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Improving Efficiency in ‘Dealing with Construc:on Permits’ in Kuala Lumpur

Modernising Business Regula:on Project

PUBLIC CONSULTATION PAPER

Dealing with Construc:on Permits in Kuala Lumpur

Malaysia Produc.vity Corpora.on P.O. Box 64 Jalan Sultan 46904 Petaling Jaya Selangor, MALAYSIA

Tel : +603 7955 7266 Email: publicconsulta:[email protected]

Public Consulta:on 3rd April – 3rd June 2012 2

PRODUCTIVITY AND REGULATION Produc:vity is the only driver of income growth that is unlimited, as opposed to resource exploita:on or increases in popula:on and labour force par:cipa:on, each of which faces natural limits. The poten:al for produc:vity growth to generate higher income for Malaysians makes it a natural and important considera:on for decision makers. As such the con:nuing need to s:mulate produc:vity rightly remains at the forefront of government policies. Regula:on is the lifeblood of a modern, well-‐func:oning economy. Almost all regula:ons have the poten:al to impact on produc:vity, either through the incen:ves which they provide to businesses to change opera:ng and investment decisions, or more directly through their impacts on compliance costs. It is inconceivable to think of a modern economy func:oning without regula:on. However, poor regula:on can cause frustra:on and unintended consequences, or simply add red tape that adds nothing useful to the economy.

PUBLICATION ENQUIRY

ISBN 978-983-2025-96-2


STAKEHOLDERS

KWPKB KKR

PUBLIC (OWNERS)

Public Consulta:on 3rd April – 3rd June 2012

We value stakeholders’ contribu:ons

3

PEMUDAH


PREFACE

The Government has requested a study on regulatory burdens placed on businesses (companies) in ‘Dealing with Construc:on Permits in Kuala Lumpur’ to be carried out. The objec:ve of the study is to iden:fy regulatory and non-‐regulatory op:ons that will reduce such burdens without compromising the achievement of the underlying policy objec:ves of the regula:ons. The permits under review are as per case study as stated by the World Bank’s ‘Ease of Doing Business: Dealing with Construc:on Permits’. It covers all procedures required to construct simple buildings – from planning submissions un:l obtaining connec:ons for water, sewerage and a fixed telephone line. This document presents the on-‐going study. It highlights the regulatory burdens and proposed op:ons as a moving forward strategy.


TABLE OF CONTENTS

Dealing with Construc:on Permits in Kuala Lumpur Public Consulta:on 3rd April – 3rd June 2012 5

Page

PREFACE 4

1 PROJECT OBJECTIVE 6

2 BACKGROUND 8

3 PROBLEM STATEMENTS 16

4 PROJECT METHODOLOGY 19

5 OPTION 21

APPENDICES 34

Public Consulta:on 3rd April – 3rd June 2012 Dealing with Construc:on Permits in Kuala Lumpur 6

1. PROJECT OBJECTIVE


PROJECT OBJECTIVE

To produce a working model in ‘Dealing with Construc:on

Permits in Kuala Lumpur’ for simple commercial buildings that

simplifies and significantly reduces the number of exis:ng

procedures, :me and cost (authori:es fees). The model must

be acceptable by all stakeholders.


NOTE: PHASE 1 of the project is to address SIMPLE COMMERCIAL BUILDINGS. The project will be extended to other buildings if proven successful.


2. BACKGROUND

SINGAPORE 1 4 3 5 14 8 2 4 1 12 2

HONG KONG 2 5 1 4 57 4 3 3 2 5 16

NEW ZEALAND 3 1 2 31 3 4 1 36 27 10 18

USA 4 13 17 17 16 4 5 72 20 7 15

DENMARK 4 31 10 13 11 24 29 14 7 32 9

THAILAND 17 78 14 9 28 67 13 100 17 24 51

MALAYSIA 18 50 113 59 59 1 4 41 29 31 47


WORLD BANK DOING BUSINESS RANKING


Country Ease of Doing Business Rank

Star:ng a Business

Dealing with Construc:on Permits

Gelng Electricity

Registering Property

Gelng Credit

Protec:ng Investors

Paying Taxes Trading Across Borders

Enforcing Contracts

Resolving Insolvency

Ref: World Bank Doing Business Website www.doingbusiness.org/rankings

Malaysia’s 2011 ranking was 111.

