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?
