HOUSING AND DEVELOPMENT BOARD (Losses in car park operations)

Mr Chia Shi Teck asked the Minister for National Development why there were huge losses in the operation of Housing and Development Board car parks and how he plans to curb the losses without resorting to an increase in car park charges.

Mr Lim Hng Kiang (for the Minister for National Development): Mr Speaker, Sir, HDB has not been able to fully recover its costs for the provision of car parks, because past increases in car park charges could not keep pace with the increases in operating and construction costs for car parks.

HDB is constantly looking at ways to increase efficiency in car park operations, through automation and better use of manpower to keep down costs. However, doing this alone will not be sufficient. It is necessary to increase car park charges gradually to cost-recovery levels, so as to reflect the true cost of providing car parks in HDB estates. My Ministry is, however, mindful of the impact of increases in car park charges on HDB residents, and will carefully examine the implications of any future revisions in the charges.

Mr Chia Shi Teck: Sir, I notice the loss incurred is, to a great extent, due to the interest charged. It is over $100 million in the last financial year. Could the Minister of State explain these interest charges?

Mr Lim Hng Kiang: The HDB has to pay the Government for the land that it has acquired for the provision of car parks. The cost of this land is paid for through development loans and there is an interest incurred in paying these development loans.

Mr Chia Shi Teck: Sir, could the HDB not charge the cost of land into the cost of construction of the buildings? What I mean is that the car parks to serve the housing units should be charged into the cost of the building as in the private estates.

Mr Lim Hng Kiang: Sir, let me explain the situation in public housing which is slightly different from private housing. In private housing, the developer provides one car park lot per housing unit. In public housing, there is no reason for us to do so, because we have surveyed the car ownership patterns of HDB residents. As you know, in Singapore, the car ownership ratio is about 1:10. And since public housing caters to the lower income group, the car owning ratio, say, in the 3-room flats is one car in three families. If you were to build car park lots and charge the cost to every unit, then what you are saying is that the lower income groups who purchase flats will be subsidising those who own cars. That is not the intention of the Government. We separate the costing of the flats to reflect the true cost of providing housing to Singaporeans. We separately cost the car parks so that car owners will pay for the car parks provided to them.