The financial viability of building a multi-storey car park at the University of Malta

Abstract

Purpose: The underlying aim of this study is to determine whether the building of an underground multi-storey car park at the University of Malta is financially viable. The need for additional parking at the University of Malta remains an issue that should be tackled, as there aren't enough parking slots to accommodate all the cars of academics, non-academics and students. To make things worse, this parking problem has been exacerbated in the last few years. This is mainly due to the ever-increasing number of students attending University and also due to the increase in the use of private cars by these students. Design: The demand for such a car park was analysed through a questionnaire and it was also examined whether students would be prepared to pay a fee to be able to make use of this facility. Capital and operating expenditure that would be incurred by the car park were then estimated. This allowed for the projection of the Income Statement and the Cash Flow Forecast. The project's feasibility was subsequently evaluated through various investment appraisal techniques. Findings: From the demand analysis carried out it emerged that there is a potential demand for a multi-storey car park. However, the parking fees that students would be prepared to pay to be able to park in the proposed car park resulted to be quite low when compared to the parking fees charged by other car parks in Malta. Conclusions: Conclusions were drawn on the findings obtained that the proposed project is not financially feasible, mainly due to reason previously stated. However, as there is a social element to building this car park the government could be interested in a public-private partnership and could finance a large portion of the capital expenditure.