Tuesday, 19 Dec 2017

Hanoi raising pavement rentals and the reasons behind

Updated at Friday, 01 Dec 2017, 15:43
The Hanoitimes - The proposal on adjusting the street and pavement rentals of Hanoi People`s Committee is assessed by many experts as contributing to management assistance, limiting traffic congestion, increasing revenue for the city budget, especially for temporary parking method.
Recently, Hanoi People's Committee has just considered tripling the rentals for pavement and roadbed in the inner city areas.
Shortcomings of rental collection method
Representatives of Hanoi Transport Department said that current framework of charing Hanoi streét' pavement and roadbed rental fees remains inadequate. Specifically, the street and pavement rental fees as temporary car parking is collected by area (m2 / month) or 6% of total revenue. In particular, the collection method by revenue leads to the possibility of large revenue loss due to poor management.
In addition, this rate is said to be unfair among areas with a high density of vehicles and parking demand. Due to the low charge, individuals and organizations compete for parking services, not regarding to the quality and regulations, causing traffic jam.
Parking lot on Ly Thuong Kiet street. Photo: Pham Hung
Parking lot on Ly Thuong Kiet street. Photo: Pham Hung

In addition, the current fee amount has been applied since 2014. Up to now, the Vietnamese base salary has increased by 2.41 times, the minimum area wage increased by 4.69 times while the consumer price index (CPI) rose by 106%.
Moreover, along with the socio-economic development, Vietnamese living standards are being improved while the number of personal vehicles soared, resulting in increasing demand for traffic.
Many experts supposed that without collection, Hanoi city will lose a supplementary budget for streets and pavements maintenance.
On the other hand, according to the consultant’s survey on the charge rate adjustment, actual fee for parking services in many places is even higher than the amount prescribed by the city. Traffic expert Dang Chi Nga said: "It is time to adjust the cost of using streets and pavements. The city is losing a lot of money from this, while many individuals and organizations gained benefit", he said.
Three main objectives
It is known that the project:"Modifying and supplementing regulation on fee for temporarily renting streets and pavements in ​​Hanoi" is aimed at three following main objectives: restriction of individual vehicles in urban areas, aiming to reduce traffic jam; increasing budget revenues; encouraging organizations and enterprises to carry out underground or modern parking lot to meet the traffic demand.
When applied, according to Hanoi Department of Transport, the new regulation will remove collection method of 6% from the total revenue and accordingly, all temporary parking places on streets and pavements will have to pay charge by using area.
"This will be an effective way to prevent budget revenue losses from street and pavement using services, especially to keep vehicles for the benefits of residents, corporations and authorities. On the other hand, the high fee amount for areas temporarily exploited as services will motivate investors to invest in more methodical and sustainable projects", said the representative of Hanoi Transport Department.
On the project dedicated to the parking method by smart device iParking with a charge of 30% of total revenue, Deputy General Director of Hanoi Parking Joint Stock Company, Mr. Pham Van Duc said that "iParking is a modern system that ensures revenue transparency, so this collection method could be implemented without worrying of revenue loss."
Telling Hanoitimes on the above-mentioned project, Urban Management Master Phan Van Thanh said that the new framework of Hanoi street and pavement rentals will result in rising parking fee. This is an economic measure to minimize the circulation of personal vehicles and contributing to reduction of traffic congestion in the inner city.
Tu Anh
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