Occupancy rate about 2 percent as of today
The multi-level car parking (MLCP) at the entrance of the city has everything—formally-dressed security guards at automated gates, blinking closed-circuit television, well-placed signage, working elevators, smooth floor, clean washrooms and lighted space.
The only thing missing is vehicles.
The building opened last June, nine months ago. There are space for 570 vehicles to park at the two MLCPs. Occupancy rate, however, is only two percent. The thromde targeted an occupancy rate of 50 percent.
The earnings, therefore, is only in a few hundreds or thousands in a month.
Last month, the company operating the facility earned Nu 36,000 from MLCP 2 near Thimphu Thromde office and Nu 80 from MLCP 1 near the Zangdopelri complex.
An official of KCR private limited, who undertook the project, said that were no fee paying cars and a few vehicles in the parking were that of card holding thromde officials who were exempted from the fee.
“We charge Nu 10 in half an hour whereas the street parking spaces cost Nu 15. I don’t know why there are no takers for the space,” she said, adding that the infrastructure and facilities in the parking were of international standards.
She said that except for occasions such as sports events, the parking slots remained empty throughout the day.
The company had asked for loan deferment from the banks and is expecting that with thromde and traffic police’s intervention in curbing illegal parking, MLCP business would increase.
Chief executive officer of KCR, Namgye Penjore, said that the project was first of its kind in the country and therefore unpopular among public.
With an estimated cost of more than Nu 4 billion, KCR was awarded the development and management of integrated parking system in Thimphu in 2014 under Public-Private Partnership for a 22-year contract.
The contractor is required to design, build, finance, operate and transfer concession. The agreement states, “If the work is delayed for more than 180 days, after 30 days’ notice the contract shall be terminated.”
Delays in completing the parkings have cost the agencies dearly with a total revenue loss of more than Nu 8.2 million. This is according to a Royal Audit Authority report (RAA).
Audit reported that both MLCP 1 and 2 were still under construction even after the lapse of MLCP 1 for 602 days and MLCP 2 for 728 days as against the stipulated completion date of 5 November 2017 and 2 July 2017 respectively. The applicable liquidated damages amounted to Nu 480, 000 and Nu 300, 000 as of June last year.
“Thimphu Thromde took no action even after the lapse of more than two years and works on the MLCPs continued till June 2019,” the report stated.
The delays have incurred loss to Thimphu Thromde in terms of potential revenues from MLCPs.
The findings also revealed lapses in change of concession period from 17 to 22 years. The change was made without approvals from competent authority and the bidders communicating the increase in concession period was not available on record.
RAA also pointed out that there were no inspection reports and handing taking note on the physical structure of MLCPs while it was unclear on the nature of commercial space. The audit team has confirmed that a hotel is being placed inside the MLCP 1.
In response, thromde management said that since the project was first of its kind in the country, thromde lacked experience in implementing and did not have a dedicated unit with adequate personnel to record proceedings and documents.
The management reported that the delays were due to problems in remitting dollars from Nepal and change in structural designs.
RAA recommended the thromde to submit missing documents or information to the authority to validate the response from the thromde management. “In the event of failure to submit the necessary documents the findings regarding construction of MLCP will be pursued as it is.”
Currently, thromde receives around Nu 9-11 million per year from parking fee collection from all parking spaces in the thromde.