Establishment of One Stop Centre (OSC) for Expediting Property Approvals by City Hall of KL

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INNOVATION INITIATIVE IN CITY GOVERNANCE ESTABLISHMENT OF ONE STOP CENTRE (OSC) FOR EXPEDITING PROPERTY APPROVALS BY CITY HALL OF KUALA LUMPUR

BY IBRAHIM MOHD @ AHMAD

INTRODUCTION e One Stop Centre (OSC) is an organizational innovation that has been a major driver of administrative improvements in Malaysia over the past two decades. Initially, such centres were con ned to payment of utility bills and rates but were later expanded to embrace other functions such as investments and issuance of licences. is policy brief describes the OSC introduced by the city authority in Kuala Lumpur to improve the property development approval process.

Delays in obtaining approvals from local authorities have been widely reported in the literature (Adams and Watkins, 2002; Evans, 2004; Ratclife and Stubbs, 2003). Some researchers have argued that the delays in obtaining planning approvals are the dominant factor affecting the development costs (Harvey, 2002; Buietlaar, 2004, Tiesdel and Allmendinger, 2005). Due to the complexity of the planning approval process, however, the delays are not solely caused by the planning department but also by other related technical departments. On other occasions, the delays in obtaining building plan approval is also addressed as the delays of getting planning approvals although the building approval process actually commences aer the planning approval (Goh, 1997).

Overview of Institutional Framework for Land Development Approvals In Malaysia, towns and cities are managed by local governments which represent the third tier of government. e local authorities are also the local planning authorities for their areas (under the Town and Country Planning Act 1976), situated at the third

layer of the federal government institutional structure and answerable to the federal, state and local governments. All local governments in Malaysia are appointed and are established under the Local Government Act 1976 (Act 171). Local authorities 1

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have to liaise with some other government institutions and agencies in order to perform their duties. In big cities such as Kuala Lumpur, the local authority is able to employ professionals for its technical departments and need not rely on the relevant federal government bodies. However, in some states, the federal ministries and state agencies still have their responsibilities to play as coordinator and regulators.

Due to these overlapping responsibilities, provision of efficient government services becomes difficult due to bureaucratic and political constraints.

Development Approval Process and introduction of new modus operandi In the past, the process of obtaining development approvals in Malaysia was time consuming as it involved land matters, planning permission, building and earthwork plans which were carried out separately and in stages. e approach to process development proposals by the various technical departments or agencies at the federal and state levels as well as the government-linked companies also varied. Since the government institutional set up in Malaysia is complex, the communication and coordination among the vertical and horizontal government agencies are the most crucial area for improvement towards better government delivery services. Complaints about the delays in approval process still remain. Most conspicuously, the slow pace of the local gov2

ernment services, cumbersome compliance procedures as well as lack of coordination among the government agencies are among the major areas requiring remedial actions urgently especially to curb the escalating development costs (Mohd. Razali, 2002). On this note, some developers are of the view that the resolution of government delivery services is one of the key measures to reduce development costs which can impact on pro ts (Lawrence, 1997). e issue of delays in approvals on matters related to land development on the part of local authorities and land offices had been a source of constant embarrassment for the Ministry of Housing and Local Government (MHLG). Consequently, the MHLG initiated efforts to establish OSC in all Local Authorities and State Planning Authorities in Peninsular Malaysia in order to address these delays in processing.

City Hall of Kuala Lumpur (CHKL) is the local planning authority for the Federal Territory of Kuala Lumpur. e applications for planning approval received and processed by CHKL are more than 1,000 a month and the actual number of applications depends upon the economic environment – more applications are received during a boom economic period. However, before 2007, the local authority was previously unable to deal with the increasing applications under the existing process. e

number of applications that can be considered and decided has been below 100. Thus, the increasing back-log of applications and incoming applications have exerted tremendous pressures on the local authority. e Lord Mayor of Kuala Lumpur launched the OSC in 2007 soon after the MHLG announced that it was officially launching the OSC throughout the country. With direction from the Lord Mayor, CHKL officers had conducted several preparatory meetings to discuss the establishment of the OSC together with officers of the Federal Territory Land Office. e necessary forms and documents, the selection of officers to be stationed at the centre, the procedures for land development approvals, operational budgets were thoroughly discussed. e CHKL main office building was chosen to be the site for the OSC. e guidance given

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by the MHLG was that though the OSC is constituted to deal with the development approvals, the planning department, the building control department and the land office will still continue to function as they have been doing so in the past.

by the City Hall of Kuala Lumpur (CHKL) revealed positive results not only in terms of reducing time of approvals (from 6 months previously to 4 months) but also in terms of reducing the administrative burden of certain departments of CHKL.

e major functions of the One Stop Centre (OSC) are to coordinate the applications for planning permissions, building plan approvals and land conversion, subdivision and amalgamation with the main objective of reducing the time taken in the approval process. e tedious jobs of the OSC are the distribution of applications to respective technical departments and monitoring the progress of the processing by the particular department concerned. Technical departments are given 14 days to deliver their comments to applications located within an area of having a local plan and 40 days for applications within areas without any local plan. Upon receipt of the comments from the respective technical departments, OSC ofcers will prepare reports to the planning committee and then reply to the applicants about the committee’s decision. If the technical department concerned did not respond aer the given time frame, the OSC will still continue to monitor the application.

