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Individual Country Observational Study Mission (I-OSM) on Best Practices
Regulation in Taiwan
POST VISIT REPORT
29 October 2014
2
Contents
1.0 Background 1
1.1 Present Situation 2
1.2 PEMUDAH FGDCP Charted A Radical Change In The Construction Permit Framework
3
2.0 Problem Encountered In Dealing With Construction Permits
4
2.1 Remedial Measures For Kuala Lumpur 6
2.2 Remedial Measures For Other Local Governments In Malaysia
9
3.0 Highlights of The Study Mission 12
4.0 Lessons Learnt and Adoption of Best Practices 21
5.0 Moving Forward 25
6.0 Concluding Remarks 27
Appendix 1 - Questionnaires to Taiwan Organisations 30
Appendix 2 - Questions from Malaysian Delegates 34
Appendix 3 - Questionnaires for Taiwan Power Company 36
3
1.0 BACKGROUND
The Malaysian delegation of 12 participants from Focus Group
Dealing with Construction Permits (FGDCP) comprising members from
Malaysia Productivity Corporation (MPC), Ministry of Urban Wellbeing,
Housing and Local Government (KPKT), Energy Commission (ST),
Kuala Lumpur City Hall (DBKL), Iskandar Regional Development
Authority (IRDA), Tenaga Nasional Berhad (TNB), Professional
Architect and Engineer had the opportunity to participate in the Asian
Productivity Organisation (APO) Individual Country Observational Study
Mission (I-OSM) on Best Practices Regulation in Taiwan.
2nd
September 2014 at CPC Office
The mission members are from the implementing agencies,
professional companies and policy makers. The I-OSM aims to give
APO member countries to study and observe recent developments and
best practices in particular area of interest, that of Dealing Construction
Permits (DCP) methodology framework. This mission mainly focused
on how local authority in Taipei manages their One Stop Centre (OSC);
communication between OSC and technical agencies; granting of
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approvals by the utility providers; township planning; and gaining better
understanding on how professionals deal with regulators in Taipei. The
study measures procedure, time and cost to construct a building It
covers all procedures required to construct simple buildings – from
planning submissions until the building is ready for occupancy, time
approve application and cost of all fees.
1.1 PRESENT SITUATION
Comparison between Malaysia’s Dealing with Construction
Permits performance with Taiwan
Indicator Taiwan
DB 2014 Malaysia DB 2014
Malaysia DB 2013
Malaysia DB 2012
Top Performer
Dealing with Construction Permits (rank)
7 43 96 113 Hong Kong
Procedures (number)
10 15 37 22 Hong Kong
(6)
Time (days) 94 130 140 260 Singapore
(26)
Cost (% of income per capita)
15.9 14.7 17.5 7.1 Qatar (1.1)
Source: Doing Business, World Bank
Dealing with construction permits is one of the indicators reported in the
World Bank’s Ease of Doing Business. It records procedural
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requirements for a business in the construction industry to build a
standardised warehouse. Ranking is based on 3 indicators - Time:
Days to build a warehouse in main city; Cost: As % of income per
capita and Procedures: Regulatory submissions, obtainment of
construction permits, receiving inspections and utility connections.
Formalities before construction begins are the most time-consuming
and costly part of dealing with construction permits. In Doing Business
2014, it was highlighted that over the past five years, the most common
feature of reforms is streamlining project clearances. Building approvals
tend to require technical oversight by multiple agencies and one way to
simplify this process is by establishing one-stop shops. However the
success of one-stop shops depends on good coordination among all
agencies involved and often requires overarching legislation that
ensures information sharing and established oversight mechanisms to
minimise cases of non-compliances.
1.2 PEMUDAH FGDCP CHARTED A RADICAL CHANGE IN THE
CONSTRUCTION PERMIT FRAMEWORK
The PEMUDAH Focus Group on Dealing with Construction Permits
(FGDCP) has been working together with both the public and private
stakeholders including building professionals and experts to identify
issues and challenges propose winning solutions and implement
various improvement initiatives. Among the engagement sessions
include workshops, benchmarking missions, public consultations as
well as a special engagement with an expert from the World Bank.
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2.0 PROBLEM ENCOUNTERED IN DEALING WITH
CONSTRUCTION PERMITS
From September 2012 to 31 October 2012, a series of workshops were
conducted in 16 capital cities (Putrajaya, Labuan, Pulau Pinang, Ipoh,
Alor Setar, Kangar, Melaka, Johor Bahru, Kuala Terengganu, Kota
Bharu, Kuantan, Kuching, Kota Kinabalu, Shah Alam and Seremban).
Information on the number of procedures, time and cost involved for an
investor to obtain a construction permit for a PETRONAS station were
captured. The objectives are to reduce or eliminate irrelevant
procedures, improved on those procedures deemed inefficient and
ineffective and identify major constraints, as well as consolidate and
enhance all construction permit transactions for all cities and districts in
Peninsular Malaysia to ensure coherence and consistency of regulatory
practice in construction permitting and to make recommendations on
the improvement initiatives to ease dealing with construction permits in
capital cities.
