kheru2006 (kheru2006) wrote,

Cutting construction red tape

IT is common for organisations to react to issues and problems by introducing new rules or making existing ones more complicated.

Don't get me wrong, I am not against rules. Rules are necessary for proper control and standards, and to ensure people's rights are protected. Without them, there would be anarchy.

But if rules are copious, inflexible and complicated, they result in the dreaded phenomenon of "bureaucracy" or "red tape", increasing inefficiency and costs, and stifling innovation and entrepreneurship.

Albert Einstein called bureaucracy the death of all sound work. My favourite is this anonymous definition of bureaucracy as a game where everybody stands in a circle and the first one to do anything loses.

The reduction of bureaucracy is the main objective of Pemudah, the Special Public-Private Sector Taskforce To Facilitate Business, initiated by the government in 2007, in pursuance of its values of facilitation and not hampering, and no more regulation than necessary. This is being progressively tackled with a great sense of urgency and determination by adopting the following approaches:

PROCESS REENGINEERING -- radical restructuring and simplification of processes and removal of antiquated laws;

GUILLOTINE -- deletion of licences and permits where their continued existence cannot be justified;

COMPUTERISATION -- online applications, removal of human interface and discretion;

CONSULTATION -- understanding the needs and concerns of businesses and feedback on changes before implementation;

DIFFERENTIATION -- one size does not always fit all; differentiating rules and procedures where necessary; and,

BENCHMARKING -- comparison with and learning from the best in the world.

There has been much success but much more needs to be done.

An area currently receiving urgent attention is construction permits, a complex process requiring submission of project documents; obtaining necessary clearances, licences, permits and certificates; completing all required notifications; receiving all necessary inspections; obtaining connections for water, electricity, sewerage, telephone lines, etc. In total, five ministries and nine government agencies are involved.

It is also timely that this area is being addressed as construction is one of the key drivers of Malaysia's economic development, recording a gross domestic product growth of 3.5 per cent to RM18.9 billion last year.

Volume of work over the next decade is expected to increase by 30 to 50 per cent with the commencement of seven construction-related Entry Point Projects under the Economic Transformation Programme -- KL-Singapore high speed rail; KL MRT; Revitalising Sungai Klang ; Greening Greater KL/Klang Valley; Creating iconic places and attractions; Comprehensive KL pedestrian network and solid waste management eco-system.

While Malaysia has progressively improved to an overall 18th position last year among 183 countries in the World Bank Doing Business Report, ranking of Dealing With Construction Permits slipped from 111th to 113th position, despite introduction of a one-stop centre and reducing the number of procedures involved.

The World Bank had assessed Malaysia to have 22 procedures compared with the best of six for Denmark and to take 260 days for processing compared with the best of 26 days for Singapore.

This is obviously unacceptable, requiring an urgent resolution with a more aggressive and concerted effort. Working with Kuala Lumpur City Hall, the initial focus will be Kuala Lumpur which will then serve as the model to be implemented throughout the country.

Beginning early this year, the focus group immediately went into action and has conducted a comprehensive series of engagements with involved parties -- developers, contractors, engineers, architects, etc. They have also gone on a benchmarking mission to Singapore and consulted with the World Bank expert. Arising from these activities, an improvement plan has been crafted involving the following main actions:

SEPARATE requirements for higher value projects with higher risks (e.g. construction of a tower block) and lower value projects with lower risks (e.g. construction of a warehouse);

IMPROVE the coordination between ministries and agencies to enhance the efficiency of the one-stop centre and make it the only party the private sector has to deal with;

STREAMLINE and combine procedures to reduce the number and eliminate unnecessary requirements;

INTRODUCE self-regulation but with heavy penalties for non-compliance;

EXPLORE outsourcing to the private sector the processing of submissions and inspections for low risk building; and,

IMPROVE online application system to integrate the entire process on a single platform for greater efficiency and reduce the time taken.

With the above actions being currently implemented, the focus group has targeted a reduction of procedures to 12 and the completion time to 105 days, and subsequently to 60 days. While the main aim is to improve the government service and delivery of the whole country, this improvement will further enhance Malaysia's ranking in the World Bank Report.

The focus group is confident of delivering but it will need the cooperation of the private sector in two aspects -- feedback on faults, problems and proposals for further improvement, and usage of online systems where the overall uptake has been disappointingly slow.

By Datuk Saw Choo Boon Source: New Straits Times Columnist 24 August 2012 

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