9

Figure 2.1: World Bank Doing Business Rankings.


PROCEDURE, TIME AND COST COMPARISONS


INDICATORS Kuala Lumpur

Average East Asia & Pacific

Average OECD

Hong Kong New Zealand

Singapore

PROCEDURE 32 22 17 6 6 11

TIME 161 159 152 67 64 26

COST (% of GNI) 125.0 99.1 45.7 17.8 34.4 18.1

Based on study conducted on simple buildings

Figure 2.2: Kuala Lumpur ‘s Current Model of Construc:on Permits.

NOTE: GNI per capita MALAYSIA is USD 7900 or RM24490 Source: World Bank Doing Business Website www.doingbusiness.org/rankings

Figure 2.2.1: Dealing with Construc:on Permits: Building a Warehouse


PERFORMANCE OF CURRENT MODEL IN KUALA LUMPUR


Number of PROCEDURES Wai:ng TIME COSTS (Fees) charged

NOTE: Based on study conducted on Current Model in Kuala Lumpur.

Figure 2.3: Details of Kuala Lumpur’s Current Model Performance .

DBKL56%

(18 procedures)SPAN (IWK)22%

(7 procedures)

BOMBA10%

(3 procedures)

NFP6%

(2 procedures)

SPAN (SYABAS)6%

(2 procedures)

Before Construction

75% (129 days)

During Construction8% (13 days)

After Construction9% (15 days)

Utilities Connection8% (14 days)

SPAN (IWK)65%(RM

20000)

DBKL30%

(RM 9350)

SPAN (SYABAS)

3% (RM1040)

BOMBA2%

(RM451)


PROCEDURES IN THE CURRENT MODEL


Start

NFPPlan

Verification

OSCDBKL

JKASRORRO

Bin

PPSPPAWaste

disposal sys.

JPIFMSMA &

SPAH

JPIFPJ

Earthwork

JRBBBuilding

Plan

BOMBAPlan

Endorsement

JPRBPlanning

Permission

JPRBLandscape Permission

JRPBHoarding & Signboard

JPIFPJ

Road & Drainage

JPIFPJ

Street Light

JPIFCar Park

JKAWSRoad

Excavation

JRBBForm B

(Building)

JPIFForm B

(Earthwork)

IWKSewerage Planning

IWKSewerage

Design

IWKCommencement

of Work

IWKInspection

Report

IWKInspection

JPIFRoad & Drainage

Inspection

JPIFRoad & Drainage

Approval

BOMBAInspection

BOMBAIssuance Letter

of Clearance

IWKTesting &

Commissioning

IWK Clearance

LAM/BEMDeposit

CCC

OSCDeposit

CCC

SYABASInspection

SYABASWater

Connection

NSPPhone

Connection

End

ConnectionTo Utilities

AfterConstruction

During Construction

BeforeConstruction

5 5

29 29 29 29 29 29 29 29 29 29

14 14 14

29 29 29 29 29 29 29 29 29 29 29 29 29 29 29 29

10 2 2

10 56

14 10

2 2

14 56 56 56 56 56 56 56 56 56 56 56 56 56 56 56 56

4 4 1 4 10 14 14 14 14 14 14 14 14 14 14 14

13 1

4 12

4 12

4 12 14 14 14 14 14

14 1

14 1

13 1

5 5 6 7 10

1 1

8 14

1 2

0 20 40 60 80 100 120 140 160 180

NFP Plan Verifica:on JPRB Planning Permission

JRBB Building Plan JPIF Earthwork

JPIF MISMA & SPAH JPRB Landscape Permission JRPB Hoarding & Signboard

JPIF Road & Drainage JPIF Street Light

JPIF Car Park JKAWS Road Excava:on

JKAS RORRO Bin PPSPA Waste disposal sys. BOMBA Plan Endorsement

IWK Sewerage Planning IWK Sewerage Design JRBB Form B (Building)

JPIF Form B (Earthwork) IWK Commencement of Work

IWK Insp. Report IWK Insp.

