Run without hurdles
Moscow promises to proceed with efforts to reduce administrative procedures in the construction sector. Today, amid a crisis economy the construction business is facing serious challenges of lowering demand and reduced profitability. In this situation, cost-cutting measures are of crucial importance, including the reduction of costs for obtaining various kinds of permits and approvals. Recently, the Ministry of Construction of Russia has done a lot to reduce administrative barriers in construction. As a result, Russia has improved its position in the World Bank DoingBusiness ranking, boosting up from 124th place (2011) to the 51st (2015). In the category “Obtaining construction permit” Russia has advanced for 60 positions and moved from the 179th to the 119th place.
Russian regions make their contribution to the reduction of administrative barriers, and Moscow is one of them, being one of the country’s largest construction markets. According to the World Bank, over the last five years the timing of administrative procedures has decreased by 2.5 times.
It should be noted that the work on reduction of administrative barriers is being conducted in Moscow. There are three most important areas of activity for today: elimination of excessive administrative procedures, reduction of timing for obtaining approvals, as well as conversion services to electronic format.
[citata id=54] In 2013 Moscow cancelled the approvals of prefectures and municipal councils at all stages of construction project. These functions were given to the Construction Complex, so the system of processing documents was brought to its lowest terms.
In the meantime the list of documents required to obtain an excavation permit was reduced from 28 to 5 positions. In 2015, Moscow cancelled the city government act #857, which specified excavation works and development of construction sites. The new regulations were adopted instead, they do not include a number of excessive procedures.
Of no less importance is the fact that the timing for processing documents was reduced. From 50 to 30 days was reduced the term of state examination of standard project documentation. Now only 14 days instead of 30 is enough to obtain a certificate of approval of architectural and urban planning solution (AGR). In 7 days instead of 14 one can obtain an excavation permit, in 5 days instead of 10 – get a conclusion on the conformity of the constructed object of the project requirements.
One more initiative of the Moscow City Government is the conversion of state services in construction industry to electronic format. This work began in 2013, and by the end of 2014, 12 out of the 14 services were converted to e-format; since the year of 2015 9 services are provided exclusively in electronic format. The demand for e-services is confirmed by statistics. While in 2013 only 12% out of the total number of applications have were submitted in electronic format, in 2014 this number amounted to 33% and in 2015 it was already 70%.
Today Moscow provides 14 types of state services in the field of investment and construction activities, and 12 of them – in electronic format. The applicant can obtain online all necessary documents at all stages of construction project, starting from the land lease agreement and ending with occupancy permit.
[citata id=409] In addition Moscow has launched the program “9 Steps From Project To Object”. Within the context of this program 12 approvals were excluded from the list of mandatory procedures. As a result of optimization of administrative procedures the list now includes only 9 steps, reducing the average time processing documents to 99 days. All 9 steps are carried out electronically through the portal of state services. You can track the progress of your appeal online through the service “Developer Personal Account.”
However, today this program applies only to construction of the so-called “low-risk facilities”, which are subject to any safety restrictions and are not designed for permanent presence of people. On the long term the “9 Steps” model can be applied to other sorts of construction projects.
It should be noted that only 20% of administrative procedures from the list approved by the Government are directly related to construction activities (29 out of 141 procedures). 74 procedures deal with the issues of utility connection. The most part of complaints arises there. The city authorities are making efforts to improve the situation in this field. Until the end of the year it is planned to work out the master plan of all underground utility systems and structures within the Moscow Ring Road (MKAD). This seems to be a major source of data on the types and layout of existing and planned underground utilities and structures. The document will include all underground parts of buildings, underground utilities and their projects. This master plan will optimize the processes of connecting new facilities to utility networks and significantly reduce the timing of engineering survey work for developers.
Moreover it is planned to facilitate the procedure for construction works of small utility systems in Moscow. At present, in order to lay a small-diameter network it is necessary to obtain the same approval as for main networks of large diameter.
Developers notice reducing of administrative procedures in the city. It is recognized by many of the major actors of the Moscow development and construction market.
[citata id=327] “The faster we build the better. This is especially important in the context of declining profitability. City authorities understand this and come to meet us halfway,” said CEO of Pioneer Group Andrey Grudin. In this situation developers can predict the real timing of various procedures in construction industry and be masters of their time, and thus to determine a rational financial policy of a company.