This document analyzes the financial feasibility of implementing a smart parking system in a municipal parking lot with 21,000 parking bays in Petaling Jaya, Malaysia. It finds that with a 60% occupancy rate, the system would generate a yearly gross profit of RM1,884,456, but with 80% occupancy could generate RM8,174,376 in profit annually. The total capital expenditures are estimated at RM13.7 million and ongoing operating costs at RM5.4 million per year. Projections show the system would become profitable within 3 years if occupancy remains at 80% or higher.

1. Smart Parking
Financial Feasibility Case Study
Razman Jaafar 14th July 2017
Master in Business Administration UUM

2. Parking Lot Coverage
 Petaling Jaya Municipal Public Outdoor Parking nay
 Total parking bay : 21,000
 Monthly lease to concessionaire per bay monthly : RM 37.45
 Parking Rate : RM0.10 per hour
 Hours operating per day : 8 hours (day time)
 Number of day operating per month : 26 days ( sunday is free )

3. Smart Parking Gross Revenue
Parking Bay Revenue RM
10 min 0.1
1 hour 0.6
per day @ 8 hours 4.8
per month 124.8
Average daily occupancy 60% 4.8 hours
daily average return 2.88
Monthly average (26 days) 74.88
Total Parking Lot 21,000
Parking bay occupancy rate 60% 12,600
Revenue per day 36,288.0
Revenue per month 943,488.0
Revenue per year RM 11,321,856.0
 Gross Return :

4. Smart Parking Expenditure
①Concessionaire parking bay lease cost :
 Total Parking Bay x Lease rate : 21000 x RM 37.45
 Monthly : RM 786, 450.00
 Yearly : RM 9,437, 400.00
 YEARLY GROSS PROFIT : (Total Parking bay occupancy)
 with 60% occupancy
 REVENUE – Parking Bay Leasing Cost
 RM 11, 321, 865.00 – RM 9,437, 400.00
 RM 1, 884, 456.00
 With 70% occupancy
 RM 5,972,904 .00
 With 80% occupancy
 RM 8,174,376.00

5. CAPEX & OPEX
CAPEX
Unit Cost
in RM
Qty Total in RM
Deployment coverage 60%
parking bay sensor 500 12,600 6,300,000.00
sensor gateway, every 50 sensor 1500 252 378,000.00
wireless gateway -
poles -
Sensor Deployment 500 12,600 6,300,000.00
Sensor Gateway Deployment 1000 252 252,000.00
Backend System
sms gateway
Control Management 200,000.00 200,000.00
parking payment system 300,000.00 300,000.00
Total CAPEX 13,730,000.00
Opex Cost Qty
Telco Charge Yearly ( RM10 per
Gateway per month)
120 30,240.00 30,240.00
System Operation & Maintenance 10 540,000 5,400,000.00
Total OPEX 5,400,000.00
TOTAL CAPEX & OPEX 19,130,000.00

6. -15,000,000.00
-10,000,000.00
-5,000,000.00
-
5,000,000.00
10,000,000.00
15,000,000.00
20,000,000.00
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
NPBT
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
PROJECTED NBPT BY YEAR OF
OPERATIONS
BASED ON 80% OCCUPANCY RATE

7. Business Model Analysis
 Occupancy rate below 80% would not lead to viable business model for
smart parking system (with parking sensor).
 Parking bay leased is paid based on occupancy rate would be required
to have reliable business .
 It required of increase parking usage by 20% for RM0.1 per hour to RM
0.12 per hour (~ RM 5.80 per day – 8 hours), in order to have reliable
business mode.

8. Summary
 Parking bay occupancy is very much important to get a higher return.
 Required negotiation with Municipal for pay the leased for the
occupied bay only. Revenue sharing model based on percentage of
collection instead of leased the total parking bay.
 Cost of Sensor Solution is very critical to reduce the CAPEX, it
represent nearly 90% of total CAPEX ( inclusive services)
 Resources need for the operation and maintenance of the system or
solution need to optimized to reduce yearly OPEX. Solution with
minimum on-site intervention is required.