JPIF Road & Drainage Appr. JPIF Road & Drainage Insp.

BOMBA Issuance Leper of Clearance BOMBA Fire Safety Insp.

IWK Clearance IWK Tes:ng & Commissioning

Deposit CCC to OSC Deposit CCC to LAM/BEM SYABAS Water Connec:on

SYABAS Water Insp. NSP Phone Connec:on


DETAILED PERFORMANCE (Wai:ng TIME BY EACH PROCEDURE)

NOTE: Case study = Petrol Sta:on Project in Kuala Lumpur. TIME taken by authori:es is 161 calendar days.

Before Construc:on

During Construc:on

Arer Construc:on

U:li:es Connec:on


A REALITY


I write as an execu:ve of a company who, due to business expansion, has plans to invest in addi:onal produc:on and warehouse facili:es in both Malaysia and Thailand. My experience in undertaking these plans have been starkly different in both countries. The experience in Malaysia has been a tortuous journey in unraveling state authority and local town council red tape while the experience in Thailand has been one of speedy efficiency, much to my surprise and dismay, speaking as a Malaysian. Since acquiring a plot of industrial land, it is now 12 months and we have yet to receive our building plan approval. Along the way, we have had to deal with various red tape and mix-‐ups between the state authority and local town council. These range from different interpreta:ons of land :tle status between the state land authority and town council, and differing condi:ons to meet in order to obtain the building permit. The so-‐called One-‐Stop Centre or OSC, is only in name, and we have had to address various condi:ons across a range of departments. In this process, the ground rules and :me lines for approvals are not clear. This is very frustra:ng to an investor such as us, for whom efficiency and clear guidelines and :melines are important for investment decisions. Arer all, we are inves:ng almost RM100mil and providing direct employment opportuni:es for more than 500 people. I started on the process of inves:ng in a similar facility in Thailand with a similar investment and employment scale as the one in Malaysia, and the experience has been starkly contras:ng in terms of efficiency. Land :tle transfer only took two hours compared to three months here. Obtaining a building permit took only three months from design to piling. Despite commencing planning nine months later in Thailand, we are now ready to commence construc:on while we are s:ll having to unravel the bureaucracy in Malaysia. It is no wonder then that we are losing out on investment opportuni:es in Malaysia, despite our government officials palng themselves on the back for increased FDI. Our process is mired in bureaucracy and unclear ground rules, with liple napoleons in various state authori:es, town councils and departments adding to the confusion. I am both a corporate and a personal taxpayer and I am dismayed by the quality of state and town council work. I write as a concerned execu:ve managing investment plans and also as a born-‐and-‐bred Malaysian. I would not hesitate to invest in a foreign country with greater efficiency and clearer ground rules in future if this is the state of our local authority efficiency. DISMAYED INVESTOR, Petaling Jaya.

STAR, 28 DECEMBER 2011: RED TAPE A TURN-‐OFF

14


ON-‐GOING INITIATIVES

The government has implemented several ini:a:ves to improve efficiency

in dealing with construc:on permits. They include:

•  Cer:ficate of Comple:on and Compliance (CCC): Self regula:on (2007)

•  One-‐Stop-‐Centre (2007)

•  Online KUL Submission at DBKL (2010)

•  Guidelines for PSPs



3. PROBLEM STATEMENTS


PROBLEM STATEMENTS

The current model implemented in Kuala Lumpur has the following issues:

•  Too many procedures (interac:ons) between a business and authori:es

•  Long processing :me by authori:es in issuing permits

•  High fees charged by authori:es


NOTE: Es:mated compliance cost to business in Kuala Lumpur is RM 24 million per year.

