The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading contractor yesterday said he was “surprised the Bahamas ranked as high” as 68th in the world when it came to processing construction permits, suggesting the industry could generate “a lot more jobs” if the process was more efficient.

Stephen Wrinkle, the Bahamian Contractors Association’s (BCA) immediate past president, told Tribune Business that properly ‘zoning’ New Providence and the Bahamas would be a first improvement in streamlining the Town Planning approval process.

Responding to the World Bank’s Ease of Doing Business Report, which found the Bahamas had slipped another five spots in the past year when it came to obtaining construction permits, Mr Wrinkle said every delay was “very hurtful for our industry”.

Emphasising that delays were not solely the Ministry of Works’ fault, Mr Wrinkle added that in the current economic environment the Bahamian construction industry needed “every house, condo and warehouse we can get”.

And, disclosing the dire straits many contractors were in, Mr Wrinkle told Tribune Business: “I’ve got contractors calling me every day, literally crying, as they’re going to lose everything they’ve worked for for the last 20 years - they can’t make their mortgage payment, the loan payment on their truck, as they are not working.”

In assessing how easy it was to obtain construction permits in the Bahamas, the Ease of Doing Business Report looked at the number of procedures, and time taken to obtain them, that would be required to legally build a $1.2 million warehouse on a greenfield site in Nassau.

Based on this, the report found: “According to data collected by Doing Business, dealing with construction permits there requires 14 procedures, takes 178 days and costs 27.8 per cent of income per capita.”

This placed the Bahamas 68th out of 185 countries when it came to the ease of obtaining construction permits, placing it behind the likes of Jamaica (50th) and Barbados (54th), not to mention St Lucia (11th spot) and Antigua and Barbuda in the 24th.

When it came to procedures, the Bahamas was in line with the Latin American and Caribbean average, although it was starting to slip behind slightly in this area.

However, this nation remained ahead of the region in both the time taken, and cost, categories.

Yet the Ease of Doing Business Report showed that the Bahamas had made no reforms in the area of construction permit processing since it started in 2005.

It said the most costly, and time consuming, procedures in the Bahamas were those at the beginning of the process. Obtaining Town Planning approval ‘in principle’ took an average of 30 days, while getting a building permit from the Ministry of Works’ Building Control unit took another 120 days and cost $3,500 based on the ‘warehouse benchmark’ used by the report.

Obtaining a water and sewage connection was cited as the other major cost, at $2,784 for the ‘warehouse’ project.

Mr Wrinkle, though, told Tribune Business that the ‘approval in principle’ stage would be much improved if proper zoning regulations were employed throughout the Bahamas to guide land use and development.

“I’ve been through the permitting process dozens and dozens of times,”he said. “One of the problems we experience in this category is the lack of zoning.”

The former Ingraham administration moved to overhaul the Bahamas’ land use and development legislation via the Planning and Subdivisions Act, but Mr Wrinkle said that properly zoning this nation for uses such as commercial, residential, light industry, multi and single family - would better guide prospective purchasers.

“We’ve been talking about that for years,” Mr Wrinkle said of improved zoning regulations. “Some areas in Nassau have been zoned, but many areas have been missed due to the growth of the island.

“We’ve been limited, particularly in commercial zoning applications, and when you combine that with the fact many young entrepreneurs do not have the ability to rent commercial premises, you get many businesses operating out of the home.

“In my estimation we need a strengthening of the zoning regulations and procedures that would alleviate the need to go to Town Planning for an approval in principle, which is a minimum of 30 days if there are no queries. It can take six months to a year in Town Planning if there are queries.”

Even if approval in principle was granted, Mr Wrinkle pointed to further problems facing developers. He pointed to the case of Wendy’s, where its owners purchased a potential restaurant site based on obtaining this, only for Town Planning to rescind its initial permission once local residents objected.

Wendy’s owner, Aetos Holdings, was left ‘out to dry’ after investing a seven-figure sum to purchase the land, and was eventually forced to find an alternative site.

“If it was clearly zoned, you would not have that problem,” Mr Wrinkle added. “Zoning helps to regulate the value of real estate.”

Pointing to other inefficiencies, Mr Wrinkle said these included the fact different government agencies and ministries had to approve building plans, meaning they could not be signed off in one location.

The Ministry of Works also frequently had to contend with the submission of incomplete drawings, and “conflicts between the architects, engineers and Ministry” often took time to resolve when questions were raised.

Mr Wrinkle said architects and engineers often had little say in the process, while drawings that were not complete - or incomplete - often went to the ‘back of the queue’ with the Ministry’s queries often unresolved.

“I’m surprised we rank that high,” Mr Wrinkle told Tribune Business on the Ease of Doing Business report. “A typical permit in the US, if the project is in the right zone and has the correct drawings, it’s usually a matter of days.”

“We have a procedure. It may not be the most efficient, but that is the result of trying to get in all the checks and balances to prevent bad things from happening. It can certainly be streamlined.”

Acknowledging that the pre-recession “housing boom” and foreign direct investment (FDI) projects placed a “huge burden” on the Ministry of Works when it came to turning around building permits, Mr Wrinkle said: “Every day we wait on a permit is a day contractors are not working.

“It’s very hurtful for our industry to have projects held up. It’s not the fault of the Ministry in every case, but we just don’t have a good customer-oriented system and it really needs looking at.

“We could have a lot more jobs going on currently if the permitting process was streamlined and more effective. It’s a cog in the wheel, and in this current environment any project that we can get started is an important project.”