Climate warming on construction sites of Moscow
In 5 years’ time the terms for approvals of documents have decreased by 2.5 times – and this is not the limit
It is known that the bureaucracy is able to kill any initiative at the grassroots level and stifle the noblest impulses. Delaying approvals of documents interfere with development companies as well as ordinary Muscovites who have to wait longer for occupation of newly built apartments or opening a supermarket or a clinic in the neighborhood.
In recent years, Moscow authorities have radically changed the policy in respect of administrative barriers. Developers now do not need to get approvals from prefectures and district councils; the number of obligatory documents to be provided by developer is sharply reduced; main state services in construction industry are converted to electronic format. There is no doubt that this measure is aimed at supporting the construction industry which employs nearly a million people in Moscow. Less paperwork means a shorter period for implementation of projects, and less stress that is also important.
Together with representatives of the Moscow Construction Complex, we tried to identify areas in which the reduction of administrative barriers is evident.
The first thing is elimination of unnecessary administrative procedures. The second one – reduction of terms of necessary procedures. And the third one is transferring services to electronic format. Let’s now consider the facts and figures on what was done in each area.
The elimination of excessive administrative procedures appears to be a real breakthrough on the part of the authorities. Few people know that only 20% of administrative procedures directly concern the construction activities from the exhaustive list, compiled by Ministry of Construction of Russia.
“Now this list includes 141 procedures. Only 29 of them are directly related to construction activities,” said the Head of the Moscow department of Urban Planning Policy Sergei Levkin, “74 procedures relates to issues of utility connection. It is a headache for all developers and investors, as it causes the most complaints”.
The year of 2013 was notable for two innovations related to elimination of administrative barriers. Approvals by prefectures and district councils were cancelled completely at all stages of a construction project in 2013; these functions were transferred to the Construction Complex. At the same time, a list of documents required for getting an excavation permit shrunk to 5 from 28.
The latter deserves a greater detail.
Excessive procedures becomes history
In May, 2015, a developer’s nightmare – a decree # 857 of the Moscow Government regulating earthwork preparation and execution (so called “land excavation decree”) was canceled. Due to it a developer had to collect a stack of papers, now he has to submit only two of them – a job schedule and a method statement. UATI will collect all the rest documents via interagency interaction.
It was one of the long-standing issues so far. Methods of interdepartamental cooperation have developed and the federal laws on urban planning activities also have changed. Bearing in mind the necessity of changes the new team of the city government has launched formulation of proposals to reform the regulation of land and construction works as late as in 2012.
According to new regulations the following redundant procedures are excluded: conducting geotechnical expert examination; approval of the State Traffic Safety Inspectorate of design documentation for works related to damaging the road surface dressing, changing or limiting pedestrian and vehicle traffic; getting Gossanepidnadzor’s approval (the State Committee for Sanitary and Epidemiological Oversight) of construction organization plans and method statements for excavation; getting a report on compliance with civil defense requirements and emergency prevention for the construction project, approval of land improvement design for utility exclusion zones, experts sum up. As a result the procedures regulating earthworks has been very clearly formulated: now there are deadlines, exhaustive lists of obligatory documents, and clear grounds for refusal. Now we have a list of certain cases in which excavation permit (order) is required.
Innovations are aimed at significantly facilitating the work of construction companies. Facilitation of procedures leads to cost cutting and speeding up the terms of facilities’ commissioning. A public servant cannot request any additional documents. In case of misadministration the Construction Complex recommends to call on the hotline +7(495) 699-41-47 for prompt response on issues of violations of established procedures in construction sector.
It is also important that the Construction Complex is incorporated in the unified system of interdepartamental cooperation. Therefore public servants are prohibited to request documents available in other governmental agencies – it is strictly forbidden. Documents are requested directly through the integrated interdepartamental online database.
9 Steps from idea to its implementation
Reducing the timing for necessary procedures is another crucial step made by the city officials to create favorable conditions for investors and developers.
State examination of standard design documentation is now carried out in 30 instead of 50 days; for non-standard it takes 45 instead of 50 days. 14 days (instead of 30) is enough to issue a certificate of approval of architectural and urban planning solution; 7 days instead of 14 takes obtaining an excavation permit; 5 days instead of 10 is needed to issue opinion on the conformity of a constructed object of the project requirements.
