HDB MULTI-STOREY CAR PARKS (Reduction of season car parking charges)

Mr Chng Hee Kok asked the Acting Minister for National Development if he will reduce season car parking charges in Housing and Development Board multi- storey car parks to the level of open space car parks.

The Acting Minister for National Development (Mr Lim Hng Kiang): Mr Speaker, Sir, the Member asks whether we will reduce season car parking charges in multi-storey car parks to the level of open space car parks. The answer is no. The long term objective is to recover the full economic costs of providing car parks. The present level of season car park charges for surface car parks is below the full economic cost of providing such car parks.

Mr Chng Hee Kok: Sir, car parking is part and parcel of the infrastructure. Will the Minister confirm that recently the car park charges for open car parks were raised, but not for the multi-storey car parks?

Mr Lim Hng Kiang: Recently, we raised the car park charges for surface car parks but not for the multi-storey car parks because the recovery rate for surface car parks is far below that of multi-storey car parks. So we are now moving closer to recovery rates.

Mr Chng Hee Kok: Will the Minister confirm that they are not using purely economic rationale for moving up or reducing car park charges? In effect, what we have done in the last exercise is that we have reduced the charges for covered car parks relative to that for open car parks. By not raising the covered car park charges, we are actually lowering those charges. In other words, the rationale is not purely economic. That is my question.

Mr Lim Hng Kiang: The rationale is economic. Right now, the recovery rate of multi-storey car parks is higher than for surface car parks, which means that the surface car park rates have somewhat more to go before we can fully recover the cost.

Dr Wang Kai Yuen: Could I ask the Minister whether he would consider moving away from cost recovery basis for calculating car park charges to demand-based car park charges? In other words, for places where there is a higher demand, the rates will be higher, rather than base the rates on a cost recovery basis.

Mr Lim Hng Kiang: I am very glad the Member has raised this principle. We accept this principle. If there is greater demand, then car park charges will go up.

Dr Wang Kai Yuen: Since the Minister accepts the principle of demand-based car park charges, in places like multi-storey car parks where there is very minimum demand, would he consider reducing the car park charges?

Mr Lim Hng Kiang: The two will go together.

Dr Wang Kai Yuen: Could I ask the Minister whether that means "yes"?

Mr Lim Hng Kiang: Mr Speaker, Sir, there are several principles on which to base car park charges. First, we start off by trying to recover the cost in which we provide car parks, because it is the principle of this Government not to subsidise the cost of owning cars. Car owners must fully pay for the privilege of owning cars.

The second principle is of course the utility to the car owners. Many will argue that surface car parks provide more utility than covered car parks, in which case since there is greater demand for surface car parks, then of course the surface car park charges should be higher than that for multi-storey car parks. If you go along the same argument of utility, you could also say that car parking is the same, whether it is multi-storey or surface car parks, in which case, the rates ought to be similar or close. So we are moving in this direction of adopting both cost recovery, utility, as well as demand and supply in our next revision of car parking charges.

Mr Chng Hee Kok: Sir, will the Minister say that the higher demand for open car parks is a result of the lower charges for open car parks at the moment and not because of utility?

Mr Lim Hng Kiang: When we first introduced car parking charges, the main principle was cost recovery. That is why car parking charges for surface car parks were set lower than that for multi-storey car parks. Now we accept the other principles involved, ie, utility, demand and supply. And we will have to go towards a more differentiated way of charging car parks.