Construction Market 2011: the year of deregulation?

30.12.2010 09:57
Articles about real estate | Construction Market 2011: the year of deregulation? 2010 builders end up with a new hope - Parliament adopted at first reading a bill that reduces the degree of market regulation by the state. However, so far to document a lot of complaints from developers and lawyers.
So that its developers under the clink of glasses and eating Olivier will have to do a detailed of painting they will fight corruption, streamline the licensing procedures and reduce construction costs, says

Not all of the soul

Related article: Artificial reform

Ukrainian Construction Association (UCA) has been actively lobbying for the bill on the regulation of urban development, adoption of which, according to Chairman of the Board of Directors of the Lion Partskhaladze, help by 90% to root out corruption in the industry and a 10-20% reduction in construction costs. The main purpose of the bill claimed by its developers - the simplification and acceleration of procedures for obtaining building permits and the introduction of the facility.

In particular, as explained to the ex-deputy minister of regional development and construction, Igor Sokolov, the number of procedures through which an investor should be held to fall from 90 to 25, and the time required to obtain a building permit, be reduced to 415-450 days to 60 days . But a number of developers, non-UCA, believe the proposed bill to simplify and reduce the exceptionally declaration. They say that they show the intention of the law - not enough, we need a detailed and clear mechanism for their implementation, and its developers have not yet offered.

Indeed, the draft is not even the main terms that are often operated on the spokesman of the ministry and UCA - "the principle of tacit consent." In fact, it is that the construction could be begin as soon as the developer will send a request for permission to create an object (eg, mail). Sounds nice and easy to be realized, and without disrupting the market.

Lawyer Vasil Kisil & Partners Natalia Dotsenko-Belous stressed that the document not only mentioned the concept of "the principle of tacit consent, but no one position is not disclosed its contents. "Those sketchy references and links to the principle contained in the bill does not provide an opportunity to understand how it should be implemented. In order to effectively apply the principle of "tacit consent" it should be used only in exceptional cases and only where there is no other way of preventing corrupt intentions of the authorities and the deliberate delaying of the process of permitting the latter.

In all other cases, the application of this principle is an unjustified, illegal and such, which can lead to negative consequences. In including dangerous to life and health of citizens ", - said N. Dotsenko-Belous. At the same time, she recalled that only in February 2010, the same principle in the sphere of economic activity has been canceled after losing its practical importance.

Excessive autonomy

In words MinregionstroyZhKH representatives explained that they develop in conjunction with UCA bill will remove a number of bureaucratic hurdles faced by builders, and they themselves can solve many issues. In particular, the document will be enshrined the concept of "zoning plan" (the term "zoning" in the project so far), which has long spoken not only developers but also architects.

This means that investors will be given for construction sites, with certain restrictions on their use (eg, destination, altitude, the width of the building), and then they will be able to build on the ground whatever, in the framework of these restrictions, not receiving extra permits.

A similar principle, experts say, has been successfully used abroad, but in Ukrainian terms it can be used distorted. For example, the bill provides investors the right to develop a detailed site plan with the zoning on the basis of contracts with local authorities. But at the same time, according to N. Dotsenko-Belous, does not provide a competitive selection of investors or developers planning documentation.

Therefore, as explained by the lawyer, referring to the current practice, each investor will try to show in town-planning documentation for the best options for a building and simultaneously create a space-planning obstacles for placing objects competitors.

True, as an active market deregulation, as proposed in the document, can be fraught with the deterioration of the quality of construction processes. It is worth recalling that, among other documents, which develops UCA, including the law on self-regulatory organizations, ie partially enumerate the functions of the main government body in the construction industry is invited to such business combinations as the UCA, the Ukrainian Chamber of Construction, All-Ukrainian Union of Manufacturers of building materials and products. But as a practice reminiscent of the market, in the same Europe to which so oriented lobbyists no practice this disengagement of the state to participate in the construction industry.

Dreams of UCA on reducing corruption and the cost of construction is also still look highly unlikely to translate into reality. Even if we assume that the long-announced by the Ministry of core principle of "single window" is working, the reality is likely to be such that the builders do not have to give hundreds of small bribes, and several large that the amount would be about the same.

Time for reflection

The bill has already started its journey in the parliament - December 17, the Verkhovna Rada adopted it as a basis, and UCA had hoped that it will be adopted as a whole until the end of this year. But the deputies went to the New Year holidays, and plenary sessions will be resumed only on Jan. 11, 2011

L. Partskhaladze admitted that the association continues to receive suggestions and recommendations to improve the document. "UBA plans to soon in the working groups in the appropriate committee BP to refine the bill taking into account the suggestions of the market and parliamentarians", - he said. So that the parliamentary recess and MinregionstroyZhKH UCA is to benefit from and improve the document, taking into account the comments made.
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