individual country observational study mission (i-osm) on

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

Post Visit Report, IOSM Taiwan Study Mission 2 - 5th September 2014

4

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


5

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.


6

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


7

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.


8

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


9

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


10

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.


11

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.


12

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


13

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.


14

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.


15

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.


16

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.


17

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


18

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.).


19

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


20

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%.


21

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,


22

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.


23

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


24

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


25

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


26

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.


27

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


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


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.


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: [email protected]

Mr. Mohd Yazid Abdul Majid (Other matters) Ph: 03-7960 0173 Email: [email protected]


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


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).


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


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


1 day no

charge

9 Obtain connection to water

The whole process (from application to connection) may take 14 -- 28

days.


19

days

TWD

25,000

* 10 Request and obtain telephone line

Agency: Chunghwa Telecom Company Limited

4 days TWD

3,500


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


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


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)


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)?


http://www.datacentre.gov.hk/en/faq.html#q12









individual country observational study mission (i-osm) on

Documents