Hanoi parking projects face site clearance problems, investor disinterets

At least 37 parking lot projects in Hanoi are facing site clearance and investor attraction problems, said Le Anh Quan, director of the municipal Department of Planning and Investment.

At a meeting of the Hanoi People’s Council Thursday, he said the city plans to have 1,620 parking lots, including 73 underground. To date, it has put into use 96 projects and is considering adjusting investment plans for 52 others.

The capital city has terminated five projects, and plans to end two more in the near future, he said, but did not elaborate.

Six projects have had their investment plans submitted for approval, he said.

Quan said parking lot projects have not proved very attractive to investors because it was unclear if they were service-trade projects or a part of transport infrastructure. "The Department of Natural Resources and Environment thinks that it should be considered a service-trade project."

He also said that parking lots in well-developed residential areas were a far more attractive investment option than those located far from such areas as well as areas with “asynchronous” infrastructure because of low occupancy rates.

In addition, there are limits on parking fees while land rentals are high, offering poor returns, especially for underground parking lots with large investments.

Quan said the department will recommend that municipal authorities propose to the Ministry of Transport that it provides clarification on a number of issues in order to achieve consistency in approving investment policies, allocating land and calculating land use fees for parking lot projects.

The department was compiling a list of parking lot projects that need investment and will ask other agencies as well as offices to publicize it for selecting investors, he said.

On the issue of incentives for parking lot investors, director of the municipal Department of Finance, Nguyen Xuan Luu, said that the government subsidizes 10% of the land rent for underground parking projects.

Meanwhile, Hanoi has come up with a policy to offer rent-free land for multi-level parking systems.

To attract investors, Luu proposed that the city People's Committee auctions the sites earmarked for parking lots. Hanoi needs to have more support policies for those who invest in developing underground parking lots, he said, adding that some public areas like parks could be used to build underground parking lots.