New developments
Show All
 

Articles
Show All
 
 
Articles


    Go to Article List 

DEVELOPERS MUST BRACE FOR CLOSING OF LOOPHOLE IN EIA REGULATIONS

Meeting the standards imposed by environmental regulations can drain financial resources, time, and increase opportunity costs. Therefore, real estate developers had discovered ways to avoid the burden from a lengthy procedure without violating the law.

Meeting the standards imposed by environmental regulations can drain financial resources, time, and increase opportunity costs. Therefore, real estate developers had discovered ways to avoid the burden from a lengthy procedure without violating the law.

Many developers had been successful up until now. However, the state of affairs is about to change as regulators have come to notice this legal loophole.

What are current legal requirements and business practice? According to the current environmental regulations under the Enhancement and Conservation of National Environmental Quality Act, B.E. 2535 (1992) (EIA Regulation), developers of particular projects, e.g. hotels, condominiums and serviced apartments with 80 rooms or more are required to prepare and submit an Environmental Impact Assessment (EIA) report for approval, prior to applying for a construction permit. However, because the process of preparing and gaining an approval for the EIA can take up to a year or more, developers in some cases face increasing costs of waiting before they can proceed to build.

Since the regulation only requires EIA reports for projects with 80 or more rooms, developers adopted the practice of arranging their site plans to show fewer than 80 rooms in order to avoid the need to prepare an EIA report. By combining areas of large numbers of rooms, they can record fewer than 80 rooms and apply for a construction permit right away. With permits in hand, construction can begin and the developers are freed from the burden of bloating interest payments while they wait.

As the holes get drilled and piles hammered into the ground, the developers can meanwhile prepare the EIA report, which records the actual unit number (in some cases way beyond 80) for approval. With the approval of the EIA report, they can then apply for a revision of the construction permit to record the actual room numbers without violating any law.

What are the changes? As this practice has been going for some time, the National Environment Board recently approved a draft to amend EIA regulations to close the loophole and enhance the effectiveness of environmental protection.

From our review of the amendment, the preparation and submission of EIA report requirement, particularly for hotels, condominiums and serviced apartments, will become stricter as the requirement will be based not only on number of rooms but building area as well. As a result, developers can no longer apply current practice to circumvent the requirement prior to applying for construction permits.

The amendment also takes another step in controlling the development of any high-rise or large building regardless of the purpose, by requiring EIA report s for (i) buildings 23 metres or higher; and (ii) buildings with gross floor area of 10,000 sq m or more. The chart shows the current requirements in comparison with the proposed amendments.

When will this new requirement take effect? At present, the amendment is awaiting publication in the Government Gazette. It will take effect 30 days from the date of publication.

What should we do? Due to stricter requirements, anyone who wishes to develop a project that will fall within the scope of the amendment needs to act now - either by starting development of a planned project or by re-analysing plans to ensure that the project can be successfully implemented.

From : Bangkok Post (Business section)

 
Home   |   List Property   |   Rent   |   Sale   |   New Development   |   Articles   |   Useful Information   |   Contact  
 ©2009 Right Properties Company Limited. All rights reserved.