COST OF APPROVAL DELAYS

The long gap between the seeking of building approvals from the Town and Country Planning Division and the granting of final planning approvals may not merely be a question of new legislation nor of educating people on how to prepare an accurate application, as Planning and Development Minister, Camille Robinson-Regis, apparently believes. Instead, the problem may lie in a combination of worker attitude, the hiring of relevant staff on the basis of standard Public Service entry requirements, a possible dearth of supervisory and management skills in the Ministry’s administrative staff, the illegal construction of buildings, some of them used for business, illegal modification of already approved plans, and the additional work placed on the Division by the above negatives.

Robert Guiseppi, President of the NUGFW Construction Company, has charged that it could take up to two years for final planning approvals to be granted by the Division and stressed that the approvals took too long. Interestingly, the Chairman of the National Housing Authority, Noel Garcia, has agreed with him on the issue of two-year delays for final approval. In turn, the Plannning Minister has agreed with the NUGFW President on the issue that final approval took far too long to be received. Mrs Robinson-Regis has advised that the Town and Country Planning Division was looking into what could be done administratively to reduce the time it took to process building approvals. Unfortunately, she has not indicated how long the procedure was likely to take nor its present status.

Any excessive delay in the granting of approval for a building project can impact negatively not merely on the final cost of the project itself, but if it is a commercial venture on the level of corporation taxes Government may have otherwise earned. And since it is likely to be financed through a loan from a bank or other financial institution then there are additional interest charges with which to contend. In addition, if the workers are unionised and the two-year delay means that construction runs into a period covered by a new wage agreement then the cost of labour will jump by the quantum of the increased wages as well as the cost of interest charges on an additional loan to cover the extra labour costs. Profit margins will also be factored into the cost equation. In turn, if for example, approval sought, say in March of 2002 is not granted until March of next year, then with the proposed increase in the minimum wage from $8 an hour to $9 there will be a 12 1/2 percent increase in wages incurred.

Depending on the competitive nature of the enterprise, yet another minus effect may be resulting lower profit margins which can lead to a reduced amount of corporation taxes than would have been paid out had the project remained on schedule and the profit margins been as originally estimated. Capital is also tied up. If the full costs incurred by the delay in being granted final building approval can be passed on to the clients or consumers, for example in the case of an apartment complex, then individuals who have agreed to purchase apartments, and the terms include clauses covering escalation in building costs, then it would be a case of transferring the additional costs from the property developer to the prospective apartment owner. The point here is that somebody pays in the end, all because of the inability of the Town and Country Planning Division to act with dispatch.

The contributory factors in the long drawn out granting of final building approvals by the Town and Country Planning Division may lie with the structural defects of the Division itself beginning with the qualifications required by the different levels of staff handling the processing of applications and the attitude to their jobs of all too many public sector staff. The construction of buildings without even the bother of applying for approvals from the Town and Country Planning Division, or putting up structures not in accordance with already approved plans contribute to the headaches of the Division and are clearly a factor in final approval delays. Staff has to be assigned to deal with illegal structures as well as illegal changes. The final cost to the country as yet undetermined may very well be horrendous.