Russia relieves administrative burden on construction industry

A vigorous construction industry remains one of the key factors in stabilizing the Russian economy. The government continues to pursue a consistent policy of reducing the administrative burden on the industry.

Pavel Lisitsyn / RIA Novosti

Government Resolution No. 701 of April 19, 2022 simplified the procedure for approving the materials, products, structures and technologies for use in construction. This should reduce the risk of building materials shortages due to external restrictions and accelerate the industry’s transition to affordable analogues.

The resolution cancelled the separate “ministerial” and “agency” procedures, making approving Russian-made building materials simpler and faster – from 90 to 10 working days. The new procedure relies on a one-stop-shop system. Furthermore, the Stroynadzor construction regulator will now take into account test results from foreign labs. Also, the technical certificates of suitability for previously approved materials, structures and technologies will be automatically extended by another two years. It should be understood that the change will not affect verifications of the material’s suitability – only reduce the number of supervisory authorities, which often duplicate each other, and optimize the coordination between various state agencies. Going digital will also play a significant role in reducing the time.

The state appraisal of project documentation has also been simplified. Government Resolution No. 579 of April 4, 2022 took effect on April 14, simplifying procurement of engineering equipment. This is especially relevant for projects where construction is in progress, to avoid possible downtime due to prolonged approval of the replacement equipment. Unfortunately, equipment remains a weak point in import substitution in Russian construction, and the share of foreign supplies in this segment can reach 30%, 50% or more. Specialized equipment for medical facilities, lighting and multimedia is largely imported. Until recently, using equipment that differed from the initial project specifications involved a re-evaluation of the entire project. Now, if the change raises the estimated cost of construction by less than 30% or RUR 100 mio ($1.5 mio), developers will be able to amend project documentation without calling a new expert evaluation. If these limits are exceeded, a new evaluation will be required, but in a simplified manner and free of charge. The list of documents to be provided has been reduced, and it will take no more than two weeks. In addition, after a state re-evaluation, projects will not be required to undergo a separate environmental or historical-cultural examination, because the state appraisal procedure includes an evaluation of their compliance with environmental safety and cultural heritage regulations. The reduction of administrative procedures will accelerate the construction of new facilities by at least two or three months, which means that the cost of construction will also go down.

The construction industry is already feeling the effect of reduced overregulation; new projects are being developed faster. As developers are looking for new partners both in the domestic market and in Asian countries, the recent legislative changes have simplified the construction industry’s work and allowed for faster approval and use of replacement materials instead of suspending projects. Along with reducing excessive regulation, demand for new property needs to be supported to revive the industry. Unfortunately, the demand for commercial real estate continues to decline, albeit slowly.

By Alexey Khomenok CEO, G5 Architects

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