Businesses gain as land agencies revamp rules

Regulatory changes by government land agencies over the past five years have saved businesses millions of dollars and cut waiting times by weeks in some cases, the agencies have told BT.

Since 2002, the major land agencies - the Urban Redevelopment Authority (URA), Housing & Development Board (HDB), JTC Corporation, Singapore Land Authority (SLA) and the Building and Construction Authority (BCA) - have discarded 14 per cent of 2,019 land-related rules and amended another 21 per cent.

The changes have benefited many businesses, from start-ups to established developers and industrialists.

URA chief executive officer Cheong Koon Hean said the changes are part of a wider move by the civil service to make regulations ’smarter’ while keeping the interests of businesses and citizens in mind.

According to the land agencies, government bodies have together reviewed about 95 per cent of all rules and regulations under their purview since 2002. Twelve per cent of rules were removed and another 24 per cent amended.

And the effort to cut red tape is paying off, said Mrs Cheong. In the World Economic Forum’s Global Competitiveness Report, Singapore’s ranking for ‘Extent of Bureaucratic Red Tape’ has climbed steadily, from 27 in 2002 to 12 in 2006. (The higher the ranking, the less the red tape.)

One land-related regulatory change that resulted in widespread benefit is URA’s Plan Lodgement Scheme that allows instant approval for development works - subject to conditions, of course. Previously, processing time took 21 days. Under the new scheme, 1,140 businesses and industrialists each enjoyed savings of 21 days and $965 in fees last year, according to URA. Cumulatively, this led to savings of some $1.1 million.

In particular, the industrial sector has been shaken up by regulatory changes.

To promote greater flexibility of use, in 2003 JTC started releasing more short-tenure land to cater to the needs of various industries, rather than just 30-year or 30+30-year leases. Now, leases for 3+3 years are available. JTC reckons the flexibility has benefited about 30 industrialists a year.

URA has also become more flexible, by consolidating six separate zones for industrial, warehouse, telecommunications and utility use into two zones based on impact on surroundings. This allows interchangeability of use within each zone without need for rezoning, which can take about six weeks.

Small businesses and start-ups especially have benefited from the rules review. Under URA’s Temporary Development Levy Scheme introduced in 2003, the development levy is pro-rated to the length of time permission is given for, which benefits temporary structures.

In 2006, 15 businesses paid $190,000 under this scheme. Without it, they would have paid $3.2 million in development charges for permanent permission before they could kick-start their businesses. The scheme has saved each business an average of $200,000, said URA.

Even the smallest start-ups can take advantage of the joint HDB-URA Home Office Scheme. Before regulatory changes in 2003, only high-tech and knowledge-intensive types of business could be carried out from HDB flats and private homes. Now, any businesses can apply to use part of a residence as an office as long as the business is not on a ‘negative’ list.

So far there are 21,000 active home users of the scheme, said URA. With office rents now ranging from $2.50 to $6 per square foot per month, the 21,000 users will have each saved between $500-$1200 a month, assuming they would otherwise have rented a space of about 200 square feet in a commercial building.

Besides saving time and money, government agencies also hope the easing of regulations will encourage more innovative land use.

Under an ‘ideas tender’ concept introduced by SLA in 2005, tenderers looking to lease state land have the option of submitting bids with alternative uses not on SLA’s list of approved uses. SLA said: ‘The scheme allows businesses and entrepreneurs to pursue innovative ideas for uses of state properties instead of restricting the properties to pre-approved uses.’ The novelty of ideas is protected as there is no disclosure to potential competitors during the tender stage. Six properties were awarded under the ‘ideas tender’ in 2006, including properties in Dempsey Road.

Mrs Cheong sums up what the land agencies have done to date as part of a continuing effort by the civil service to have ‘’balanced’ regulations that take feedback from interested parties into account.

‘I deal with a lot of developers, and I tell them there is absolutely no reason for me to make life difficult for them,’ said Mrs Cheong.

Source : Business Times - 12 Mar 2007