The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s building permit revenues under-shot projections for the 2012-2013 half-year by 43.7 per cent, the Deputy Prime Minister indicating that fees were set to increase to match service costs.

Addressing the House of Assembly during the Mid-Year Budget debate, Philip Davis said building permit fees were $313,334 below projections for the six month period July-December 2012. While the $403,299 collected, compared to forecasts of $716,633, reflected a weak Bahamian construction and mortgage market, he added that building permit fees had not increased for 25 years.

“While we accept the reality of this data and what it tells us, it should also be noted that our building permit fees are outdated and have not been reviewed and changed in 25 or more years,” said Mr Davis, who is also the Minister of Works and Urban development.

“Furthermore, these fees have also not been comprehensive enough to cover all of the services rendered by the Buildings Control Division. Our current minimum fee charged for building permits (under 500 square feet) is one-fifth of the Grand Bahama Port Authority’s minimum fees.

“Similarly, in comparison with the Grand Bahama Port Authority, the average permit fee for a 1,500 square foot structure in New Providence costs $150, whereas in Freeport, that average cost is $300 - twice the amount of the cost throughout the rest of the Bahamas. Against this background, my Ministry finds it very difficult to continue to effectively and efficiently operate in providing the building permit approval and inspection services we are mandated to perform. In this regard, an exercise to review the processes and applicable fees will be undertaken.”

Mr Davis added that Buildings Control Division data showed the number of Building Permit submissions for the July-September 2012 quarter were down 4.9 per cent year-over-year.

When it came to the fee revenues generated from these permits, the Deputy Prime Minister said there was “a steep decline” during that same July-September period compared to the year-before quarter. Revenues fell to $151,216 compared to $788,534 in 2011, an 80.8 per cent decline.

But the October-December quarter saw only a 2.97 per cent decrease in estimated building permit fees, with $246,878 collected compared to $252,083.50 during the same period in 2013.

Elsewhere, the Deputy Prime Minister said the fact that 85 per cent of the Department of Physical Planning’s annual budget – set at $1.2 million for 2012-2013 – consisted of salary payments meant there was little money left for “strategic and long-range planning”.

He disclosed that the Conservation and Protection of the Physical Landscape of the Bahamas Act is set to be amended so that the Government receives royalties for excavated material that is used as ‘fill’ to add value to land.

“Production of taxable fill material has been significantly reduced at approved sites, while other sites are exempted from royalty fees once excavated material is utilised on site. Illegal excavation accounts for a large portion of mining activity, and results in a major loss of revenue,” Mr Davis said.

“In this regard, an amendment to the Conservation and Protection of the Physical Landscape of the Bahamas Act to require payment of royalties on excavated material, whether it is used on-site or off-site, will be recommended, as in each situation the material is being used to add value to land..

“Proper enforcement of the law will help to generate funds through a more efficient permitting and prosecution process. However, this would only be possible when additional staff is provided.”