17

What would be your suggestions to improve our performance? Please email your opinion to publicconsulta:[email protected]


4. PROJECT METHODOLOGY


PROJECT METHODOLOGY

•  Study the baseline of the CURRENT model

•  Benchmark with WORLD BEST PRACTICES

•  Redesign the CURRENT model to produce the PROPOSED model

•  Conduct a PUBLIC CONSULTATION with stakeholders

•  Finalise the PROPOSED model with considera:on of 100% online implementa:on

•  Carry out a CHANGE MANAGEMENT program

•  Implement the PROPOSED model (with con:nuous monitoring and improvement)



5. OPTION


Good REGULATORY prac:ce requires considera:on of the different OPTIONS for achieving the desired objec:ves. They include:

•  take no ac:on •  self-‐regula:on: produce educa:onal material

•  quasi-‐regula:on: produce guidelines

•  co-‐regula:on: produce mandatory standards

•  explicit government regula:on: amend the regula:ons •  Eliminate unnecessary requirements •  Streamline the implementa:on

NOTES


OPTION 1


To simplify the applica:on of simple buildings’ construc:on permits. (ref: Hong Kong, New Zealand, Singapore)

CURRENT MODEL

32 procedures

PROPOSED MODEL

12 procedures

Start

NFPPlan

Verification

OSCDBKL

JKASRORRO

Bin

PPSPPAWaste

disposal sys.

JPIFMSMA &

SPAH

JPIFPJ

Earthwork

JRBBBuilding

Plan

BOMBAPlan

Endorsement

JPRBPlanning

Permission



JPIFPJ

Road & Drainage

JPIFPJ

Street Light

JPIFCar Park

JKAWSRoad

Excavation

JRBBForm B

(Building)

JPIFForm B

(Earthwork)


IWKSewerage

Design

IWKCommencement

of Work

IWKInspection

Report

IWKInspection

JPIFRoad & Drainage

Inspection

JPIFRoad & Drainage

Approval

BOMBAInspection


of Clearance

IWKTesting &

Commissioning

IWK Clearance

LAM/BEMDeposit

CCC

OSCDeposit

CCC

SYABASInspection

SYABASWater

Connection

NSPPhone

Connection

End


AfterConstruction

During Construction

BeforeConstruction

Start

NFPPlan

Verification

OSCDBKL

JKASRORRO

Bin

PPSPPAWaste

disposal sys.

JPIFMSMA &

SPAH

JPIFPJ

Earthwork

JRBBBuilding

Plan

BOMBAPlan

Endorsement

JPRBPlanning

Permission



JPIFPJ

Road & Drainage

JPIFPJ

Street Light

JPIFCar Park

JKAWSRoad

Excavation

JRBBForm B

(Building)

JPIFForm B

(Earthwork)


IWKSewerage

Design

IWKCommencement

of Work

IWKInspection

Report

IWKInspection

JPIFRoad & Drainage

Inspection

JPIFRoad & Drainage

Approval

BOMBAInspection


of Clearance

IWKTesting &

Commissioning

IWK Clearance

LAM/BEMDeposit

CCC

OSCDeposit

CCC

SYABASInspection

SYABASWater

Connection

NSPPhone

Connection

End


AfterConstruction

During Construction

BeforeConstruction

Combine procedures

(OSC to accept submission

and issue approval)

Combine procedures(OSC to accept submission and IWK to issue approval)

Combine procedures(OSC to accept

notification and share information with IWK)

Change inspection before

approval to notification & risk-‐based inspection

Combine procedures (OSC to accept

notification and share information

with LAM/BEM)

❶ ❸

❷

❹

❺

❻

❼

❽

❾❿

⓫

⓬

Start

NFPPlan

Verification

OSCDBKL

JKASRORRO

Bin

PPSPPAWaste

disposal sys.

JPIFMSMA &

SPAH

JPIFPJ

Earthwork

JRBBBuilding

Plan

BOMBAPlan

Endorsement

JPRBPlanning

Permission



JPIFPJ

Road & Drainage

JPIFPJ

Street Light

JPIFCar Park

JKAWSRoad

Excavation

JRBBForm B

(Building)

JPIFForm B

(Earthwork)


IWKSewerage

Design

IWKCommencement

of Work

IWKInspection

Report

IWKInspection

JPIFRoad & Drainage

Inspection

JPIFRoad & Drainage

Approval

BOMBAInspection


of Clearance

IWKTesting &

Commissioning

IWK Clearance

LAM/BEMDeposit

CCC

OSCDeposit

CCC

SYABASInspection

SYABASWater

Connection

NSPPhone

Connection

End


AfterConstruction

During Construction

BeforeConstruction


QUESTIONS ON OPTION 1

QM1.2 Do you agree that the exis:ng procedures before construc:on approval issuances at DBKL, which involve various units and BOMBA be combined into ONE PROCEDURE?


