Ho Chi Minh City’s plan to build underground parking lots has remained stalled for nearly a decade, and several investors now want to pull out.
The city government first planned more than ten underground parking lots, but new infrastructure projects have rendered those plans impossible.
The Ben Thanh – Suoi Tien Metro Line, for example, forced the city to abort plans for a lot in Lam Son Square; the conversion of Nguyen Hue street into a pedestrian promenade likewise scrapped plans for a lot.
Only four projects remain feasible: one below Le Van Tam Park, Tao Dan Park, Trong Dong Theater on Nguyen Du Street and Hoa Lu Stadium at the intersection of Nguyen Thi Minh Khai and Dinh Tien Hoang.
But during a meeting with the city government on Thursday, several investors asked to be let out of their financial obligations.
Some expressed their exasperation with years of red tape and said they'd expected to have the freedom to set their own fees rather than follow the city's regulations, which were designed for sidewalk parking lots that required zero investment.
A representative from the Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO) asked to cancel the Tao Dan lot, saying the company would barely profit from the construction.
The project was approved in 2010 and estimated to cost VND1.4 trillion (US$65.46 million).
It was designed to house a maximum of 1,050 cars, ten buses and 2,500 motorbikes.
Nguyen Thi Bao Quynh, deputy director of Indochina Group, asked to drop the VND1.6 trillion ($74.82 million) project at Hoa Lu for the same reason.
Quynh said the city’s parking fee regulations cancel out all incentives for investors like her and called the city's cost structure impractical.
She urged the city to let investors decide their own fees.
Since 2012, the official parking fees in HCMC has been VND2,000-4,000 for a motorbike and VND20,000-50,000 for a car, but vehicle owners are usually charged more in crowded areas.
Quynh also complained about having been caught up in heavy red tape at the Trong Dong lot, another Indochina Group project which also includes a shopping mall.
The VND800 billion ($37.41 million) received the investment permit in 2010.
But hundreds of procedures have stalled it since, Quynh said.
The HCMC Park and Tree Company, for instance, has not provided enough documents on ground clearance, leaving the company and the city government unable to work out settle on the appropriate cost of compensation.
Developers must pay the city to cut down any tree in Saigon.
The Investment Development for Underground Space Corporation broke ground on the lot at Le Van Tam Park in August 2010, and stopped after a string of design changes, according to comments made by its general director Le Tuan during the meeting.
Tuan said the company is still waiting for the city to approve the final design and remove a statue from the construction site.
Dao Hai Long, the company's chairman of technology, said the lot was designed to house around 2,000 motorbikes, 1,250 cars, 28 buses and trucks underneath a three-story shopping mall.
The delay has caused the cost of the project to balloon to almost twice its initial estimate of over $100 million, Long said.
Nguyen Huu Tin, vice mayor of the city, said that the Department of Transport should cooperate with related agencies to think of better policies to make sure the investors profit from the construction of the lots.
But Pham Sanh, a traffic expert, told Thanh Nien that the investors lost interest in the projects after their real estate plans imploded.
"These investors agreed to build parking lots years ago as part of several larger real estate schemes," Sanh said.
But the property market tanked and commercial rents fell along with it.
He said the city should cancel all the underground projects and focus on high-rise parking lots, which cost less to build.