COMPARATIVE STUDY OF THE DEVELOPMENT CHARGE SYSTEMS

Abstract

Development Charge, which is one of the many development considerations to the developers, has been a controversial issue since its introduction in 1964. Amendments were constantly made to the system to satisfy the needs of both the authority and the developers. More often than not, the desires of both parties are conflicting. The Ministry of National Development recently introduced the revised fixed rates system which aims to satisfy the needs of both parties. The writer had attempted to study its effect on the developers. A comparative study of the systems was made to examine the superiority of the revised system. The revised system adopts simplified planning parameters and table of prescribed rates. The two components of the new system have made it more transparent, auditable and most important of all, provides certainty to the developers. On the other hand, the revised system has some inherent weaknesses. The revision of rates may be an exogeneous factor influencing developments and may cause government to indirectly lead the market. The geographical sectors may also encourage prime land development within a sector at the expense of other sites. This could result in inequality to some land owners and developers. The study has shown that the majority of developers favour the revised system as it provides a greater degree of certainty and convenience. These qualities are vital for the successful completion of any development project. Developers believe that a trade-off would be necessary and a slight degree of inequality is justifiable.