QM1.1 Do you agree that the exis:ng func:on of the Network Facility Provider Pre-‐valida:on procedure at this stage be eliminated?

Start

NFPPlan

Verification

OSCDBKL

JKASRORRO

Bin

PPSPPAWaste

disposal sys.

JPIFMSMA &

SPAH

JPIFPJ

Earthwork

JRBBBuilding

Plan

BOMBAPlan

Endorsement

JPRBPlanning

Permission



JPIFPJ

Road & Drainage

JPIFPJ

Street Light

JPIFCar Park

JKAWSRoad

Excavation

JRBBForm B

(Building)

JPIFForm B

(Earthwork)


IWKSewerage

Design

IWKCommencement

of Work

IWKInspection

Report

IWKInspection

JPIFRoad & Drainage

Inspection

JPIFRoad & Drainage

Approval

BOMBAInspection


of Clearance

IWKTesting &

Commissioning

IWK Clearance

LAM/BEMDeposit

CCC

OSCDeposit

CCC

SYABASInspection

SYABASWater

Connection

NSPPhone

Connection

End


AfterConstruction

During Construction

BeforeConstruction


QUESTIONS ON OPTION 1 (cont.)

QM1.4 Do you agree that the following procedures be combined into ONE NOTIFICATION procedure? -‐ Jabatan Rekabentuk Bandar & Bangunan (Form B (Building)) -‐ Jabatan Perancangan Infrastruktur (Form B (Earthwork)) -‐ Indah Water Konsor:um (Commencement of Work)


QM1.3 Do you agree that the exis:ng process involving Indah Water Konsor:um (IWK)(Planning) and (Design) be combined into one procedure? Do you agree that this submissions is only made through OSC?

Start

NFPPlan

Verification

OSCDBKL

JKASRORRO

Bin

PPSPPAWaste

disposal sys.

JPIFMSMA &

SPAH

JPIFPJ

Earthwork

JRBBBuilding

Plan

BOMBAPlan

Endorsement

JPRBPlanning

Permission



JPIFPJ

Road & Drainage

JPIFPJ

Street Light

JPIFCar Park

JKAWSRoad

Excavation

JRBBForm B

(Building)

JPIFForm B

(Earthwork)


IWKSewerage

Design

IWKCommencement

of Work

IWKInspection

Report

IWKInspection

JPIFRoad & Drainage

Inspection

JPIFRoad & Drainage

Approval

BOMBAInspection


of Clearance

IWKTesting &

Commissioning

IWK Clearance

LAM/BEMDeposit

CCC

OSCDeposit

CCC

SYABASInspection

SYABASWater

Connection

NSPPhone

Connection

End


AfterConstruction

During Construction

BeforeConstruction



QM1.6 Do you agree that arer construc:on, the following Jabatan Perancangan Infrastuktur of DBKL procedures be combined into ONE NOTIFICATION procedure? -‐ Road and Drainage Inspec:on

-‐ Road and Drainage Approval


QM1.5 Do you agree that the exis:ng procedures of Indah Water Konsor:um [Inspec:on Report] and [Inspec:on] during construc:on period be eliminated through implementa:on of 100% CCTV inspec:on during tes:ng and commissioning (final) inspec:on?

Start

NFPPlan

Verification

OSCDBKL

JKASRORRO

Bin

PPSPPAWaste

disposal sys.

