Developers say they will pass on new Mepa costs

The planning authority would have to charge higher permit fees to fill its kitty with another €6 million, costs which developers say they will eventually be passing on to consumers.

The government announced in the Budget it would stop the Malta Environment and Planning Authority subsidy to make the agency self-financing.

But developers are not amused by the decision and are expecting some form of hike on Mepa's fees.

"The construction sector is constantly hammered by higher costs and impositions. The Budget announcement was news to us but we were assuming permit fees would go up," developer Sandro Chetcuti said.

The decision would now probably lead to substantially higher fees, he said, at a time when the construction sector was passing through a bad patch.

Mr Chetcuti, who heads the construction and development section of the Chamber for Small and Medium Enterprises - GRTU, insisted the tariff hikes would eventually be passed on to the consumer.

Developers would not be complaining about the matter, he said, as long as the authority became more efficient in processing permits.

"The service we get is not good and permits take months and sometimes years to be processed. Unclear policies hamper planning officials from making quick decisions and local plans are already changing, creating an unsure environment. The least we expect is for the proposed planning reform to address these problems," Mr Chetcuti said.

According to Mepa's annual report for 2007, the latest available, the authority relied on a government subsidy of €6.2 million to balance its books and was forecasting a subsidy of €5.6 million for 2008.

The authority already part-finances its own operation through the various fees it charges but on its own this is not enough to cover all costs.

In 2007, Mepa raised €9.3 million in revenue but had a recurrent expenditure of €14.6 million.

An ordinary application for alterations to an existing building, which are the bulk of applications, costs about €35. On the other hand, an application for the construction of a brand new block of flats would cost about €350 per apartment.

Application fees continue to increase for other properties with that for a villa costing about €2,000.

On the lower end, a compliance certificate issued by the authority giving applicants the right to apply for water and electricity meters costs almost €12.

Speaking after the Budget, Prime Minister Lawrence Gonzi said the government did not want to subsidise developers and people were expected to pay for a more efficient authority after the planned reform kicked in.