Chronic delays in the processing of planning applications and building permits is starting to impact Bermuda’s economy and is one reason why some big projects are trying to short-cut the system by asking for controversial Special Development Orders (SDOs).

If things do not improve Bermudian construction workers could soon face lay-offs because the wheels of bureaucracy are turning too slowly, warns one of the Island’s leading construction industry voices.

Alex DeCouto, president of the Construction Association of Bermuda (CAOB), has seen a worsening situation over the past 18 months to two years. The comments from construction industry workers and bosses underline what is happening as developments are delayed for upwards of a year.

Even so-called “24 hour permits” for small works have ended up taking three weeks to be approved through the planning system, according to Mr. DeCouto.

The bigger projects, such as major office blocks, can involve a delicate line-up of financiers, contractors, suppliers, architects and tenants that run the risk of collapsing if delays are overtaken by changing market conditions. For construction workers — and they can number 200 or 300 for the larger projects — that can mean being put on the verge of unemployment.

Mr. DeCouto said many construction firms had so far managed to keep their workforce ticking over while awaiting planning clearance and building permits to be issued, but the longer the delays continue the more likely it is that these arrangements will no longer be financially possible.

“We are now seeing the effects of these delays with people trying to get around them by seeking SDOs,” he said.

“I think the planning department is understaffed and very bureaucratic with lots of checks and balances — perhaps too many. Instead of only being considered by a qualified planner the applications go to the health department, to the fire department and might end up laying on someone’s desk and all this adds up to the horrendous delays.”

There was a stakeholder forum in late 2005 under Department of Management Services’ Peter Weedon, where construction industry professionals and developers were able to describe the problems and difficulties they faced. A report on that audit-type review has never been made public as far as Mr. DeCouto is aware.

Before a development can take place it first has to gain planning approval, this alone can take upwards of 10 months. Mr. DeCouto has seen such examples. But even once that approval is given there is the matter of securing a building permit, and here again delays in issuing such documentation have been known to take six months or more.

“In some jurisdictions there is a statutory time-limit for response by the local authority, which, if not met, results in automatic approval. I believe in the UK it is eight weeks. Clearly this is meant to ensure that economic investment is not stymied by bureaucratic red tape. We would definitely support such a requirement,” said the CAOB president.

The planning and building acts in Bermuda do not stipulate how long the application process should take. The haphazard situation was revealed by one architect who put in two applications, separated by a two-month gap, and received approval for the latter one first, said Mr. DeCouto.

Bermuda ‘s economy is now beginning to feel the effects as the long delays at the start of the planning and development process start to unravel at the other end with workers and builders looking around for the projects that have been scheduled but are stuck waiting for bureaucratic green lights.

“Right now I would say that we are starting to see a bit of a dip in the industry as a result,” said Mr. DeCouto. “A few large developments which might have otherwise been ‘ready to go’ have been held up in this process and builders who were gearing up in anticipation are in a state of limbo when projects are held up in the applications process.

“The larger projects in particular are complex organisms, pulled together with options on property, quotes from contractors and suppliers, tenant agreements, etc. They do not take kindly to being held up for a year or more. Inflation alone can kill a deal like that.”

As delays increase the chances of development projects coming “crashing down” before they have even begun becomes more and more likely, he warned.

“All we need is for three or four of the office blocks not to go ahead and the big contractors with 200 or 300 people have to find something else for their workers. I do not know of any lay-offs yet, but I do not want to know of any if they can be avoided.

“In the past 18 months the process has gotten worse and more cumbersome. It is also very hit and miss, you don’t know where a red flag is going to be shown.”

Mr. DeCouto would like to see action to streamline Bermuda’s planning and building application processes to bring the Island in line with other countries. A good starting point he believes would be to see the conclusions from the report that was conducted by Government 16 months ago.

If things don’t improve the number of SDOs being applied for will only increase, in his view. He said: “The current situation with regards to SDOs being the preferred route, particularly for more complex projects, will continue until such a time as the planning and building control department is able to cope with demands being asked of them.

The Royal Gazette was awaiting a response from the Environment Ministry as this story went to press.

‘Planning delays are impacting Island’s economy’