DOING BUSINESS 2009 - JOHN J. HADDAD, Ph.D.

DEALING WITH CONSTRUCTION PERMITS 15Twenty-seven economies, includingFrance and Hong Kong (China), ensuretimely approvals for building permitsthrough silence-is-consent rules, withtime limits ranging from 2 to 4 weeks.Finland and Singapore—bothamong the 10 fastest in dealing with constructionpermits—hold the architect oranother qualified professional accountablefor supervising the construction andensuring its quality.Table 3.2Streamlining permitting procedures—a popular reform feature in 2007/08Streamlined construction permit proceduresReduced permit processing timesAdopted new building regulationsReduced feesImproved inspection regimefor construction projectsAngola, Colombia, Croatia, Hong Kong (China),Jamaica, Kyrgyz Republic, Rwanda, TongaBelarus, Bosnia and Herzegovina, Colombia,Jamaica, Liberia, SingaporeCroatia, Egypt, Mauritania, Portugal, TongaArmenia, Bosnia and Herzegovina, Burkina Faso,Hong Kong (China), LiberiaBurkina Faso, Hong Kong (China), Sierra LeoneWho reformed in 2007/08?Eighteen economies made it easier forbusinesses to comply with constructionrelatedformalities in 2007/08 (table 3.2).Africa had the most reforms, with 6 economies—Angola,Burkina Faso, Liberia,Mauritania, Rwanda and Sierra Leone—making it easier to deal with constructionpermits. Eastern Europe and CentralAsia followed, with reforms in Armenia,Belarus, Bosnia and Herzegovina, Croatiaand the Kyrgyz Republic.In East Asia and Pacific, Hong Kong(China), Singapore and Tonga streamlinedprocedures. In Latin America andthe Caribbean, Colombia and Jamaicareduced the time to process buildingpermit applications. Among OECD highincomeeconomies, Portugal was the onlyreformer. In the Middle East and NorthAfrica, Egypt was the only one. SouthAsia recorded no major reforms.The Kyrgyz Republic was the topreformer in dealing with constructionpermits in 2007/08. A new one-stop shopwas launched for issuing architecturalplanning terms and construction permits.Regulations left over from Soviettimes had required builders to obtainseparate preapprovals from each utilityauthority. Now all approvals are handledin the one-stop shop.Kyrgyz reformers didn’t stop there.A presidential decree eliminated the locationpermit, which had required thesignature of Bishkek’s mayor and took60 days to obtain. “It used to be a nightmare.You never knew what additionalpapers would be required,” says Bekbolot,owner of a medium-size constructionSource: Doing Business database.company. The mayor’s office no longerhandles occupancy permits either. “Ittook me 6 months before the reforms,and I still could not obtain the mayor’ssignature. After the reforms, it took mejust over a week to get my occupancypermit signed and sealed.”After cutting 9 procedures and 173days, the government is now focusingon reducing the cost—still high at morethan 405% of income per capita.Burkina Faso, once among the bottom10 on the ease of dealing with constructionpermits, was the second fastestreformer. A multifaceted reform programcut 12 days and reduced the cost by25%. To start, a government decree limitedthe number of on-site inspectionsby the National Laboratory for Buildingsand Public Works. That eliminated thebiweekly random inspections that usedto plague builders in Ouagadougou. “Wecan still expect inspections at certaincritical stages, but this is a far cry fromthe up to 15 or so we could receive before,”says one architect. In May 2008 thegovernment launched a one-stop shop.This has already shown results. It cutfees for soil exams in half and reducedthose for municipal approvals and firesafety studies. And it allows applicantsfor building permits to make all paymentsat a single place.Reformers were active in Africa.In Liberia the Ministry of Public Workscommitted to delivering building permitsin just 30 days, down from 90. Theministry advertised the 30-day statutorytime limit and designed a user-friendlychecklist of all the documents required.It also eliminated the need for the minister’ssignature on building permits forsimpler projects by delegating approvalto mid-level staff.Liberia’s deputy minister of publicworks cut building permit fees in half,from $1,400 to $700, to encourage morelegal building in Monrovia. “I thoughtpeople were going underground becausecosts were too high, so I decided to cutfees.” In a country where obtaining abuilding permit used to cost 10 timesincome per capita and other costs ofconstruction permitting remain high,this makes sense (table 3.3).Sierra Leone revamped its inspectionregime. Existing regulations providedfor inspections after each stage ofconstruction. But inspectors would comeat random once or even twice a week.Starting in 2007, the Ministry of Lands,Housing, Country Planning and Environmentrecruited a new cadre of professionalinspectors and began enforcingthe regulations.Rwanda streamlined project clearancesfor the second year in a row bycombining the applications for a locationclearance and building permit in a singleform. And businesses now need to submitonly one application form for water,sewerage and electricity connections.Angola incorporated the applications forelectricity and water connections intothe building permit process, cutting proceduresfrom 14 to 12.Mauritania introduced its firstbuilding code. This simplifies the requirementsfor small construction projectsand lays the groundwork for a one-(c) The International Bank for Reconstruction and Development / The World Bank