JPIFMSMA &

SPAH

JPIFPJ

Earthwork

JRBBBuilding

Plan

BOMBAPlan

Endorsement

JPRBPlanning

Permission



JPIFPJ

Road & Drainage

JPIFPJ

Street Light

JPIFCar Park

JKAWSRoad

Excavation

JRBBForm B

(Building)

JPIFForm B

(Earthwork)


IWKSewerage

Design

IWKCommencement

of Work

IWKInspection

Report

IWKInspection

JPIFRoad & Drainage

Inspection

JPIFRoad & Drainage

Approval

BOMBAInspection


of Clearance

IWKTesting &

Commissioning

IWK Clearance

LAM/BEMDeposit

CCC

OSCDeposit

CCC

SYABASInspection

SYABASWater

Connection

NSPPhone

Connection

End


AfterConstruction

During Construction

BeforeConstruction



QM1.7 Do you agree to a single-‐point deposit of CCC through OSC? (LAM /LJM will receive their copies via OSC).



ENABLER 1

To classify buildings into 3 risk-‐based category. (ref: New Zealand)

•  Commercial 1 (low risk) -‐ easier permits issuance procedures, faster and cheaper.

•  Commercial 2 (medium risk)

•  Commercial 3 (high risk) -‐ more permits issuance procedures


NOTE: Currently buildings are not classified. Each agency evaluates submission based on agency’s own parameters. You are welcome to discuss parameters cons:tutes in this risk-‐based classifica:on.

COMMERCIAL 1

COMMERCIAL 2

COMMERCIAL 3


QUESTIONS ON ENABLER 1

QE1.1 Do you agree with the recommended risk-‐based classifica:ons (commercial 1, commercial 2, commercial 3) ?

QE1.2 Do you agree that the number of procedures should vary according to the classifica:ons?



ENABLER 2

To implement ‘SELF-‐REGULATORY’ environment. (ref: New Zealand, Singapore) •  Shiring CONTROLS from before to arer construc:on with guidelines. •  Strengthening ENFORCEMENT by authori:es through random sampling (risk based). §  Adap:ng COMPLIANCE PYRAMID of Enforcement Responses developed by Ayres I.

and Braithwaite J.


Current Model Proposed Model PSPs must re-‐submit if not in compliance with requirement. (minor non-‐compliance)

PSPs con:nue to construct the building arer receiving comments from authori:es. 100% check made within the defect liability period.

Quality control is totally dependent on inspec:ons

PSPs is responsible for ensuring regula:on compliance and quality.

100% inspec:ons prior to issuance of CCC.

Inspec:ons are based on a risk-‐based system. The inspectorate maintains a database of sufficient details to track risks by sectors and businesses, and targets inspec:ons at those ac:vi:es and firms where risks are highest.


ENABLER 2 (Cont.)


Figure 5.1: Compliance Pyramid.

Ref: New Zealand’s 2007 Inland Tax Annual Report.

Figure 5.2: A Pyramid of Enforcement Responses. Source: Ayres I. and Braithwaite J., Responsive Regula:on: Transcending the Deregula:on Debate. New York: Oxford University Press, 1992


QUESTIONS FOR ENABLER 2

QE2.1 Do you agree that the 100% inspec:on by authori:es as currently prac:sed can ensure quality?

QE2.2 Do you agree that inspec:ons should be reduced or eliminated?

If YES, please give your reasons.



ENABLER 3


To implement 100% online system. (ref: Singapore)

CURRENT MODEL

(KUL SUBMISSION) Based on Current OSC Online.

For all applica:ons (full / par:al submission)

PROPOSED MODEL

100% online, KPI Driven, Transparency, Dedicated to Simple Buildings, Full Submission.


QUESTION FOR ENABLER 3

QE3.1 Do you agree with the usage of 100% on-‐line submission?


MyECP

JPBB JRBB

JPIF

JKAS

OSC

BOMBA

IWK LAM

LJM

SKMM

SYABAS

KWPKB

KETHA

SPAN

KPKT

KKR

SKMM CIDB

PSPs

Note: All stakeholders use 100% online system. PSPs can submit from their offices. Approving agencies approve online. Approval status can be monitored online or no:fied to PSPs. KPI reports are easily generated. Value added repor:ng can be obtained by stakeholders. Accessible via majority devices such as PCs, laptops, iPad, tablet PCs, etc.


