The new KMC car park which was supposed to be a major asset to Kandy instead is turning out to be a major liability. The Council anticipated to earn a substantial amount in revenue from the facility. Instead it is now faced with the prospect of having to use Rs 2.9m per quarter from scarce general revenue to repay the loan that was taken from the Asian Development Bank (ADB) to build the car park.

The car park was also expected to ease the unbearable traffic congestion in the town by reducing street parking. Instead an organized effort on the part of Kandy town shopkeepers, professionals such as lawyers who have offices in the town to park on the streets without paying the new parking fees has resulted in a half empty car park and congested streets. The contractor, Property Finance and Investment (Kandy) Ltd that operates the car park and also the street parking is expected to pay the KMC Rs 2.9 million per month as rent. But since the company started its operations in mid December 2005 it has not paid even one monthly installment and ows the Council a total of Rs 13m as at the end of April 2006.

A variety of organizations that includes the Sinhala Welenda Peramuna (Sinhalese Traders Front), Muslim Traders Association, Hindu Tamil Traders Association, Central Province Chamber of Commerce and Industry, YMBA, Three Wheeler Owners Association, Kandy Ratepayers Association and the Kandy Bar Association have made representations to the Municipal Council to reduce the street parking rates. Until such time that their request is granted it is believed that most members of these organizations and others are parking on the streets and refusing to pay the requisite fee to the parking attendants employed by the contracting company. The CEO of the company Mr. Thusitha Wijesena has informed the KMC that he would not be able to pay the monthly rental until the motorists pay parking fees due from them.

The Kandy Municipal Commissioner Mrs. Helen A. Meegasmulla told The Kandy News that two surveys done by the Kandy Traffic Police and the KMC Revenue Department respectively showed that most of the motorists who refuse to pay parking fees are those who park their vehicles for extended periods of time, some for as long as eight to ten hours. When the Council controlled town parking many of these people did not pay regular dues and got away. Now that parking has been privatized they are unable to avoid payment and have organized a boycott she alleged.

The Commissioner also claimed that the Kandy Municipal bylaws permit vehicles that are parked without payment to be towed away and the owners fined before vehicles are released. The Municipal lawyer in a report to the Council last January recommended that the bylaw should be enforced with police assistance. However, the Council which was facing an election did not accept the recommendation.

Mayor L B Aluvihare told The Kandy News that as a first step to resolve the crisis the KMC has appealed to the Central Provincial Council (CPC) to permit the Municipality to reduce the value of the contract fee from Rs 2.9m to Rs1.9m per month. This will result in the Council annually losing Rs 12m in revenue. But it will also permit the KMC to scale down the street parking fees. The Council is waiting for approval from the CPC and the Minister of Local Government to implement the revised scheme.