FGDCP Members
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What it takes to comply with formalities to build a Petrol Station in 16
Capital Cities.
Baseline Mapping in 16 Capital Cities (2012)
Rank City Procedure Time (days) Cost (RM)
1. Kangar 20 80 6,691
2. Kuala Terengganu 41 89 8,988
3. Kota Bharu 48 89 14,122
4. Kuching Utara 34 218 3,739
5. Labuan 57 111 8,356
6. Seremban 52 64 25,280
7. Putrajaya 80 129 8,001
8. Kuala Lumpur 37 140 30,676
9. Shah Alam 55 106 25,280
10. Kuantan 59 135 12,335
11. Melaka 57 135 30,065
12. Kota Kinabalu 40 278 46,241
13. Alor Setar 51 262 22,169
14. Georgetown 41 196 407,814
15. Ipoh 58 306 10,914
16. Johor Bahru 66 192 18,161
Among the findings - High number of procedures continues to be a
challenge for business; Wide variation in quality of regulation across the
cities points to ample opportunities for further regulatory improvement;
Cities can learn from the existing good practices of Kuala Lumpur; and
Existing OSC and Inspection methodology can be further streamlined.
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2.1 REMEDIAL MEASURES FOR KUALA LUMPUR
On 1st June 2012, the fast track approval for small-scale non-residential
projects known as “OSC 1 Submission” was launched, covering
concurrent submissions of planning permission plans, buildings plans,
engineering plans, fire safety plans and utility plans, which required only
10 procedures and take 100 days to obtain approval. Malaysia made
the process to obtain construction permits easier by introducing
Standard Guidelines, categorizing risk-based and self-regulatory
inspection system and improving the operational features of the existing
One Stop Centre for building permits.
a. Improvement in One Stop Centre
City Hall of Kuala Lumpur (DBKL) has further improved the
implementation of the One Stop Centre for construction permits
by introducing OSC 1 Submission launched under Circular
No.1/2012 dated 4 May 2012 issued by the Secretary General,
Ministry of Federal Territories and Urban Wellbeing. This circular
came into force on 1 June 2012. The One Stop Centre includes
a single window for pre-construction and post-construction
approvals.
b. Introduction of Risk-Based Development
Circular No.1/2012 makes it mandatory for architects to submit
and obtain permits via the improved One Stop Centre for
buildings which meet the criteria for OSC 1Submission. With
new regulation, builders became responsible for inspections on
Road and Drainage and Sewerage during construction. This
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results in simplified procedures, shorter processing time and
speedier approvals.
c. Simplification of statutory requirements
Kuala Lumpur City Hall issued Standard Guidelines for the
construction of protective hoarding and construction
signboard in May 2012. With these guidelines, builders are
not required to obtain permits for constructing hoarding and
signboard or to pay processing fee for these respective
approvals.
In addition, Kuala Lumpur City Hall has eliminated the
requirement to obtain permit for dust bin (RORO Bin) before
construction starts. It is now the responsibility of the builder
to engage a registered contractor to dispose construction
debris from the site. With this initiative, the number of
interactions between architects/builders and Kuala Lumpur
City Hall has been reduced.
On-going initiatives included implementing best practices by
empowering the private sector in the process and in approving the
application; to implement a 100% online system for main processes; to
enhance the coordination efficiency of the technical agencies at OSC
DBKL; to implement a Merit/Demerit System to prevent misdemeanor
by the Submitting Person; to monitor the processing time of approval by
all technical agencies, adhering to the agreed time frame, to monitor the
processing time of approval by all technical agencies, adhering to the
agreed time frame; to integrate the payment system into the online
system that will be developed; and to promote the model of enhancing
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efficiency in Dealing with Construction Permits to other major cities in
Malaysia.
Station Penchala Link- Showcase Success of OSC1 Submission
for Speedier Approval
The introduction of OSC1 Submission serves as a gateway for
seeking approvals for the construction of low-risk commercial
projects. OSC1 Submission has resulted in a significant reduction in
both the number of processes/procedures and time taken for such
approvals to be granted from 37 procedures requiring 140 days to
only 10 procedures requiring 100 days. OSC1 Submission was put
to test on the ground with a pilot study for constructing the new
PETRONAS Station Penchala Link (Arah Damansara). The pilot test
revealed that that the approval to develop the PETRONAS KM 2.95
Penchala Link (Arah Damansara) was made easier and faster with
the new OSC1 Submission and cost savings were realised with the
reduction in procedures. Estimated savings of RM20,000 were made
possible as previously, Principal Submitting Person (PSP) had to
interact an average of 37 times with different government
departments before approvals were granted.
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2.2 REMEDIAL MEASURES FOR OTHER LOCAL GOVERNMENTS
IN MALAYSIA
Rolling out DCP framework to all local governments
With the success of the OSC 1 Submission for small-scale non-
residential development, the way forward was to roll out the Dealing
with Construction Permits Framework to all localities, continuously
monitor and evaluate its transformation and adapting best practices
through international benchmarking. Further strengthening of the permit
approval procedures through public and private consultation forums and
collaboration are continuously being held to ensure that regular
feedback and views are taken into account for continuous improvement
and promotion of good regulatory practices in Malaysia.
