Among the four underground public parking lot projects, the one located at Le Van Tam Park is rather complicated legally. As instructed by the HCMC People’s Committee, in December 2021, the municipal Transport Department held a meeting with relevant state departments to discuss the possibility of terminating the BOT contract with IUS Co. due to its tardiness.
On its side, IUS Co. sent a formal request in August 2022 for a deadline extension for another 24 months so that the investor can find suitable partners or work with international financial – credit organizations to address its issues and continue this meaningful project for public benefits. It accepts the policy of supporting all loan interest on the total loan amount (not exceeding 70 percent of the total project investment) in the 3 months of construction, as well as an annual rate of 3 percent to partially compensate the interest in 10 years after the operation of the parking lot.
In the case that state management agencies opt for the termination of the BOT contract, the investor wishes to transfer all technical documents that IUS Co. has done and to return all or part of the audited costs invested by IUS Co. to Dong A Commercial JSC. in order to minimize the general damages, especially those to this bank and the company.
Seeing that the investor has violated the content of the contract, the HCMC Transport Department announced a permanent termination of the contract and asked for cooperation from the HCMC Departments of Natural Resources and Environment, of Justice, of Planning and Investment to check and withdraw any land-related and investment-related legal procedures of the project.
Another two underground parking lot projects under the charge of the joint venture between Vingroup and SSCI Co. are located in Tao Dan Park and Hoa Lu Stadium. Both have had the deadlines of their feasibility reports extended three times, yet those reports have not been completed, leading to serious tardiness. In 2019, the investor also announced a notice for early termination of the contracts. After checking, the HCMC Transport Department proposed that the municipal People’s Committee stop the contracts for these two projects.
Therefore, only the project near Trong Dong Stage is still being implemented. Nevertheless, the HCMC Planning and Architecture Department and the project’s investor – Dong Duong Co. – have not reached an agreement on the architecture planning yet.
Following the alternative that the first floor is for commercial purposes and the next two for Trong Dong Stage will change the approved nature of this parking, which is not compliant with the regulations of the Law on Urban Planning. the HCMC Planning and Architecture suggests returning the whole ground space of the stage to Tao Dan Park while the underground one is saved for parking and commercial purposes in accordance with the 1/2000 planning as well as the regulations on management of landscape architectural space in the existing central area (930ha).
Statistics from the HCMC Transport Department reveal that there are now more than 850,000 cars and over 7.8 million two-wheel motor vehicles. The pressure on parking space, especially for cars, in the city heart is rather heavy. The current lots can only accommodate 20 percent, and there is a lack of more than 900ha compared to the target of 1,200ha after 2020.
Resolution 98/2023/QH15 has allowed HCMC to apply specific mechanisms and policies to issue a construction permit for a limited time to public works under the State management. Adopting this, the municipal Transport Department has just asked the People’s Committee of Thu Duc City, all districts, and relevant state units to urgently check available space for smart assembled parking structures.
This parking lot type with multiple floors is considered to be both cost and time-effective in construction, with simple management technologies and quick capital recovery time while requiring a small surface area only.
At present, there are four possible locations of part of Le Lai Street (the section from Pham Hong Thai Street to Nguyen Thi Nghia Street), part of Le Van Tam Park (on Hai Ba Trung Street in District 1), Cho Lon Bus Station, and part of Hai Thuong Lan Ong Street in District 5. The total surface area of these lots is about 1,500m2 with a capacity of 350 cars of 9 seats and below and 200 two-wheel motor vehicles.
Dr. Pham Sanh from HCMC University of Technology (Vietnam National University-HCM) commented that HCMC should diversify parking lot types. It is advisable to check all current parking lots in the city as underground parking projects under the BOT model are not feasible. This is because the cost for the space to park one car is VND2-3 billion (US$101,000) while the investor can earn only tens of thousands of VND per parking turn. It is nearly impossible to recover the capital, let alone seeking profit.
At present, to address the problem of parking lot shortage in the city downtown, HCMC should wisely exploit available policies from Resolution 98/2023/QH15 while applying new models of multi-floor parking lots and using automation technologies in operating these lots.
