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Wherefore art thou, OSC?
14/01/08 Property New Straits Times By Salleh Buang

When Prime Mininster Datuk Seri Abdullah Ahmad Badawi launched the One-Stop Centre (OSC) initiative in April last year, he emphasised that it was part of "several moves by the government to boost the property sector in the country".

True. The OSC is part of a "package of incentives" for investors who want to do business here, especially in the property sector.

The other components of the package include tax exemptions for certain industries located in specific zones, such as the Iskandar Development Region; scrapping of the Real Property Gains Tax; relaxing of Foreign Investment Committee approval conditions for acquisitions by foreigners; and the replacement of the Certificate of Fitness for Occupation (CF) with the Certificate of Completion and Compliance or CCC.

Of the incentives, Abdullah said these would mean nothing unless the public service delivery system is improved and the local government machinery can rid itself of its bureaucratic red tape. Therefore, the OSC.

At its core is "fast track approval of four months" � a major incentive given to developers undertaking the Build-Then-Sell (BTS) mode of housing delivery. The fast track approval is also extended to developers undertaking high impact projects.

With the OSC in place, developers can expect to have three things done fast: Change of land use, sub-division and layout planning and building plan approvals.

For developers not undertaking the BTS system, the wait is a bit longer than four months, but still much shorter than before � which has been anything from one to three years.

"I believe shortening the timeframe will have a positive impact on the construction industry, investors and business people who have long waited for less bureaucracy and the lowering of hidden costs in Malaysia," Abdullah said at a conference last April.

The dark side of this happy announcement is that the BTS system is actually not a complete BTS but a watered-down version that the National House Buyers Association calls the "10:90 variant".

Malaysian house purchasers still have to buy their houses "off the plan", and they still run the risk of the project being abandoned later.

Since the BTS system will run parallel with the traditional system, many people also believe that most developers will continue to practise the traditional method: The Sell-Then- Build system.

Another problem is that the BTS system is only for a trial period of two years. It will be "reviewed" after that, according to Deputy Prime Minister Datuk Seri Najib Abdul Razak. That review is due in the middle of this year. What will be the decision then?

To ensure that the fourmonth target can actually be achieved by the OSC, the Ministry of Housing and Local Government released a detailed flow chart on the work to be done by respective parties along each step of the way. These parties are not only the local authority and the Land Office, but also other "technical departments" such as Town and Country Planning, Public Works, Drainage and Irrigation, Sewerage Services, Environment, Fire and Rescue, Mineral and Geoscience, Tenaga Nasional Bhd and the State Water Authority.

Many may believe that the OSC is a new creation, a federal government initiative. My research found out differently.

For example, the Johor Baru Tengah Municipal Council website (www. johordt.gov.my/mpjbt/en/ jabatan/osc.htm) states that the council had established its OSC as early as Jan 1, 2004.

It would therefore be more accurate to say that the OSC launched in 2007 was a later version of the OSC already in place in several local authorities � a product of their own initiatives.

After presenting his second progress report on OSC to the Cabinet in late August 2007, Housing Minister Datuk Seri Ong Ka Ting assured the media that these bi-monthly reports clearly show "the progress, shortcomings and efforts being made to make the OSC more efficient".

It is a pity these reports are not available for us to read and digest.

Media reports last November quoted Penang island Municipal Council president Datuk Zainal Rahim Seman as saying that "since June 2007, we have received 474 applications from developers and with the help of the system, 90 per cent of them had been vetted and decisions made".

He added: "With the OSC, we have managed to clear some applications in three to five months. We are also clearing long pending applications that had been around for years."

This certainly is good news. However, earlier on in July 2007, Malaysian architects were complaining that some OSCs were not accepting their development plans ("Architects run into problems with one-stop centres", New Straits Times, July 6, 2007).

Asked for his comment, Ong said it was only natural for anything new to have "teething problems".

In September 2007, when addressing local housing industry players at an awards ceremony for developers, the housing minister said since the OSC "involves all three layers of government" (that is, local authorities, state government as well as federal ministries), the Cabinet has to monitor its progress.

He acknowledged "numerous teething problems with its implementation" and admitted that some people "had doubts it would work".

Ong went on to assure housing industry players that "we have been troubleshooting ... and we have been doing our best to solve the problems.

"We must make sure that what is not right is corrected, and that the government and the industry work together for the benefit of the industry and country while taking care of public interest."

I have surfed to the websites of several local authorities in an effort to find out the latest about the performance of their OSCs. I have also visited the website of the Real Estate and Housing Developers� Association as well as that of its state branches in search of related information. No such luck!

Lately, media reports said the National Land Code 1965 is coming up for some major amendments. While still under the protective cover of the Official Secrets Act, the information advanced to the media so far contains nothing about two vital issues people are concerned about � and which I am most interested in.

One is on Section 340 of the Code, in the light of the Boonsom Boonyanit case. The other is about the outcome of the "sequential vs simultaneous debate" involving land development approval and planning approval, which are important functions of the OSC.

I may be wrong, but as far as I understand it, when the National Land Code and the Town and Country Planning Act are read together, our development approval mechanism is sequential in nature, not simultaneous. The OSC is very much aware of the former, but wants to do the latter.

The problem is when the public is kept in the dark as to what the government is trying to do in the name of public interest, there is nothing that we can do but rely on speculation and conjecture. Not a very healthy thing to do, but unfortunately, what else can we do?

 

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