New Model of OSC 3.0 to be effective from 1 June 2014
Improvements achieved in Kuala Lumpur were incorporated into the
new OSC 3.0 model. The OSC 3.0 model also integrates international
good practices and is in line with the World Bank’s methodology on
regulating permitting procedures and regulations in main cities. Six
processes focused upon are data collection,consideration for approval,
notification of commencement of building works, interim inspection, final
inspection and certificate of fitness for occupation.
Among the benefits in implementing OSC 3.0 : Streamlined procedures
and improved transparency on permitting requirements; enhanced
efficiency of all parties involved; reduced compliance costs to investor,
attract more investment and increased employment opportunities.
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Promoting national consistency
Circulars to incorporate and adapt OSC 3.0 elements in the state’s
respective permitting procedures have been issued. The state authority
shall be monitoring their compliance to OSC 3.0 process and
procedures. In particular seminars were organised for Principal
Submitting Person-PSP and Submitting Person-SP from March-May
2014. Briefings for a better understanding and appreciation of OSC 3.0
have been conducted for all local authorities in Malaysia.
Lauding Taiwan for Progress Made in DCP
The World Bank report pointed out that Taiwan’s improvements in
business convenience includes the simplification of application
procedures for construction permits, with one-stop service making
application vastly easier. This improvement boosted Taiwan from 76th
place to 9th place in the dealing with construction permits sub-index. In
Doing Business 2013, Taiwan made the biggest improvement in the
ease of dealing with construction permits in the past year. This was
brought about by the introduction of a risk-based and self-regulatory
inspection system and improved operational features of the one-stop
centre for building permits.
In Taiwan, the authorities have created a friendly business
environment. One Stop Centre (OSC) was formed on 1 March 2012 to
give fast approval if the new development meets certain criteria
(building of warehouse, factory and office below 5-storey and the
construction is not in a sensitive area). The OSC has streamlined all
procedures (10) and forms; and shortened the time processing (94
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days). A joint inspection has been carried out to reduce interaction with
the owner or consultant at site. The appointed architect for the project
will review all plans and Taipei City Government will expedite the
building permit approval.
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3.0 HIGHLIGHTS OF THE STUDY MISSION
1) Visit to China Productivity Center (CPC)
In the context of the nation’s industrial development and
transformation, CPC acts as a bridge between Government and
the private sector, helping firms and industries in creating value to
raise national competitiveness. The role of CPC is very much
similar to MPC, which is coordinating for improvement of the
regulatory system to ease business process.
The National Development Council of Taiwan is fully in charge of
Ease of Doing Business (EODB) Projects. CPC offers productivity
courses to understand various issues related to doing business
and utilises various productivity tools to facilitate problem-solving.
Taiwan’s global Ease of Doing Business ranking which has gone
up from 61st in 2008 to 16th in 2013 could be attributed to its five
year reforms in various areas of Doing Business.
2) Visit to the Construction and Planning Agency, Ministry of the
Interior (CPAMI)
CPAMI was established under the Ministry of the Interior of
Taiwan on 2nd March, 1981. The Agency is the central
government authority responsible for national spatial resource
planning, utilisation, and management. The agency is also in
charge of upgrading construction management and administration
management as well as the professional techniques used in
construction engineering.
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Role of CPAMI is equivalent to Malaysia’s KPKT’s role, among
others is responsible for the planning and regulation of
construction. In Taiwan, land matters have to be cleared before
submitting to OSC to get Building Permit, while joint inspection by
regulatory agency is implemented. In Taiwan the local
governments issue Usage Licence (CF in Malaysia before 2007).
Projects are divided into few classifications based on types of
building and requires only one set of plans for submission.
3) Site Visit to Taipei Utility Common Duct
In Malaysia Utility Trenching in only implemented in Putrajaya.
However the common utility duct concept is implemented
throughout Taiwan as a joint collaboration project between
Government and the utility companies. The cost of construction is
1/3 paid by Government and the remaining 2/3 paid by the utilities
company. There are almost 10 common-ducts in Taiwan mostly
in Taipei. The 2 types: Block (cheap and inconvenient for public–
using open cut method) and Tunnel – faster and costly
(implemented together with MRT project). While the utility
companies pay maintenance fee, the Taipei City Government
maintains the common duct. The advantages of common utility
duct:
i. no digging,
ii. improve traffic condition,
iii. avoid road / site obstruction
iv. avoid dust,
v. ease of maintenance & emergency handling
vi. improve government image.
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One of the most critical issues faced during construction in the
urban context is relocation, upgrading and connection of the
existing utility lines. Very often this work causes inconvenience to
the public in terms of excavation and service disruption. Having a
common utility duct will eradicate the issues. Various utility lines
can be properly organized and distributed to the consumers.
