Written Answer by Ministry of National Development on increasing charges for HDB and URA car parks
Aug 15, 2016
Mr Lim Biow Chuan: To ask the Minister for National Development what is the basis for deciding to increase the car park charges for HDB and URA car parks.
Answer:
Our key principle is that car owners should bear the full cost of ownership and usage of cars. This includes the cost of parking cars. Hence parking charges in our HDB estates are sized to cover the cost of building, operating and maintaining residential car parks. It would not be equitable for the government to subsidise the cost of parking, as this would mean that non-car owners are subsidising car owners. Today, about 3 in 10 HDB households own cars, i.e. the majority of our residents do not own cars[1].
While car park 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 car parks have increased even more, by a total of about 40%.
The main increase in cost is due to:
a) Rising overheads in the construction industry;
b) More capital expenditures in new and existing HDB carparks, such as lifts and roof-shelters at multi-storey carparks; and
c) Additional repair works required to maintain an increasing number of ageing carparks.
Therefore, while HDB has largely been able to achieve cost recovery for its residential car parks in the past, this will not be the case going forward. From 2002 to 2015, HDB managed an average annual surplus of 4% of its average income (or $19m) in its car park activity. But the fiscal position is worsening sharply. Without the revisions to car park charges, HDB expects to incur a deficit of 13% of average income, or $80m this year. From next year till at least 2020, a deficit of around $100m is projected every year. In fact, HDB expects to continue running a small deficit in the coming years, even with this latest increase in fees.
Most of URA’s carparks are in the city centre and the parking charges are set higher than HDB carparks in order to appropriately manage parking demand. Despite this, without the fee revision, URA also expects to incur a deficit in its carpark activity in the coming years. Hence from a cost recovery point of view, adjustments have to be made to both HDB and URA car park charges.
In reviewing the parking rates, we have also differentiated the HDB season parking charges such that residents pay a lower season parking rate for their first car. Season parking rates for subsequent cars, or non-residents who use HDB carparks, are set at a higher charge to reflect the full cost recovery rate. While the revised parking charges will result in higher costs for car owners, it is necessary to do so to cover the costs of building, operating and maintaining car parks. It is only fair for car owners to cover these costs, because the alternative is for non-car owners to subsidise car owners. Right-pricing our parking rates is also in line with our aim to be a more “car-lite” society.
[1] Based on HDB Sample Household Survey 2013, 32.8% of HDB households own cars.