'Empower States to act against errant developers'

13/07/1999 NST By S. Shanker

Penang, Mon. - State Governments are unable to interfere with delayed and abandoned private housing projects as there are no laws empowering them to do so.

Chief Minister Tan Sri Dr Koh Tsu Koon, whose State Government has been regularly on the firing line on this matter, wants the Local Government and Housing Ministry to amend laws that govern housing development in the country.

"It's time for the Ministry to make amendments and strengthen laws and regulations governing housing projects, developers and issuance of certificates of fitness for occupation," he told reporters after an inspection of  the Taman Terubong Indah housing project in Paya Terubong today.

He said the current laws and regulations only empowered the Ministry, not the State Governments, to issue licences and exert control on housing developers and projects.

"State Governments must be empowered to take stern action against errant developers who flout State housing rules and guidelines, resolve problems in housing projects hit by financial difficulties, and stimulate the pace of slow-moving projects.

"We must also be allowed to deal with delayed and abandoned projects to protect the interest of housebuyers," he said, adding that the State Government was now helpless to provide even financial assistance to private housing projects hit by the downturn.

However, Koh did not elaborate on the amendments needed to be effected to strengthten the State Government's power to handle problematic projects.

In an immediate response, the Housing Developers Association's Penang branch chairman Datuk Ong Gim Huat said Koh's suggestion to allow State Governments to get involved in troubled projects would do more harm than good to the industry.

"The present system where only the Ministry controls and issues licences to developers and projects is good enough," he said when contacted.

He, however, added that he would meet Koh to have a clearer picture on the latter's suggestion.

"It will benefit housebuyers in the short term when State Governments interfere in troubled projects, but in the long run it will encourage developers to delay and abandon projects," he said.

He said the national HDA, which has some 1,200 member-companies including 77 in Penang, is finalising a set of guidelines for State branches to impose self-regulations and discipline on members.