However, the cost of building this common duct is relatively high.
In Malaysia’ context, where utilities are provided by private
companies, the cost sharing element and maintenance issue may
be a primary obstacle for this project to be realised.
4) Visit to Taipei City Government (equivalent to DBKL)
Started OSC in 2012 for projects below 2-storey and now has
expanded to 5-storey. OSC in Taipei. In 2013, Taiwan advanced
to 9th from 76th position in Dealing with Construction permits and
successfully demonstrated the outcomes of simplified service
process for construction permits. The World Bank has cited
Taiwan’s successful integration through One-Stop Window
Service for Construction Permits in providing more
comprehensive integrated services as best practice. Taipei City’s
one-stop shop for pre- and post-construction approvals; risk-
based, self-regulatory inspection system; and streamlined
application procedures are the results of such cross-agency
efforts. To avoid confusion and having unnecessary argument,
the government will only enforce clear regulation.
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Their clusterisation focuses on 2 aspects namely Safety (Fire
code, mother nature disaster prone eg earthquake, typhoon) and
Inspection requirement – by type and complexity. All utilities’
details can be retrieved at OSC (information gathering). The
Association of Architects reviews the drawings administratively,
and subsequently the Taipei City Government will expedite the
approval. Fire requirement responsibility has been transferred to
architect (self review for small projects). Taipei City Government
endorses approvals (issues building permit) without a meeting.
Inspection for small project is not compulsory and should there be
a need for inspection, then joint-inspection will be carried out
(without architect at site). Architect will assist inspection team for
big project e.g. condominium or mixed development (as architect
knows best about technology and design).
In Taiwan, building will be certified with usage-licence (CF) first
before utilities connection (unlike Malaysia, connection first before
the issuance of CCC). Usage-licence can be applied after 80%
completion (after scaffolding has been removed). At the moment,
there is no online system for submission; however the Taipei City
Government will implement Building Information Modeling in
2015.
5) Visit to Taiwan Power Company (Similar like TNB – Generation to
distribution)
Taipower was established on May 1st, 1946. It is a vertically
integrated power utility. Its business scope includes generation,
transmission, distribution and sales. It is the sole power provider
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company in Taiwan. The electricity produced by independent
power producers (IPPs) and cogeneration is sold in bulk to
Taipower, who in turn sells them to the consumers.
As of end 2012, the total installed capacity of Taiwan's power
system reached 40,977 MW, of which Taipower accounted for
31,955 MW and non-Taipower assets for 9,022 MW. The major
energy sources comprise hydro, thermal, nuclear, and renewable.
The power grid includes 592 substations and transmission &
distribution lines totaling 364,000 KM, providing electricity to a
population of 23 million people in Taiwan, and the offshore islets
of Penghu, Kinmen, and Mazu.
Taiwan Power Company offers 2 types of distribution voltage
levels:
i. Low Voltage: 1phase 2wire 110V; 1phase 2wire 220V;
1phase 3wire 110/220V; 3phase 3wire 220V; 3phase 4wire
220/380V.
ii. Medium Voltage: 3phase 3wire 22.8kV; 11.4kV & 3.3kV
Supply connection duration depends on the scale of work
involved, thus not being standardized. Nonetheless, Taiwan
Power strives to meet connection date as required by each and
every customer. Target of electricity connection after completion
of building with Usage-Licence: is tabulated as follows (excluding
waiting period for customer payment, road digging permit,
construction dispute etc.).
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Type of work Target (days) Malaysia (TNB)
No external extension 4 7
Overhead 20 14
Underground 30 21
If the power demand is > 1000kW then a substation is required
(similar in Malaysia). Developer constructs sub-station while the
installation of equipment and connection will be done by Taiwan
Power (similar in Malaysia). Taiwan requires the technician
(qualified electrician) to prepare and install circuit to a new
building based on level and competency. High Technician: Ultra
high voltage >1000 kW; Middle Technician: Middle voltage >=
100kW to <1000kW ; and Low Technician: Low voltage <100kW
(Malaysia: refer to Peraturan 65 ABE). Taiwan Power will charge
the owner a contribution fee at average 25% of total connection
cost. Unlike Malaysia, in Taiwan, there is no handover of land
required by the Taiwan Power for building a stand alone
substation by the owner. While internal circuit is under owner’s
responsibility, outside boundary is under Taiwan Power’ liability
(similar in Malaysia).
Taiwan Dealing Construction Permits & Getting Electricity Performance
Indicator DB2014 DB2013
Dealing with Construction Permits
7 6
Getting Electricity 7 6
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6) Visit To Taiwan Water Company
Taipei Water Department (TWD) is a public utility operator under
the Taipei Municipal Government’s jurisdiction. TWD is
responsible for supplying some 2.5 million cubic meters of high-
quality potable water a day to over 3.8 million users in the Taipei
metropolis. TWD also incorporates a public water theme park in
its premise. The Taipei Water Country Park is located at an ideal
location near Gongguan Night Market and National Taiwan
University. The park is an educational contribution by the Taipei
Water Department. Its principle is to introduce water resources of
Taiwan and instruct correct ways of water usage.