APPENDICES


WORLD BANK’S CASE STUDY


Assump.ons about the construc.on company The business (BuildCo): •  Is a limited liability company. •  Operates in the economy’s largest business city. •  Is 100% domes:cally and privately owned. •  Has 5 owners, none of whom is a legal en:ty. •  Is fully licensed and insured to carry out

construc:on projects, such as building warehouses.

•  Has 60 builders and other employees, all of them na:onals with the technical exper:se and professional experience necessary to obtain construc:on permits and approvals.

•  Has at least 1 employee who is a licensed architect and registered with the local associa:on of architects.

•  Has paid all taxes and taken out all necessary insurance applicable to its general business ac:vity (for example, accidental insurance for construc:on workers and third-‐person liability).

•  Owns the land on which the warehouse is built.

Assump.ons about the warehouse The warehouse: •  Will be used for general storage ac:vi:es, such as storage

of books or sta:onery. The warehouse will not be used for any goods requiring special condi:ons, such as food, chemicals or pharmaceu:cals.

•  Has 2 stories, both above ground, with a total surface of approximately 1,300.6 square meters (14,000 square feet). Each floor is 3 meters (9 feet, 10 inches) high.

•  Has road access and is located in the periurban area of the economy’s largest business city (that is, on the fringes of the city but s:ll within its official limits).

•  Is not located in a special economic or industrial zone. The zoning requirements for warehouses are met by building in an area where similar warehouses can be found.

•  Is located on a land plot of 929 square meters (10,000 square feet) that is 100% owned by BuildCo and is accurately registered in the cadastre and land registry.

•  Is a new construc:on (there was no previous construc:on on the land).

•  Has complete architectural and technical plans prepared by a licensed architect.

•  Will include all technical equipment required to make the warehouse fully opera:onal.

•  Will take 30 weeks to construct (excluding all delays due to administra:ve and regulatory requirements).

Assump.ons about the u.lity connec.ons The water and sewerage connec:on: •  Is 10 meters (32 feet, 10 inches) from the

exis:ng water source and sewer tap. •  Does not require water for fire protec:on

reasons; a fire ex:nguishing system (dry system) will be used instead. If a wet fire protec:on system is required by law, it is assumed that the water demand specified below also covers the water needed for fire protec:on.

•  Has an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day.

•  Has a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.

•  Will have a constant level of water demand and wastewater flow throughout the year.

•  The telephone connec:on: •  Is 10 meters (32 feet, 10 inches) from the main

telephone network. •  Is a fixed telephone line.

Source: hpp://www.doingbusiness.org/methodology/dealing-‐with-‐construc:on-‐permits




Illustra:on A.1: Warehouse’s plan

14,000 sq ftLevel 1

Level 2Office

Land plot: 10,000 sq ft




PROCEDURE A procedure is any interac:on of the company’s employees or managers with external par:es, including government agencies, notaries, the land registry, the cadastre, u:lity companies, public and private inspectors and technical experts apart from in-‐house architects and engineers. Interac:ons between company employees, such as development of the warehouse plans and inspec:ons conducted by employees, are not counted as procedures. Procedures that the company undergoes to connect to water, sewerage and telephone services are included. All procedures that are legally or in prac:ce required for building a warehouse are counted, even if they may be avoided in excep:onal cases (table A.1).

TIME Time is recorded in calendar days. The measure captures the median dura:on that local experts indicate is necessary to complete a procedure in prac:ce. It is assumed that the minimum :me required for each procedure is 1 day. Although procedures may take place simultaneously, they cannot start on the same day (that is, simultaneous procedures start on consecu:ve days). If a procedure can be accelerated legally for an addi:onal cost, the fastest procedure is chosen. It is assumed that BuildCo does not waste :me and commits to comple:ng each remaining procedure without delay. The :me that BuildCo spends on gathering informa:on is ignored. It is assumed that BuildCo is aware of all building requirements and their sequence from the beginning.

