Dear Editor,
I refer to your headline in the Friday August 26 edition of the Stabroek News: ‘Parking meters company recruiting staff -though city still to act on damning findings about contract.’
There has been lot written about this matter but unfortunately no one has attempted to do an economic justification of the project based on current best practices.
Information on the new parking meters for the City of Georgetown as published in the local newspapers:
- Sole sourcing of supplier with a contract period of 50 years as stated by the Deputy Mayor or is it 49 years as stated by the parking meter contractor?
- The parking rates would be $200.00 per hour as stated by the Mayor or is it $125.00 per 15 minutes stated by the employees of the parking meter company?
- The parking meter company would be paid 80% of the revenues collected from the meters and the city would get the remaining 20%.
In my online research, I found that the City of Memphis USA had modernized their parking meters in 2013. More information on this project can be found at memphistn.gov/parkingmeters. In the Frequently asked Questions section of that website I found the following information:
- What types of meters are we getting and how were they selected?
The meters that will be installed are both multi-space kiosks and single space meters. After the process of releasing a request for proposals for new equipment, the City received 6 proposals and out of those, the current vendor was identified (Parkeon) as the best choice for Memphis.
- What are the benefits of the modernized system?
One of the major benefits of modernizing the system is the ability to use a credit or debit card. Also, the meters have wireless capabilities that enable them to notify the parking meter department when they need service.
- How many parking meters are being purchased?
Our initial purchase is 135 multi-space parking kiosk and 485 single space parking meters. These will manage approximately 1500 on-street parking spaces. We have the option to purchase additional parking meters at the same negotiated price if necessary.
- How will the City of Memphis pay for this parking meter modernization?
The City has signed a 5-year lease/purchase agreement with the vendor. Payments will be covered by the parking fees.
- What is the current parking meter rate and has the rate increased recently?
The current parking meter rate is $1.00 an hour. Two years ago it was raised from 75 cents to $1.00 an hour.
The parking meters installed by the City of Memphis are similar to the ones that are being proposed for the City of Georgetown, and the rate of US$1.00 per hour is equivalent to the $200.00 per hour quoted by the Mayor of Georgetown.
In the case of Memphis, the total cost of the meters would be paid in 5 years; that means that the parking meter contractor would be paid 100% of the revenue for 5 years. If the same formula was used for Georgetown, then the parking meter contractor should be paid 80% for only 6.25 years.
Using the same formula for a 50-year contract period would result in the parking meter contractor being paid 10% per year for 50 years. If the contract is actually 49 years, then he should be paid 10.2% per year for 49 years.
I understand that this secret, sole-sourced contract between the parking meter contractor and officials of the Mayor and City Council of George-town was reviewed by the Government of Guyana which found no indication of corruption. While I would not question the findings of that investigation, I would state that, based on my research and calculations, it would be a clear case of exploitation of the Georgetown by the parking meter contractor if he were to be paid 80% of the revenues per year from the parking meters for 50 years instead of a figure closer to 10% per year for the same period.
Yours faithfully,
T Singh