Taiwan Water reviews plan for internal and external water
reticulation, and constructs water infrastructure (unlike Malaysia –
water operator only reviews external water reticulation plan,
starting from water meter to the main pipe), owner will be charged
with contribution fee and one-size-fit-all procedures is
implemented. Taiwan Water together with central agency and
local authority are responsible to provide infrastructure for new
development.
No inspection with the presence of consultant is required since all
the tasks are under Taiwan Water’s responsibility (unlike
Malaysia). Connection will be done after receiving Usage-
Licence. In Taiwan Non Revenue Water is 25%.
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7) Visit to CECI Engineering Consultants Inc. (Consultant Firm) and
Site Visit to CTBC Construction Site
CECI is a multi-disciplinary civil engineering consultancy firm
which is responsible for various major infrastructure projects in
Taiwan and abroad. CECI was established in 1969. CECI has
been awarded ISO-9001 International Certification for engineering
planning, design, construction supervision, construction
management and information technology and systems. Over the
years, CECI has undertaken some of the region's biggest civil,
architectural, structural and electrical/mechanical engineering
projects, and with the emergence of the electronic information
age, has actively expanded its scope of services into new areas
of work, including Geographical Information Systems (GIS),
Global Positioning Systems (GPS), Intelligent Transportation
Systems (ITS), e-commerce and biotechnology. CECI is currently
employing 1, 200 staff in their headquarters and some 600 at the
field.
CECI informed that all development must get clearance on all
land matters including approval. For small project under perimeter
WB project only requires Association of Architect to review the
plans before Taipei City Government approves the project. Joint
inspection for approval does not necessarily require architect at
site. For big and special building project, the architect will go
through: Planning stage (land approval); Design Stage (EIA,
Urban design guideline,all impact assessments,Panel review on
special building by association of architect and Fire engineer
(private) designs fire requirements. In terms of utilities approvals,
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architect or engineer requests for approval. Upon receiving
Building Permit, pay pollution fee, submit construction plan, notify
local authority, apply temporary power and water supply and
commence work (construction can start without utilities approval).
For Joint Inspection (with presence of architect or engineer), Fire
engineer ensures all equipment installed before conducting fire
inspection in addition to Construction elevators inspection and
Utility inspection. Subsequently apply Usage-Licence, Utilities
final inspection (with presence of architect or engineer) and
Utilities Connections. The Architect or engineer liability is whole
life (similar to Malaysia). Urban Design Review takes 3 months to
approve the design and Fire inspection in Taiwan is before utilities
connection. Since the Usage Licence is issued before utilities
connection, the fire inspection only uses temporary water
supplies.
* Details on the discussions based on the questionnaires given earlier is at
Appendix 1.
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4.0 LESSONS LEARNT AND ADOPTION OF BEST PRACTICES
Taiwan’s giant leapt from 97th position in 2009 to 9th in 2013 was due
to the fact that the OSC was set up for the purpose of complying with
World Bank criteria on Dealing with Construction Permit. The key
success factors observed were:
a. Empowerment of plan reviewing to professionals – this
eliminates interaction between applicant and authority;
b. Utility and infrastructure providers are from Government
agencies – the responsibility to provide main infrastructure is by
the Government. Therefore no lengthy approval process is
necessary;
Another notable difference between Taiwan and Malaysia’s practice is
the provision of substation. In Taiwan, the power provider does not
require a stand-alone substation to be built by the landowner. There is
no land or accessibility issue involved. The property owner is required
to provide a space for electrical equipment and be responsible for
maintaining them. The responsibility and liability of each party involved
in the design and installation of power supply are quite clear, while the
lead time for connection is reasonable. This is reflected in Taiwan’s
ranking in DB2013 and DB2014;
Ranking for Getting Electricity
Indicator Getting Electricity DB2013 DB2014
Taiwan 6th 7th
Malaysia 28th 21st
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Incorporating water attraction and education facilities is a commendable
idea which creates environmental awareness among the public. Being a
public agency which is the authority in water management for the whole
of Taiwan, TWD is able to effectively plan for a comprehensive and
sustainable water management. Similar to Taipower, the process of
getting water supply is clear and simple since TWD is responsible for
providing the connection, therefore eliminating the need for various
inspections as being practised in Malaysia. DB2014 report indicates
that the process of obtaining water supply in Taiwan (from application to
connection) is between 14 to 28 days. In Malaysia, the process may
differ from state to state since the water management is under the state
jurisdiction.
Taiwan empowers part of the review process to the Architect
Association or selected panel of subject matter experts. The authority
will focus on the drawings and specifications only and also on the safety
of the public. This is not being practised in Malaysia. Our local
authority’s official assumes all responsibilities of checking the
compliance, thus indirectly assumes the liability of answering to the
public if any untoward incidents occur. This also results in a more time
consuming process, and sometimes many recurring comments from the
time of submission till endorsement.