COST Cost is recorded as a percentage of the economy’s income per capita. Only official costs are recorded. All the fees associated with comple:ng the procedures to legally build a warehouse are recorded, including those associated with obtaining land use approvals and preconstruc:on design clearances; receiving inspec:ons before, during and arer construc:on; gelng u:lity connec:ons; and registering the warehouse property. Nonrecurring taxes required for the comple:on of the warehouse project are also recorded. The building code, informa:on from local experts and specific regula:ons and fee schedules are used as sources for costs. If several local partners provide different es:mates, the median reported value is used.

Source: hpp://www.doingbusiness.org/methodology/dealing-‐with-‐construc:on-‐permits

KWPKB

MODERNISING BUSINESS REGULATION PROJECT

‘DEALING WITH CONSTRUCTION PERMITS IN KUALA LUMPUR’

The World Bank’s ‘Ease of Doing Business’ study (2012) ranked our country MALAYSIA at 113th out of 183 countries in Dealing with Construc:on Permits. The scope of THIS study covered simple commercial projects in Kuala Lumpur. The parameters studied include number of interac:on (procedure), :me taken and cost (fee) by authori:es. Our MALAYSIAN GOVERNMENT is concerned with the outcome of this study. The current environment hinders development and results in ‘opportunity loss’ in direct investment. The government has started a TRANSFORMATION PROJECT with the main objec:ve to design, build and implement a new working model that is acceptable to all stakeholders. It should dras:cally simplify and reduce procedures and :me taken. The Government believes that MALAYSIANS with the spirit of ‘MALAYSIA BOLEH’ can make this happen! A successful implementa:on of the new model would result in the improvement of our na:on’s produc:vity and compe::veness. Such improvement will contribute towards boos:ng our prosperity. The government wants to listen to your opinion. Simply click ‘My Opinion’ or email to us.

Public Consulta:on Paper World Bank Doing Business Ranking Methodology in Dealing with Construc:on Permit

MORE INFORMATION

WE VALUE YOUR OPINION

Let’s develop MALAYSIA together!

My Opinion

email to : [email protected]

PUBLIC CONSULTATION 3rd April – 3rd June 2012

KKR

Which model do you prefer? Maintain the current model Small change to current model

Dras:c change to current model Implement 100% online

Visitors

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www.mpc.gov.my/publicconsulta:on

OR EMAIL TO

publicconsulta:[email protected]

WE VALUE YOUR OPINION @

ISBN 978-983-2025-96-2


QUESTIONNAIRES

QM1.1 Do you agree that the exis:ng func:on of the Network Facility Provider Pre-‐valida:on procedure at this stage be eliminated?

QM1.2 Do you agree that the exis:ng procedures before construc:on approval issuances at DBKL, which involve various units and BOMBA be combined into ONE PROCEDURE.

QM1.3 Do you agree that the exis:ng process involving Indah Water Konsor:um (IWK)(Planning) and (Design) be combined into one procedure? Do you agree that this submission is only made through OSC?

QM1.4 Do you agree that the following procedures be combined into ONE NOTIFICATION procedure? -‐ Jabatan Rekabentuk Bandar & Bangunan [Form B (Building)] , Jabatan Perancangan Infrastruktur (Form B (Earthwork)) and Indah Water Konsor:um [Commencement of Work]

QM1.5 Do you agree that the exis:ng procedures of Indah Water Konsor:um Inspec:on during construc:on period be eliminated through implementa:on of 100% CCTV inspec:on during tes:ng and commissioning (final) inspec:on?

QM1.6 Do you agree that arer construc:on, the following Jabatan Perancangan Infrastuktur of DBKL procedures be combined into ONE NOTIFICATION procedure?

-‐ (Road and Drainage Inspec:on) and (Road and Drainage Approval ) QM1.7 Do you agree to a single-‐point deposit of CCC through OSC? (LAM /LJM will receive their copies via OSC). QE1.1 Do you agree with the recommended risk-‐based classifica:ons (commercial 1, commercial 2, commercial 3)? QE1.2 Do you agree that the number of procedures should vary according to the classifica:ons? QE2.1 Do you agree that 100% inspec:on by authori:es as currently prac:sed can ensure quality? QE2.2 Do you agree that inspec:ons should be reduced or eliminated? QE3.1 Do you agree with the usage of 100% on-‐line submission?

YES NO QUESTIONS

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