e success of this initiative is dependent on improvements made to existing processes as follows:

Benefits from the new administrative innovation A case study conducted on the operations of the OSC adopted

(i) Underpinning the success of the OSC is the revamping of the entire process of submission of forms and documents. An electronic submission (or E-submission) system was developed to enable the operations of the OSC. is e-submission is based on a decision support system (DSS) which allows for the simultaneous uploading of all forms, plans and other supporting documents in one place. In the previous system, the documents have to be submitted manually to een different relevant agencies one aer another. e DSS has addressed this problem by creating a standard program embedded with the requirements of the different agencies which can be accessed by these agencies at any time. Any incomplete submission will be detected easily and the developer will be notified immediately of what is needed to be done to complete the submission thereby saving time and cost. (ii) With the introduction of the OSC, the processes for planning approval have been streamlined and made much easier. e DSS

which supports the e-submission enables applicants to monitor their applications without the need to contact the respective agencies. The process is now more transparent, customer friendly and reduces duplications among the various agencies. Additionally, the DSS has enabled customers to submit applications in alternative packages which were not possible in the previous mode. Developers can now submit all four main submissions – namely, land, planning approval, building plan and earthwork and road and drainage –simultaneously or combination of three submissions simultaneously or combination of two submissions simultaneously. e case study on the implementation of the OSC in CHKL has revealed a number of pointers as follows: (a) Sustained Leadership

e successful implementation of the OSC by CHKL would not have been possible without the full commitment of its chief executive officer (in this case, the Lord Mayor). Given such commitment, support from the other departments within CHKL as well as from other government organizations was forthcoming. (b) Forging Trust

Land or building plan approvals involve the jurisdictions of several agencies each with their specific regulatory/legislative requirements. Forging a common platform requires all the 3

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interested agencies to work in earnest and to see the potential benefits emanating from the new mode of application. Above all, these organizations must be made to feel that their powers or importance are not transgressed or diluted with the introduction of the OSC. Accordingly, building trust during the initial phase of the project assumed importance and this called for leadership at CHKL. Once a common bond and teamwork has been established it was much easier to address bottlenecks or impediments in the implementation of the system. e success of the system was viewed as a success by all the participating organizations and not only by CHKL. (c) Establishment of a new organizational mode (the OSC)

OSC, CHKL ensured that the personnel manning the OSC are fully conversant with the new procedures. Senior staff members were selected initially. Feedback undertaken on the system indicated that CHKL personnel were still not familiar with the new procedures. Introduction of any new system is not without its problems and underscore the need for continuous learning and receptiveness to feedback from users of the service. Constant monitoring and evaluation of the new system is crucial to ensure the success of this new mode of application. CHKL regularly solicited feedback from developers and other users of the system as well as the organizations involved in the OSC as to how to improve on its operations.

CONCLUSION This case study revealed how mounting building approval applications provided the catalyst for CHKL to experiment with a novel method of addressing this application crisis. With undivided commitment from the top, CHKL was able to weld together all the relevant parties to apply a concept that has been used successfully elsewhere in the delivery of public services. ese interactions were critical as trust and unity of purpose needed to be forged. Also, the participating agencies needed to be convinced that their jurisdictions were not undermined by adoption of this (d) Importance of Learning, new mode of building plan/land Monitoring and Evaluation approval. e introduction of the Prior to the introduction of the new system was not without its A new organizational mechanism – the OSC – was established to implement the new system of application. This new mechanism is necessary to coordinate the positions of all the various participating agencies involved in the approvals of land or building applications. It allowed for faster decision-making as well as enhancing information ows on status of applications. e role of the lead agency – in this case, CHKL – becomes important in ensuring that this mechanism is dynamic and weaknesses are quickly addressed.

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problems. Staff at CHKL needed to be trained to familiarize themselves with the new methodology.

Also, the system required the development of a robust decision support system.  e launch of the new system received positive feedback from housing developers and individuals who agreed that the innovation initiative has improved the local government delivery service in this particular sector. However, some areas of this service still needed further improvements. e innovation initiative brought about by the OSC has shown positive results not only in terms of reduced time of approval but also in terms of reducing the administrative burden of certain departments.

Above all, this introduction of the OSC underscores the importance of continuous interactions with all the stakeholders, namely, the implementing agencies, the end-users so that impedi-

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ments can be quickly addressed.

Leadership was crucial in making this innovation a reality.

REFERENCES Allmendinger, P., & Tewdwr-Jones, M. (Eds.). (2002). Planning futures: New directions for planning theory. London: Routledge.

Goh Ban Lee (1997). Housing Delivery System: An Academician’s Perspective.

In Housing the Nation: A De nitive Study. CAGAMAS. Lawrence Chan (1997). Government Housing Policies and Incentives: î ˘e Industry View Points. In Housing the Nation: A De nitive Study. CAGAMAS Bhd.

Further Information For more information on this policy brief kindly contact the author as follows: Dr Ibrahim Mohd @ Ahmad Faculty of Built Environment University of Malaya Email: ibrahimohd@um.edu.my

Acknowledgements This report was prepared as part of the IDRC funded project on Asian City Innovation Systems Initiative. The author of this report would like to acknowledge with grateful thanks to IDRC and all those who have generously provided information for this study.

With support from