Crisis does not interfere construction


The results of the seven months of 2016 prove that the city is growing and developing in spite of financial problems.

In the PwC ranking the Russia’s capital reached the top of seven fastest developing cities surpassing even Beijing. The success was achieved due to the efforts of the Moscow authorities which ensure commissioning of the real estate and transportation infrastructure.

“The Construction complex of Moscow has overcome the key problems associated with the crisis, which lasts from the mid-2014. This does not mean that there are no problems, but at least we understand the current situation. Investors have adapted to it. And we can say that this time they have got though the crisis much easier than, for example, though the crisis of 2008-2010,” said the Mayor of Moscow, Sergey Sobyanin.

Shapochka Ekaterina Partner, Advisory, Government & Public Sector leader at PwC Russia
First and foremost it can be attributed to incessant commissioning of new real property. Over the past seven months, the Moscow builders managed to put into operation 3.7 million square meters of capital facilities. In order to understand the scale of the city construction activities, we have to bear in mind that according to the Ministry of Construction of Russia, 31.5 million square meters were commissioned in the country during the same period. That means the capital has built a tenth of all real estate in the country since the beginning of this year.

New type of homes in Moscow

Of the total volume of new buildings 2.1 million square meters account for houses. New fine buildings appeared in the capital in the framework of the Moscow state program “Housing”.
These buildings are not just concrete boxes: the authorities began to build a new series of homes in Moscow. Nine companies have already completed the process of modernization of production, this year the city can get 12 houses of new type. In total in 2018 it is planned to put into operation 83 houses a new series.

The fact that is especially important for the city budget – 89% of commissioned objects were built by investors: they completed 270 projects, of which 188 are houses.

The New Moscow is growing rapidly keeping abreast of the city. From January to July of this year Troitsky and Novomoskovsky okrugs have introduced 1,381,000 sq. m. of real estate – nearly one third of the total real estate volume of the “old Moscow”. Since the beginning of the year seven thousand people are involved in implementation of major investment projects.

New “ring” for future Moscow

Comprehensive development of the city is impossible without development of its transport network. This year is a landmark for the city’s entire transport system: it moves to a new level.

First and foremost, this autumn Moscow is bringing into operation the Central Ring (former MKZD). This is perhaps the most ambitious transport project of the recent years, which in many ways will change the life of the capital. The Moscow Central Ring (MCR) will not only decrease the load of the Circle Metro line by 15%, and the central railway stations – by 20%, but also give a powerful impetus to development of abandoned industrial areas. They are becoming more attractive to investors.

After the completion of reconstruction the length of the Central Ring will amount to 54 km. The main purpose of revival of MCR is not just a reconstruction of the long abandoned section of the railway, but to integrate it into the existing transport network of the city. The Moscow Central Ring will include 31 stations, 17 interchanges with 11 metro lines, 10 interchanges with 9 radial railway lines.

Passengers transfer will be carried out via the transport hubs (TPU) that will connect MCR with the existing Metro lines, ground transportation, existing railway network and enable to transfer to personal vehicle. In total, the city plans to build 169 TPU. To meet this end, draft plans of 100 units has been already developed, of which 30 have already been approved.
At the same time Moscow continues to develop the Metro. In the beginning of the year, the Metro stepped on the territory of New Moscow: two new stations were opened on Sokolnicheskaya line – “Rumyantsevo” and “Salaryevo”. The pace of construction will be preserved in future: by the end of the year 11 more stations will be commissioned in Moscow.

Chords and relief roads against congestion

Construction of roads is underway. In seven months of this year 31 km of new roads, 10 pedestrian crossings and 18 artificial structures were completed in the city. New ramps were put into operation at Ryabinovaya Street, the first phase of the second start-up complex of reconstruction of Volgogradsky prospect from Sadovoye Koltso (the Garden Ring) to the boundaries of the Moscow Region was completed. The reconstruction of nine outbound routs is completed, the reconstruction on the remaining four ones is ongoing.

The best proof of the fact that the transport system of Moscow is developing in the right direction is the current traffic situation: according to the TomTom survey, congestion of roads has decreased by 6% as compared to the previous year. Moscow has finally ceased to be a world leader in traffic jams.

Garden city replaces junkyards

The city authorities have focused on development of abandoned industrial zones of the capital in order to unlock their potential. The most striking example is the former industrial area of the Likhachev plant, which can become one of the most flourishing areas of the city. 38 thousand people will settle there, it is expected to create 48 thousand new jobs. The former junkyard will be transformed into a modern multi-functional neighborhood with full-scale infrastructure.

Besides the industrial areas, second birth will be given to the coastal zone of the Moscow River. Last year the redevelopment project of areas along the main water artery of the city was launched. The album of projects will be presented in November. The embankment area of the Moscow River (11.6 million hectares) should be involved in the life of the city.

The city is also renovating at the expense of demolition of dilapidated Khrushchev-era apartment blocks – five-story houses of the first period of industrial housing. Resettlement program was launched in 1998. At the moment it is completed by 93.6%. Over the past seven months, 32 houses with a total area of 108.6 thousand sq. m. were demolished.

Authorities meet needs of developers

The city authorities are not going to be satisfied with what has already been achieved. The construction industry of Moscow has great potential and great possibilities for its implementation. The Targeted Investment Program 2016-2018 has already been approved – it is focused on financing of urban construction projects. It amounts to 1.17 trillion rubles. It means not only hundreds of constructed square meters, but jobs in the industry and a stable income.

The Government of Moscow leave no stone unturned to create favorable conditions for investors and contractors. Among the key measures – reduction of rental rates for land plots and initial payments for launching of construction works, cancellation of approvals of district councils and prefectures at all stages of a construction project. It gives a great relief, greatly accelerates the pace and simplifies the implementation of construction projects. For well-timed provision of information to contractors, the Consolidated Plan of underground utilities and structures will be created; all the additional engineering and technical information will be included in development plan of a land plot (GPZU).

Lowering of so-called administrative barriers – simplifying approval procedures for receiving the necessary documents for construction – is crucial for the city development. This work was initiated by the Moscow government in 2013. By the end of that year, seven major state services related to construction have been converted to electronic format. Now 12 services are available in electronic format. That means a developer can arrange everything from GPZU on out to documents for project commissioning in the comfort of his own home or office.

This year the Russian Public Opinion Research Center (VCIOM) and Ernst&Young company conducted large-scale sociological researches. The results are encouraging: firstly, it turned out that most developers are aware of administrative reforms, and secondly, studies found that all these measures are highly appreciated by the city builders. Why?

Let’s start with the fact that they allow developers and the city to spend fewer funds: expenses for preparatory stage of construction and production costs are lowered by reducing downtime. This allows companies to maintain financial stability in times of crisis.

Moskovsky Komsomolets