Mumbai / New Delhi: Multi-level parking is emerging as an attractive business opportunity for many engineering and urban infrastructure companies.
These companies say that multi-level parking could well emerge as a Rs1,000
crore industry in the next two years.
Spaced out: A car at the entrance of the basement parking at Palika Bazaar, New Delhi. Organized players are now interested in developing new multi-level parking lots to solve the problem of urban space crunch.
“Opportunities are opening up in cities such as Mumbai, Chandigarh, New Delhi, Hyderabad and Lucknow for development. We are working on 8-10 such projects,” says J.K. Valecha, managing director, Valecha Engineering Ltd. The Mumbai-based engineering and contracting company will be bidding for multi-level car parking projects in different cities, he added.
Municipal corporations are opening up car park spaces for realty development in big cities. Infrastructure companies that create multi-level car parking spaces get some additional space for development which can be sold or rented out for commercial purposes. The space provided for development ranges from one- tenth to almost one-third of the size of the car park. And project sizes range from Rs50 crore to Rs150 crore.
Apart from local government bodies, companies developing retail and infrastructure are also interested in outsourcing car park development.
Mumbai International Airport Ltd, the company developing Mumbai’s airport, plans a multi-level car park and Valecha, Atlanta Ltd, Soma Enterprises and DS Construction are reported to be interested in developing this facility.
“It is a good business. Each city may require five-six such parking garages, with possible revenues of Rs30-40 crore (a year) per garage. So, we are talking of thousands of crores in potential revenue,” said M. Goutham Reddy, chief executive officer of the Hyderabad-based Ramky Group.
The garages are typically bid out on 20-30 year concession periods, with operators offering a share of the revenue as royalty to the local governments, said Reddy.
Ramky Group has interests in urban infrastructure, waste management and special economic zones. The group had bid for four multi-level parking garages that the Municipal Corporation of Delhi had invited tenders for in 2005, but decided against making a final offer because of the availability of free parking in the city.
“We didn’t see merit in it at the time, because we thought they (the city) were not ready for banning kerbside parking. Now we are considering bidding in other cities,” said Reddy.
“It is difficult to put a number on the business potential of this. With so many new parking space technologies coming up, this is turning out to be a good business to be in. There is a need for such projects. Downtown Mumbai needs 25 new parking projects and New Delhi needs 50,” said Gopal Sarma, managing director of infrastructure advisory division of New Delhi-based Feedback Ventures Pvt. Ltd.