Now the Moscow Construction Complex pilots the new project of 2016 under the provisional name “9 Steps From Project To Object”. Launching in the midst of the crisis this program can significantly reduce financial costs of construction companies. In case of no claims about documents these steps can be passed in 99 days at an average.
This term does not include the time for collecting documents, designing and construction works and is evaluated according to the methodology of the international experts of the World Bank, explain the experts.
Applications are submitted electronically via the portal of state services. The process can be tracked online in the “Personal Account of Developer”.
Who falls within the scope of the new system? It is clear that the simplified procedure is not suited for technically difficult, unique or high consequence facilities, such as Metro. In the latter case, the inspection of the construction project is done by federal authorities – Rosglavekspertiza and Rostekhnadzor. Supervision and examination of standard projects such as apartment and office buildings is carried out on the city level (Mosgosstroynadzor and Mosgosekspertiza).
The group of low-risk facilities includes low-rise buildings (up to three floors), warehouses, etc. There is no supervision and expert examination for them. Developer can simply get a construction permit and an occupancy permit – that is all he needs. The quality of construction is guaranteed by the admission of self-regulatory organization.
It is expected that after testing the program “9 steps” the experience of facilitation can be extended to more complex projects.
E-services available at all stages of construction
Paper document flow in the age of computers looks quite archaic to put it mildly. But until recently the clumsy bureaucratic machine was stuck to the old-school practice refusing to convert to electronic technologies.
The reform of transferring services to e-format started in 2013 with seven services. By the end of 2014 this figure reached 12 services out of 14. Since 2015 nine services are provided only online. Demand for online services is confirmed by the positive dynamics of online state services. In 2013 only 12% of all applications were submitted in electronic format while in 2014 this figure stood at 45% and in 2015 reached 70%.
“These arrangements gears up capital flow in the construction industry, and of course it makes the procedure of obtaining public services open and transparent,” notes Deputy Mayor for urban policy and construction Marat Khusnullin.
The plan for 2016 includes conversion of the following services to e-format: Development plan of a land plot (GPZU), certificate of Architectural and Urban Planning solution and Passport of Color Appearance. The service of audit of cost estimate for capital construction projects will be provided in electronic format.
“In the coming years we will finish the development of a full range of e-services for all stages of investment projects – from holding land auctions to commissioning facilities,” said the Mayor of Moscow Sergey Sobyanin.
According to the World Bank, the time required for administrative procedures in construction industry of Moscow fell by 2.5 times in a 5-year period. Due to the measures taken by the Moscow government in 2015 the country gained 51st position in the index “Dealing with Construction Permits” (in 2011 Russia resided on 124th position).
Marat Khusnullin, Deputy Mayor for urban policy and construction
In 2016 six urban-planning standards will be facilitated in Moscow: design of educational buildings, facilities of health care, civil defense, industrial waste utilization, sports facilities and utilities systems. This will lead to facilitation in designing, reducing timing and cost for construction works. Ultimately these steps should result in the improvement in the investment environment in Moscow.
[citata id=129]Artem Kuznetsov, Chairman of the board of directors of GUTA-Development company
Of course, investors experience the reduction of administrative barriers. As a coordinator of the club of investors I work on simplification of such barriers related to the national register. In recent years, we have opened large offices for major developers. We do not mean any prejudice or disadvantage to the public. These offices meant to serve only major legal entities and developers, thus they greatly facilitated the registration procedure.
[citata id=409]Alexander Ruchiev, President of Morton GC
Over the last years the Moscow region advanced a lot in terms of reducing administrative barriers. Processing of town-planning documentation became simple and clear.
[citata id=191]Andrew Grudin, CEO of Pioneer Group
Members of the Investors’ Club, developers notice the reduction of administrative barriers in Moscow, stressed Andrey Grudin. Today Moscow authorities have assumed a position of maximum support regarding approval of urban development documentation. ‘They support investors and contractors in this respect and understand that it is necessary to meet assumed obligations on time. It is especially acute amid contracting profitability and more expensive working assets. The faster we build and the quicker projects finish the more lucrative it is, sums up Andrey Grudin.