Architects are jointly liable for work done by other professionals as they
have no choice but be fully involved in coordinating the project from
start to end, and takes responsibility for his submission of the project.
They are also responsible in inspecting and certifying works during
construction to comply with the approved plan and building codes and
technical requirement by utility providers. In Malaysia, inspections are
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done by agencies, and sometimes can be tedious and time consuming.
Yet the architect is responsible for certifying the completion and
compliance of the building.
Taiwan’s OSC only takes up small projects, fitting the criteria set by
World Bank. The approval is expected within 30 days. OSC conducts
joint review before issuing Building Permit. In Malaysia, our OSC
distributes the plans to each technical agency for comments. Each
department works independently. Every department convenes in the
OSC meeting to state whether the project can be supported or not.
Sometimes one department’s decision may have impact or in conflict
with others. Having a joint review panel encourages a decision making
process by consensus which is more inclusive and transparent.
Construction industry is generally governed by a single agency, which
monitors almost every aspect of the industry, from planning to
landscaping and infrastructures. By having a centralised agency, the
construction industry master plan can be created and implemented
more comprehensively. It will also benefit the public in terms of
convenience in dealing with the authority. In Malaysia, various agencies
are involved in the construction industry. Each agency has its
respective scope of authority. Coordination is required to align to every
agency. Transparency and access to information is always a challenge,
and which agency is responsible to coordinate all involved is always
questionable.
Unlike Malaysia, all infrastructure and utility providers in Taiwan are
State-owned agencies. The process of getting services is relatively
straight forward. These agencies are responsible to provide all
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infrastructures right up to the site of the development, while the
consumer is only responsible for the provision within their land only.
This is in contrast to our Malaysian practice, where the service
providers are private corporations, a developer is responsible to build or
pay for the cost providing infrastructures or utilities and hand over the
completed product to the utility companies to maintain. The impact of
this system is that it usually involves a longer approval time for plans,
incurring waiting time for equipment, and interrupted construction due to
various inspections.
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5.0 MOVING FORWARD
Moving forward, Malaysia can adapt some of the approaches
particularly the operational part of the approving process. To review the
governance and restructure of the agencies may take some time.
However, at local authority level, the following practices can be
implemented quickly:-
a. Creating a review panel – this review panel shall deliberate land
and planning matters to ensure 100% compliance prior to
submission of Building Plan. The subject of Kebenaran
Merancang (Pendirian Bangunan) should also be included in this
review. This panel shall make recommendation to relevant Local
Authority if the project is qualified to submit the Building Plan. The
panel should also review the provision of infrastructures and utility
for the projects. E.g. in IRDA, review panel for projects in Medini
and Puteri Harbour is already being implemented in their Planning
and Design Review Committee.
b. Review by Professional Body – prior to submission of the Building
Plan to the Local Authority, the Architect shall submit the plan to
the Board of Architect for review. The review shall verify the
compliance aspect of Uniform Building By-Law and also the
Green element of the building. The Board shall make
recommendation to the relevant Local Authority for consideration
to approve.
c. Commitment to construct – the developer or applicant should be
penalised heavily if the approved project is not constructed upon
the expiry of the building plan. This will prevent speculative
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
28
practice by developers, which leads to waste of time and
resources of the approving party. It will also help infrastructure
and service providers to plan effectively.
d. In the longer term, the local authority may implement the “Approve
First, Audit Later” concept, similar to the Inland Revenue
Department system. This system will put the liability entirely in the
hands of the submitting persons. The consequences of non-
compliance can be very costly both to the submitting persons as
well as the developers. Due to this, the submitting persons would
have to exercise extreme due diligence before submitting any
application, at the same time preserving and uplifting the integrity
of the profession itself. In current practice, where Local Authority
and technical agencies review the plans and give approval, some
developers tend to try their luck by deceiving the authorities
through intentional non-compliance, while some even resort to
asking favour from the officers in order to receive approvals. The
“Approve First, Audit Later” would eliminate unprofessional and
unethical business conduct, and would free the government from
any liability and negative public perception.
e. Other than TNB, water operators, telecommunication providers
and sewerage operators should benchmark TNB and Taipower.
To reduce inspections, these utilities should appoint its own
contractors to connect the utilities and hand over when
completed. Then owner or his submitting persons do not have to
worry on any incompliance requirement and inspection can be
reduced. TNB should consider exploring Taipower sub-station
built concept. It is estimated, TNB and owner can reduced up to
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
29
50% of total time starting from reviewing the plans until
connection.
f. DBKL and other local authorities can benchmark OSC in Taipei
City Government in terms of providing all information and building
requirements beforehand. The transparent guidelines and forms
will reduce grey areas and speed up the application process.
6.0 CONCLUDING REMARKS
In summary, the delegates have indeed gained useful insights,
experiences and acknowledged that the success of one-stop centres
depends on good coordination among all agencies involved. This often
requires overarching legislation that ensures information sharing and
establishes oversight mechanisms to minimise cases of non-
compliance as building approvals tend to require technical oversight by
multiple agencies.
