Thimphu Thromde says parking fee hike to encourage off street and MLCP parking

Decision taken by former Thromde Tshogde headed by Thrompon

On 30th March 2021 the Thimphu Thromde announced a dramatic hike in parking fees within Thimphu Thromde areas saying it got approval from the Finance Ministry.

The rate for on street parking was raised from Nu 15 per 30 minutes to Nu 20 for 30 minutes. On street parking refers to all parking along the streets like in Norzin Lam, Chang Lam, Hong Kong market etc.

The rate for off street parking which is parking in certain grounds and openings like Changlimithang ground, was increased from Nu 10 per 30 minutes to Nu 15 per  30 minutes.

Give how the parking fee system is levied that means that even if you park your cars for around 5 minutes on Norzin Lam you will have to pay Nu 20 and if you park around 33 minutes then you have to pay Nu 40.

This move by the Thimphu Thromde was widely criticized by the people given the rate that people now have to pay. Many also came on the Thromde’s facebook page to criticize it for the decision.

Decision approved by Thromde Tshogde

Some questioned on how the Thromde could take this decision in the absence of the Thromde Tshogde which is made up of the elected Tshogpas headed by the Thrompon.

However, the Thromde Executive Secretary Karma Namgyel clarified that the Thromde Secretariat would never a take a decision on its own.

He said that this decision was taken by the Thromde Tshogde in early 2020 before the first lockdown and it was only recently that the MoF approved it.

Encouraging off street and MLCP parking

Thromde Engineer Ugyen Lhamo, who was nominated by the Thromde to talk about the issue, said the main purpose of the hike is to encourage off street parking which includes two Multi Level Car Parks (MLCPs).

She said that cars should ideally park on the street parking only for emergency purposes and short durations and less parking there would mean more free flowing traffic.

Ugyen said Thimphu originally had projected a need for five MLCPs given the forecast rise in traffic but only two could be built on a PPP basis. The two MLCPs are currently run by a private company called KCR Pvt Limited.

She said the parking fees started in 2002-03 and was hiked last around 2012. She said that the current hike  is also as per the Concession Agreement between KCR Pvt Ltd and Thimphu Thromde and a formula prescribed by IFC that is linked to inflation. 

Under this a hike will come around every five years.

She, however, denied that Thimphu Thromde is trying to favour KCR with this parking fee hike.

Ugyen said that there are around 1,500 parking slots of which under 1,000 are with KCR in the urban core area from Doebum Lam to Norzin Lam to Chang Lam while the rest are split between two other contractors.

In the case of KCR it is a part of a 22-year agreement as part of the MLCPs Concession Agreement while in the case of the two other contractors it is a three-year contract.

Paid parking in North and South Thimphu

Ugyen said that within this year or by next year the plan is to also mark all government parking along roads and government spaces in areas like Changzamtog, Taba, Babesa, Olakha etc in North and South Thimphu and start collecting parking fees from them.

Currently many residents in these areas park for free along the roads.

Ugyen said that building owners in these places should stick to their original building plans that had car parking in the basement which later got turned into shops and other commercial uses.

Ugyen said while the parking rates have been increased for on street and off street, KCR Pvt Ltd has kept its parking rate at Nu 10 for every 30 minutes in its two under utilized MLCPs to encourage people to park there.

KCR has space for around 550 parking slots there.

Ugyen said Thimphu Thromde gets around Nu 20 mn a year from all its three contractors.

However, KCR which is supposed to pay around Nu 4.4 mn separately every year for its two MLCPs to Thimphu Thromde is yet to pay it with even the Thromde recommending to the MoF to waive it off given the low occupancy there.

The Thromde Secretary said that one lesson learnt from the public reaction is not to increase it at once after a few years but do it gradually every year. He said Thromde also has to increase the parking fees as it is a source of revenue for the Thromde from whom people demand services.

On the question of if the public was consulted the secretary said that the secretariat at the Thimphu Thromde are civil servants and so they assume that the elected Thromde Tshogde must have consulted with their people on an issue like this before such a decision is taken.

RAA says only small portion of parking revenue goes to Thromde

A section of the ‘Performance Audit on Urban Planning and Development in Thimphu Throm,’ report by the Royal Audit Authority (RAA) released in 2020 said that not including the 550 parking slots in the MLCP 1 and 2, Thimphu Thromde according to the RAA has 1,460 parking spaces on the streets.

RAA found that 1,460 parking slots as per its calculation generates around Nu 145.1 mn in revenue every year.

However, the RAA said that Thromde got only Nu 20.14 mn from this which is 13.88 percent while the two parking companies KCR Pvt Ltd in the core area and Kuenchap Enterprise in CFM and South Thimphu would get Nu 125 mn as their share.

Of this the RAA says that KCR Pvt Ltd with 1,013 parking areas (outside the two MLCPs) in the Thimphu core area makes Nu 98.06 mn a year of which it keeps Nu 84.04 mn and gives Thromde only Nu 14.02 mn.

With the Thimphu Thromde planning to convert more free parking areas in the core areas into paid parking areas and handing over to KCR this revenue will go up even higher.

Kuenchap Enterprise has 447 slots in South Thimphu and the CFM. It makes 47.03 mn according to the RAA of which it keeps Nu 40.89 mn and gives Thimphu Thromde Nu 6.14 mn.

RAA had said that Thimphu Thromde is losing out millions in potential revenue from the parking space.

Thimphu Thromde has recently created around 150 additional parking spaces.

The increase pushes up the total collection to around Nu 180 mn of which the majority will go to the companies.

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