Financial Deficits in HDB Car Park Operations

Debated in Parliament on 13 Sep 2016.

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Assoc Prof Daniel Goh raised four questions about the sharp worsening of HDB car park finances, including reasons for the projected deficits, cost savings from outsourcing, current space utilisation, and potential savings from recalibrating car park numbers.
Lawrence Wong explained that while car park charges have remained unchanged for 14 years, costs have risen due to inflation, construction, maintenance, ageing infrastructure, and new amenities, leading to projected deficits of $80 million this year and $100 million next year.
The Electronic Parking System (EPS) has reduced some operating costs by about 25%, but savings are insufficient to offset overall cost increases, and HDB expects deficits to continue even after recent fee revisions.
HDB car parks are generally well-utilised, with average season parking take-up rates above 70% islandwide, and there are limited cost savings from reducing existing parking spaces due to sunk costs, though some spaces have been converted to other uses.

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Assoc Prof Daniel Goh Pei Siong

Assoc Prof Daniel Goh Pei Siong asked 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 are 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.

Summary written by AI (learn more)

Assoc Prof Daniel Goh raised four questions about the sharp worsening of HDB car park finances, including reasons for the projected deficits, cost savings from outsourcing, current space utilisation, and potential savings from recalibrating car park numbers.
Lawrence Wong explained that while car park charges have remained unchanged for 14 years, costs have risen due to inflation, construction, maintenance, ageing infrastructure, and new amenities, leading to projected deficits of $80 million this year and $100 million next year.
The Electronic Parking System (EPS) has reduced some operating costs by about 25%, but savings are insufficient to offset overall cost increases, and HDB expects deficits to continue even after recent fee revisions.
HDB car parks are generally well-utilised, with average season parking take-up rates above 70% islandwide, and there are limited cost savings from reducing existing parking spaces due to sunk costs, though some spaces have been converted to other uses.

Questions identified by AI (learn more)

Financial Deficits in HDB Car Park Operations

Debated in Parliament on 13 Sep 2016.

Summary written by AI (learn more)

Assoc Prof Daniel Goh raised four questions about the sharp worsening of HDB car park finances, including reasons for the projected deficits, cost savings from outsourcing, current space utilisation, and potential savings from recalibrating car park numbers.
Lawrence Wong explained that while car park charges have remained unchanged for 14 years, costs have risen due to inflation, construction, maintenance, ageing infrastructure, and new amenities, leading to projected deficits of $80 million this year and $100 million next year.
The Electronic Parking System (EPS) has reduced some operating costs by about 25%, but savings are insufficient to offset overall cost increases, and HDB expects deficits to continue even after recent fee revisions.
HDB car parks are generally well-utilised, with average season parking take-up rates above 70% islandwide, and there are limited cost savings from reducing existing parking spaces due to sunk costs, though some spaces have been converted to other uses.

Questions identified by AI (learn more)

Full Transcript

Assoc Prof Daniel Goh Pei Siong

Summary written by AI (learn more)

Assoc Prof Daniel Goh raised four questions about the sharp worsening of HDB car park finances, including reasons for the projected deficits, cost savings from outsourcing, current space utilisation, and potential savings from recalibrating car park numbers.
Lawrence Wong explained that while car park charges have remained unchanged for 14 years, costs have risen due to inflation, construction, maintenance, ageing infrastructure, and new amenities, leading to projected deficits of $80 million this year and $100 million next year.
The Electronic Parking System (EPS) has reduced some operating costs by about 25%, but savings are insufficient to offset overall cost increases, and HDB expects deficits to continue even after recent fee revisions.
HDB car parks are generally well-utilised, with average season parking take-up rates above 70% islandwide, and there are limited cost savings from reducing existing parking spaces due to sunk costs, though some spaces have been converted to other uses.

Questions identified by AI (learn more)

Lawrence Wong

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 Housing and Development Board (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 car parks; (b) cyclical improvements, as well as additional repair and redecoration (R&R) works required to maintain an increasing number of ageing car parks; and (c) more capital expenditures in new and existing HDB carparks, such as installation of lifts and roof shelters at multistorey car parks and their maintenance costs.

This is why there is a worsening of the fiscal position. If we had not made revisions to car park charges, HDB would incur an $80 million deficit this year, and an estimated $100 million 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 islandwide. From experience, this is a 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 car parks, as the cost of constructing them has already been expended, that is, sunk cost. However, where feasible and appropriate, HDB has, in the past, converted car park lots to other uses, such as social communal facilities.

Financial Deficits in HDB Car Park Operations

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Questions Identified

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Assoc Prof Daniel Goh Pei Siong

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Questions Identified

Financial Deficits in HDB Car Park Operations

Summary

Questions Identified

Full Transcript

Assoc Prof Daniel Goh Pei Siong

Summary

Questions Identified

Lawrence Wong