The Malaysian delegates will identfiy and adopt/adapt certain best
practices. The Focus Group on Dealing with Construction Permits
(FGDCP) will study the impact by preparing cost benefit analysis and
conduct public consultation with respective stakeholders before making
any recommendations.
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
30
5th
September 2014 at CTBC Bank construction site in Neihu
Prepared by,
IOSM Taiwan Study Mission Malaysian Delegates, 250914
Contacts:
Ms. Khalidatul Asrin Abdul Aziz (Administrative matters) Ph: 03-7960 0173 Email: asrin@mpc.gov.my
Mr. Mohd Yazid Abdul Majid (Other matters) Ph: 03-7960 0173 Email: yazidmajid@mpc.gov.my
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
31
The Delegates:
Mr Mohd Yazid Abdul Majid (Mission Leader) Manager Malaysia Productivity Corporation Ms Aminah Abd Rahman Director of Local Government Department Ministry of Urban, Wellbeing, Housing and Local Government Ms Nor Fajariah Sulaiman Head One Stop Centre Kuala Lumpur City Hall Mr Shahrul Faisal Ismail Senior Architect Kuala Lumpur City Hall Mr. Ar. Ezumi Harzani Ismail Director and Professional Architect Arkitek MAA Pvt. Lmt. Mr Ir Bashir Ahamed Maideen Managing Director and Professional Engineer Nadi Consult Era Pvt. Lmt. Mr Zurkinain Md Nor Senior Vice President Iskandar Service Centre Iskandar Regional Development Authority Ms Norhaida Mohamed Associate Iskandar Service Centre Iskandar Regional Development Authority Mr Nor Azman Meli Regulatory Officer Energy Commission Ms Hasliana Mohamaed Senior Engineer (System Development) Asset Management Department Distribution Division Tenaga Nasional (equivalent to Taiwan Power) Ms Khalidatul Asrin Consultant Malaysia Productivity Corporation
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
32
Appendix 1
Questionnaires to Taiwan Organisations
Individual Country Observational Study Mission (I-OSM) on Best Practices Regulation in Taiwan, 1-6 September 2014
The Government of Malaysia has requested a study on regulatory burdens placed on businesses (companies) in ‘Dealing with Construction Permits (DCP) in Kuala Lumpur and other localities to be carried out. The objective of the study is to identify regulatory and non-regulatory options that will reduce such burdens without compromising the achievement of the underlying policy objectives of the regulations. The permits under review are as per case study as stated by the World Bank’s ‘Ease of Doing Business: Dealing with Construction Permits’. The study measures procedure, time and cost to construct a building It covers all procedures required to construct simple buildings – from planning submissions until the building is ready for occupancy, time approve application and cost of all fees. Project Assumptions 1) World Bank Methodology -
The project: Warehouse - Two stories - Total area of 1,300.6 m² (14,000 sf) - Each floor is 3 meters (9 feet, 10 inches) high. - Usage for general storage activities, i.e storage of books or
stationery. - Land plot of 929 m² (10,000 sf) that is owned by BuildCo. - Is a new construction (there was no previous construction on
the land). - Will take 30 weeks to construct (excluding all delays due to
administrative and regulatory requirements).
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33
No.
Time
to
Compl
ete
Associat
ed Costs
1 Obtain information about infrastructure from the water company
Agency: Taiwan Water Corporation at One Stop Shop
14
days
no
charge
* 2 Obtain information about electricity infrastructure from electricity
provider
Agency: Taiwan Power Company (Taipower) at One Stop Shop
14
days
no
charge
* 3 Obtain information about telecommunications infrastructure from
telecom company
Agency: Chunghwa Telecom Company Limited at One Stop Shop
14
days
no
charge
4 Request and obtain building permit from the City Government at the
One Stop Shop
With the One-Stop Shop introduced in March 2011, becoming fully
operational in early 2012, builders now can obtain several approvals in one
place. The building cost is assumed here to be TWD 15,200.00 per sq. m.
for steel structures. Hence the building cost of the warehouse in this case
is TWD 19,769,120.00. The cost of obtaining a building permit is 0.1% of
the building cost estimated by the City Government, in addition to other
fees.
Agency: City Government
21
days
TWD
27,019
5 Report the start date and present construction plan to the City
Government and pay air pollution protection fee before starting
construction
Agency: City Government
1 day TWD
15,217
6 Request and obtain post-construction approvals and registrations at
the One Stop Shop
The Department of Land in the City Government issues a building/land
ownership certificate on the basis of the building surface area calculation
35
days
TWD
28,614
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
34
Taiwan’s Performance of Dealing with Construction Permits
Indicator 2014
that is prepared by the architect and approved by the Department of
Building Administration.
Agency: City Government (Department of Land)
7 Apply for water supply
Agency: Taiwan Water Corporation
1 day no
charge
8 Receive inspection from water company
Agency: Taiwan Water Corporation
1 day no
charge
9 Obtain connection to water
The whole process (from application to connection) may take 14 -- 28
days.
