of lifts and roof-shelters at multi-storey carparks and their maintenance costs.
This is why there is a worsening of the fiscal position. If we had not made revisions to carpark charges, HDB would incur an $80m deficit this year, and an estimated $100m deficit from next year till at least 2020. Even with the latest increase in fees, HDB expects to continue running a deficit in the coming years.
Currently, HDB carparks are generally well-utilised. The season parking take-up rates do vary from location to location, but on average, it is above 70% across all the HDB carparks island-wide. From experience, this is manageable take-up rate, with the remaining capacity made available for visitor parking.
HDB periodically reviews parking provision to ensure that it remains relevant to meet residents’ parking needs. There will not be much cost savings by reducing parking spaces in existing carparks, as the cost of constructing them has already been expended, i.e. sunk cost. However, where feasible and appropriate, HDB has in the past converted carpark lots to other uses, such as social communal facilities.