Public Consultation On The New Model To Improve Efficiency In Dealing With Construction Permits In Kuala Lumpur

Bismillaahirrahmanirrahim

Assalammualaikum warahmatullahi wabarakaatuh, Salam Sejahtera dan Salam 1Malaysia

YBhg Dato’ Ahmad Phesal bin Hj. Talib , Secretary General
Ministry of Federal Territory and Urban Wellbeing, and
Chairman of the Focus Group On Dealing With Construction Permits in Kuala Lumpur

YBhg Tan Sri Yong Poh Kon
Co-chair of PEMUDAH

YBhg. Tan Sri Ahmad Fuad Ismail, Datuk Bandar Kuala Lumpur

YBhg. Dato’ Mohd Razali Hussain
Director-General, Malaysian Productivitity Centre, MPC

Ketua Setiausaha-Ketua Setiausaha Kementerian, Ketua-Ketua Jabatan

YBhg. Tan Sri-Tan Sri, Dato’ Sri-Dato’ Sri, Datuk-Dato’, Tuan-Tuan dan Puan-Puan.

Para hadirin yang dihormati sekalian.

Pertamanya marilah kita memanjatkan kesyukuran ke hadrat Allah SWT atas limpah rahmat dan izin Nya kita dapat bersama-sama hadir di dalam sesi pada pagi ini.

2. Thank you very much for your kind presence in this public consultation on dealing with construction permits. I acknowledge that all of you have very busy schedules and I thank you for taking the time and effort to attend this session. Your presence here signifies your determination and willingness to collaborate to spearhead Malaysia, our country to greater heights towards becoming a high income economy.

Ladies and Gentlemen,

3. Five years ago on 7 February 2007 when we established PEMUDAH, the goal was to improve the ease of doing business in Malaysia and to enhance our nation’s overall competitiveness and attractiveness as an investment destination. The efficacy of PEMUDAH lies in its close public and private sector collaboration, in setting changes to address issues on public service delivery to further improve the business environment in Malaysia.

4. The World Bank’s “Doing Business Report” serves as the basis for PEMUDAH’s work. Though we are not driven by the rankings alone, it provides us with the opportunity to see how much we have progressed and more importantly, the effectiveness of our initiatives. From the “Doing Business Report”, we are able to gauge Malaysia’s efforts in comparison with other nations to see where we stand and what needs to be done to further improve ourselves.

5. The Doing Business Report 2012 ranked Malaysia 18th, up 5 notches from 23rd in 2011. PEMUDAH has contributed significant improvements to the many indicators:

a. Starting a business to 50th from 111th;

b. Enforcing Contracts to 31st from 60th;

c. Resolving Insolvency to 47th from 57th; and

d. Malaysia is no. 1 in Getting Credit and 4th in Protecting Investors.

6. While these improvements were recorded by the World Bank, the Dealing with Construction Permits indicator showed a decline. As Dato’ Phesal said, we dropped to 113th from 111th despite many improvements undertaken by various agencies.

7. What are the factors that hinder the improvement? Where are the choke points? Is it a policy or implementation issue? These questions need to be deliberated in this session.

8. Sun Tzu in his book The Art of War wrote: “Know yourself and know your enemy, you can fight a hundred battles without disaster”.

9. I have been informed that the Focus Group has conducted a comprehensive study to understand the existing regulatory burden on business in getting approvals for construction permits. Key issues identified are:

a. Too many interactions between a business and authorities (32 procedures were identified instead of 22 as highlighted by the World Bank Report);

b. Long processing time by authorities in issuing permits (Time taken to approve applications ranged between 172-350 days, more than a year from submission of planning approval to connection of utilities. Singapore: 26 days);

c. High fees charged by authorities (125% of GNI as compared to Singapore: 18.1% of GNI).

10. Concurrently, a benchmarking study to Singapore (Ranks 3rd in Dealing with Construction Permits) was conducted in March 2012. Through this exercise, common features of global good practices for efficiency observed are:

a. Risk-based system. This allows efforts to concentrate on more complex projects, while ensuring fast approvals in obtaining permits in smaller construction projects;

b. Building codes. Efficient regulation starts with a uniform building code and uniform implementation of the building code;

c. One-stop shop. This improves the organisation of the review process by better coordinating the efforts of different agencies; and

d. Online services. They reduce physical interaction and reduce bureaucracy.

11. We need a new model, a radical change in the construction permits framework. We need a framework that protects public health, safety, and environment while promoting economic growth, innovation, competitiveness, and job creation. This new framework:

a. must be based on the best available science and the best available practise;

b. It must promote predictability and reduce uncertainty;

c. It must identify and use the best, most innovative and least burdensome tools for achieving regulatory ends;

d. It must ensure that laws, guidelines and code of practices are accessible, consistent, written in plain language, and easy to understand; and finally

e. It must measure, and seek to improve, the actual results of regulatory requirements.

12. The new model shall be based on the open exchange of information and perspectives among agencies, experts in the construction industry, affected stakeholders in the private sector, and the public as a whole. Today’s public consultation is to ensure public participation in designing the new model.

13. This morning all of you will have the opportunity to listen from distinguished panelists, coming from the public and private sectors, on ideas to improve efficiency in dealing with construction permits in Kuala Lumpur. God willing let it be universalized for the whole nation.

14. We should not just be talking and deliberating. We should also be implementing and making things happen. The Government is committed to modernise not just the regulatory framework of construction permits, but also other regulations to make Malaysia a better place to do business, and a better place for us to live.

15. We will do it, and we will do it together, and I believe with everyone’s participation we shall succeed.

16. I thank all of you again for your time and attention and wish all of you a fruitful session.

Thank you.