Yangon City Development Committee has pledged to lower the wait time for applying for contractor licences from months to weeks, partly as the number of applicants decreases.
“We were receiving between 80 to 100 contractor applications for licences every month, but the number is now decreasing,” YCDC deputy head of building department U Nay Win said.
“Now we receive about 20 licence applications a month, and arrange an interview before we give permission to them.” Previously the department had been too busy to regularly hold interviews, meaning as few as four a month were held.
Would-be contractors must sit through an interview with YCDC officials to discuss their education, experience, ownership and citizenship in order to receive a licence. Each licensed contractor is allowed to build 15 buildings in total over the length of the licence, he said.
“If a contractor applies for a licence, we will try to get it to them in 45 days.”
The number of applicants for contractor licences shot up in 2011, as the construction industry started to boom. Recently, interest in the licences has waned, which U Nay Win said is caused by a few factors.
YCDC has changed the amount contractors must deposit for licences from K10 million (US$9670), to K50 million which has priced some would-be entrants out of the market.
Existing contractors were required to add in the additional K40 million with the rule change, though some contractors avoided paying.
“Some were absent [with payment], so we restricted the list by cancelling the licences of the absent contractors,” he said. “Others added K40 million to their deposits as the construction industry started to boom and lots of new buildings went up, meaning contractors needed an official licence.”
U Nay Win added there are other reasons fewer businesspeople want to enter the contracting business.
“The dreary state of the construction industry may be another reason for the decrease in licence applicants,” he said. “Another may be that there are already enough contractors in the industry.”
Contractors said they welcomed the move to speed up licensing, as it previously has taken significant amounts of time.
U Yan Aung, general manager of Asia Construction, said his firm applied for a licence in June 2014 and received it that September – a three-month wait.
While the firm had to deposit K50 million for a contractor licence fee when it first received the licence, it initially had to pay an additional annual fee of K200,000. This fee has since been increased and another fee added to bring the total to about K1.5 million, he said.
“We are now paying more charges for annual fees, as it has been increase from K200,000 to K500,000,” he said. “They have also added another fee for registration – K1 million – so we are now paying around K1.5 million a year.”
Receiving contractor licences requires a large amount of money, though when the construction industry was quiet, contractor licences were easy to get, he said.
“Many contractors entered into the industry – both legally and illegally – because construction became so popular, and then YCDC began scrutinising contractor applicants more closely on a step-by-step basis.
“The increase scrutiny is good for the construction field. But the increase of deposits and annual charges is causing more difficulties for contractors,” he said.
Other contractors have also criticised some of the engineers used for inspection as having little experience, often being freshly graduated, which causes delays for some projects.
Source: Myanmar Times