Beijing-parking-ITDP-China

the parking management system is complex, withmany interrelated software.Other operation costFor PR and marketing, aimed at continuous,transparent customer service and feedback, anannual cost of 3,600,000 RMB is assumed.Including 5% unforeseen costs, the operationcosts for the first year are 51,555,021 RMB, whichincreases by 3 % inflation annually. Operationalcosts drop from the third year due to savingsin staff. Operation costs of the third year are37,727,531 RMB (including 5 % unforeseen costs).6.8.5 Parking revenue calculationSome assumptions are made for the calculationsof parking revenue, which are set out as following:●●Day time operational hours are assumed from7.00am-9.00pm. Even though the daytimeparking fee is higher, only 8 RMB/hour isassumed.●●Night time operational hours are assumedfrom 9.00pm-7.00am (0.5 RMB / half hour)●●Given inflation and growth of parkingdemand, parking fees will surely rise over the10 year contract period. In the calculation theparking fee is kept stable though.●●Only 25% parking occupancy of driverspaying for parking is assumed. Although notevery driver will pay and demand is not highduring the entire day, revenues can be expectedto be much higher. With the maturingof the system compliance to parking paymentis increased by a very conservative 1% annualincrease from the second year of operation.●●An average parking duration of two hours,based on the surveys, is used.The revenue calculation is as follows: one parkingspace has 14 hours of parking operation inthe daytime (7am-9pm), multiplied by 365 days,so 5,110 operational hours per year. If we take thefirst year’s occupancy rate of drivers parking andpaying of 25 %, then 1277.5 hours are sold. With 2hours average parking duration per parking event,639 parking actions at 16 RMB = 10,224 RMB isspent at each parking space. For 12,000 on-streetparking spaces, this equals 122,688,000 RMB.For night time we calculated with 2 parkingevents/parking space/night. So the income iscalculated as follows: 12,000 parking places x 25%occupancy rate x 2.5,- RMB / parking action x2 parking events/night x 365 days = 5,475,000,-RMB for all night time parking.The parking revenue for the first year for bothday and night time is 122,658,000 RMB. For subsequentyears the assumed 25% occupancy rateis increased incrementally to 34% due to higherparking demand and higher payment compliance.6.8.6 Profitability calculationThe revenue share between the government andprivate parking operator are assumed followingthese ratios, although these are negotiable beforesigning of the contract.Revenue shares between government and privateoperatorBeijing Parking, ITDP-China 1431 March 2015YearGovernmentrevenue sharePrivate parkingoperator share1 30% 70%2 30% 70%3 30% 70%4 40% 60%5 40% 60%6 40% 60%7 40% 60%8 40% 60%9 50% 50%10 50% 50%The profitability calculation of the 10 yearcontract period is shown in the table below. Thefollowing conclusions can be drawn:●●Total revenue from the 12,000 parking placesis 1,518,126,000 RMB;●●The Beijing government earns 39% (averageof 10 years) of all revenue as a net profit,amounting to 601,611,540 RMB, as well asthe local business taxes/VAT of the parkingcompany and the parking company’s employees’taxes (income tax, social security, etc.);●●The parking company will earn 61% (averageof 10 years) of the revenue, amountingto 916,514,460 RMB. Operation cost are434,300,830 RMB and investment cost (capitaland interest) of 122,849,629 RMB leavesthe parking company with a net profit of226,486,642 RMB.