Aleksandr Lukashenko meets with construction industry task force

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President of the Republic of Belarus Aleksandr Lukashenko has pointed to a critical situation in the construction industry and ordered to resolve all fundamental issues and flaws. The Belarusian President made this statement as he met with a construction industry task force on 14 June.

Aleksandr Lukashenko noted that virtually everyone in Belarus has encountered issues with construction workers or the industry in general at least once.

“The situation in the construction industry is not simply alarming, it is critical. Not just because the industry is underperforming, but mainly because all the sectors of the industry are deeply flawed. The industry fails to meet deadlines, deliver the adequate quality at a reasonable price, and is bogged down in the corruption,” the head of state said.

The President reminded that a special task force was established to eliminate flaws in the industry. The results of the work of the task force will be presented at a large-scale session hosted by the head of state in September. The task force comprised representatives of the Belarus President Administration, State Control Committee, State Security Committee, Interior Ministry, Architecture and Construction Ministry, State Property Committee, construction and projecting organizations.

“You need to make sure that development companies will eliminate all the flaws and failures revealed during the investigation. I do not want the situation when we will throw out an array of intolerable issues and failures in the construction industry at the September session and then try to come to grips with them. The principle is as follows: you reveal it – you make sure it is rectified,” Aleksandr Lukashenko said.

The head of state demanded that all the suggestions, recommendations and orders of the task force should be immediately executed “not only on the level of bricklayers and company chiefs, but also on the legislative level”.

Aleksandr Lukashenko noted that he assigned top officials to this task force for a reason. They are to make sure the work is done properly. He added that the most common issues in the construction industry lie on the surface and are much spoken about; however, the major objective of the task force is to study the underlying issues in the industry. “I strongly recommend you and want you to rectify as many flaws as possible during the work of the task force,” the President said.

Aleksandr Lukashenko pointed out a great number of problems in the construction industry in Minsk.

“The Minsk City Council either employs only corrupt officials in high offices, don’t take offence, the fact is the first deputy [chairman of the Minsk City Executive Committee] has been convicted. And look at the size of those bribes - $250,000! It is a lot of money and it means a lot,” the President noted. “I intentionally underline problems in the construction industry in Minsk. It is the start of all things. And Minsk should be shaken up in a way to discourage anyone from working bad!” stressed the President of Belarus.

Head of the Belarus President Administration Andrei Kobyakov told those present at the session about the main flaws in the construction industry.

The official criticizes local authorities for the lack of control over the assignment of lands. “The majority of lands are allocated to the developers free of charge, for instance, for housing construction or the implementation of investment projects, which is not always meets the interests of the state. Free land allocation often means higher profits for the developer, not lower prices for housing. The majority of investment projects, which get land free of change, are also difficult to call important for the state,” Andrei Kobyakov noted.

In his words, the executive committees still delay the preparation of documents for land plot selection, backdate decisions, lobby for the interests of commercial structures in the issues regarding the assignment of lands under construction.

Aleksandr Lukashenko stressed that any shortcoming needs an immediate response.

“Once a drawback have been revealed, for example, in a so-called investment project, set forth a date for its removal, i.e. make the investor pay what he must pay to the state or the town. Once you set up the date, it should be fulfilled without any delay. Mr Yakobson conducts the relevant checks. Only in that way we will be able to bring discipline to the area,” the head of state said.

“If there is a problem, any facts, we need an immediate response,” the President stressed.

Special attention should be drawn to construction prices. Development of new norms for defining the cost of construction, i.e. the norm for resources consumption in natural terms, legs behind the practical implementation of new technologies and materials. The industry still uses outdated norms, applies various multiplying coefficients. As a result price formation is nontransparent and unreasonable.

“The current norms on defining the cost of equipment have not been revised for a long time, while the equipment itself has been constantly improving, the ways of its assembling have become more simplified. This leads to higher prices in the construction industry,” Andrei Kobyakov said.

In his words, the volumes and the cost of building and assembly works are overrated. Contractors often use the budget resources inefficiently and with the violation of laws.

Another issue that needs to be seen to is the failure to meet the deadline of construction projects. As of 1 April 2013 housing construction was in progress at 2126 sites. Of them 715, or over 33% failed to meet the deadline. It is one of the main factors leading to the increase in the cost of housing.

The head of the Belarus President administration stressed that the quality of construction operations is low. In 2012 about 32,400 defects and violations of construction regulations were discovered by the state building inspectorate bodies. Over 1,000 officials have been brought to responsibility. “However, the problem has lingered on and there have been no significant improvements yet,” Andrei Kobyakov said.

He underlined that the executive committees, the State Control Committee and the Presidential Administration are still receiving a significant number of complaints from citizens and legal entities concerning the quality of construction. In 2012 there were 74 such complaints.

Another drawback is a formalistic approach which the technical inspectorate and the state building inspectorates apply to the discharge of their functions. “These organizations keep an eye on technical guidelines only and ignore the real amount of construction materials and work involved,” Andrei Kobyakov said. There is a practice when developers pay from $100 to $200 to state technical inspectors for each visit. When the object is commissioned the state building inspectorate officials are paid from $3,000 to $5,000.

Andrei Kobyakov pointed out to the inefficiency of capital construction departments at local executive committees. The cost of 1 square meter of accommodation has been rising because construction falls behind schedules. The local authorities attribute this problem to the lack of builders due to their allegedly low wages compared to the wages in Russia. However, the State Control Committee revealed that one of the reasons behind this situation is the poor performance of the capital construction departments, first of all those in the administrative districts in Minsk. The latter are characterized by rapid staff turnover and low professional level though their average monthly salary reaches Br10 million.

According to Alexander, the main goals of the session were to discuss the current state of affairs in the construction industry and determine measures that are to be taken.

“Decisions should be tough and well-defined, without any protraction and red tape. Once you reveal a problem, make an immediate response, it should be fulfilled without delay at any level. The commission is of a direct-acting type,” the President stressed.

“If someone makes mistake, let him correct it. If someone does something intentionally, make him answer for it. You know the right place for those who corrupt the construction industry, who violates the law. Your have people who will ensure the implementation of your decisions.

“We should address the problems in time. I hope you will be able to meet the challenge,” Aleksandr Lukashenko said addressing the construction industry task force.

Aleksandr Lukashenko demanded maximum openness from the construction industry task force and regular media coverage of its activity. According to the President, there should be news, articles, interviews, press conferences, talk-shows and analytical materials.

“Mass media should inform the public on your work on a regular basis. Nothing should be hidden. Otherwise there will be no effect,” the head of state stressed.

Aleksandr Lukashenko added that all necessary resources should be used for an efficient work of the task group.