Agency: Taiwan Water Corporation
19
days
TWD
25,000
* 10 Request and obtain telephone line
Agency: Chunghwa Telecom Company Limited
4 days TWD
3,500
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35
2) Medium to High Type of Development Private Hospital with 300 beds
- 9 storeys height (3 storeys podium + 6 storeys tower) - GFA: Approximately 40,000 m² (excluding car park) - Locality: Kuala Lumpur - Land area: Approximately 3.5 acres
Basic infrastructure available: - Water supply main pipe - Public sewer line - Tele-communication line - Existing Road and Drainage around the site - Existing Street Lighting
Electricity Power – 11kV sub-station is required Itinerary in Taipei
Date Day Activity
Departure to Taiwan, China: Time
1/09/2014 Day 1 Arrival at Taiwan, China
2/09/2014 Day 2
08.00 – 12.30 pm: Role of China Productivity Centre (CPC)
02.00 – 5.00 pm: Understanding Taiwan, China Government Structure
3/09/2014 Day 3 8.00 – 5.00pm: Understand Local Authority Approving Process of Development Proposal
4/09/2014 Day 4 8.00 – 5.00pm: Utilities Regulatory Regime
5/09/2014 Day 5 8.00 – 5.00pm: Technic of Inspection and (Discussion with Consultants and Site Observation)
6/09/2014 Day 6 Depart to Malaysia
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
36
Appendix 2
Questions from Malaysian delegates 2 Sept 2014 On Government Roles
a) What is China Productivity Centre’s (CPC) role in promoting good regulatory practices? What is the CPC action if the businesses face problems in terms of red tape? Which agency helps regulators to review and update their procedures?
3 Sept 2014 On Development Approval (please use project assumptions in pages1 and 3 to explain your processes)
b) How One Stop Centre (OSC) of City Government manages development application?
i. How the owner or build company send their application e.g. building plans? Is it online or manually submitted?
ii. If submission is made through online, how City of Government endorses the approvals? Who is the committee/panel who approve the applications?
iii. Do you apply risk-based system to determine low risk building or complicated building in giving approval? YES, how does City of Government classify the low risk category?
iv. What kind of approvals or permits need to be obtained during the following stages:
a. Before construction b. During construction c. After construction
c) How OSC coordinates the approval application? d) During construction stage, is there any inspection required by the
authority or utility agencies? How do you carry out the inspections?
e) We would like to meet and have session with officers from these departments:
i. Planning Department of City Government; ii. Building Department of City Government; iii. Engineering Department of City Government; iv. OSC Department; and
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
37
v. Department of Land f) How does OSC receive comments from utilities providers? g) How are payments made to all respective departments? h) How to get land approval in Taiwan? Please explain the role and
function of Department of Land in Building approval. i) Is planning approval required to construct a building in the city?
4 Sept 2014 Utilities Regulatory Regime (please use project assumptions in pages 1 and 3 to explain your processes)
a) We would like to meet and have sessions with officers from these departments:
i. Taiwan Power Company; ii. Taiwan Water Company; iii. Chunghwa Telecom Company Limited; and iv. Sewerage Company.
b) Please explain how to get utilities connection in your city. c) How engineer gets initial data from utilities companies to design
(pre-construction) utilities reticulation systems for the building? d) Who submit to utilities companies for approval on design and
connection? e) Does these companies also apply risk-based concept? f) Who approves final inspection and gets ready for the
connections? Consultant or utilities companies?
5 Sept 2014 Meeting with private consultants (Architect and Engineer)
g) What is the role of consultants? h) Who gives clearance for utilities connections? i) Who declares the building is safe for occupancy? j) Final request, we would be more than happy if CPC can arrange
for site observation of under construction commercial building. k) Is self-regulation concept by professionals being implemented in
building approval? (e.g. Architect or engineer has the liberty to design and endorse the design)
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
38
Appendix 3
Questionnaires for Taiwan Power Company 4 Sept 2014
a. What is Taiwan’s distribution voltage level?
b. How many customers do you have? Commercial, industry and
domestic?
c. What is your average time to electrify a normal new supply
connection application? And what is your requirement and
condition to the applicant for new connection before you proceed.
d. What is the time taken to respond to a customer request for a new
electricity connection?
e. What are the charges imposed to the customers before electricity
supply connection? Do you impose any charges to the
applicant/customer for new supply connection? How do you
charge them/How much do you charge?
f. Do you acquire the land for your substation?
g. Do you have minimum service level in giving electricity supply?
h. Is there any assistance from the Government that facilitates the
electricity supply application for approvals and permits?
i. High voltage substation usually requires large areas of equipment
such as transformer rooms, switchgear room, air-conditioning
systems and fire safety systems. Would these areas be included
in calculating the gross floor area (GFA) under the Buildings
Ordinance?
j. Finding enough space for substation is always a challenge for
supply connection. Do you encourage substation to be attached
to the building or in package substation (compact substation)?
Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014
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