The various opinions: experts about Doing Business ranking

09.11.2017

In the end of October World Bank has published annual ranking Doing Business that evaluates the conditions for business in 190 countries. One of the indicators is “Construction permit issuance”, where Russia took 115th place for the second year in the row. The experts opinions about this result are mixed, but most part sees the positive dynamic of the last years.

The Minister of economic development Maxim Oreshkin during the presentation about the results of the ranking mentioned that Russia has been showing one of the best dynamics in last 6 years:

“The best results aare shown in connection to electricity networks, credits, registration of rights and the protection of minority shareholders”, – told Oreshkin. He also stressed out that there are some areas were changes take longer time and more difficult. Construction permit issuance is among them.

“Together with General Procuratorate and President Representatives in Federal regions created a Council that will control implementation of innovations in construction”, – told Maxim Oreshkin.

According to the Head of Russian Minstroy Mikhail Men the construction permit issuance is the key problem of construction sector of Russia. Federal authorities are trying to simplify the procedures, but local officials are creating additional administrative barriers:

“Six orders of Government that establish the exhaustive list of alignments for construction permit issuance in all markets: housing, commercial real estate, connection to engineering networks – have been adopted” – told the Minister.

Mikhail Men added that every excluded procedure is examined before disappear. It is done to find a balance between comfort conditions for developers and safety of future residents of users of facility:

“That is why the reduction of number of procedures takes time. But it is moving. Some years ago it took around 200 alignments to get construction permit, by the end of this year this number will be 103. But the main thing is to explain the system to local authorities to avoid extra alignments form them, as Russian President told”, explained the Head of Minstroy.

The reforms of administrative procedures in construction are actively done today. The Head of Urban Planning Policy department Sergey Levkin supposes that World Bank ranking does not takes into account some recent changes and it will help Russia to go up in the ranking next year:

“Experts examine countries at the beginning of the year that is why changes that happened in Moscow and Saint Petersburg later were not taken into account. It is called “late effect” when laws are adopted but changes are not taken into account. That is why Russia has the same position as last year”, -commented Levkin. Earlier authority told that Moscow has done a big step in reduction of administrative barriers in construction: more than 10,5 thousand construction and occupancy permits were issued online starting from 2013, when these services became available online.

The Agency of strategic initiatives (ASI) participates in reduction of administrative barriers. The General Director of ASI Svetlana Tchupsheva stresses out that reform is difficult and dynamic that is to fast for rankings:

“It should be mentioned that some reforms are not taken into account by World Bank, because they have been recently implemented and the legislative practice does not accumulated. I hope that next year they would be reflected in ranking. There are also some norms that work for a long time, but not counted by World Bank. It is crucial that the together with business exhaustive procedures are excluded, and entrepreneurs feel the positive changes”, – told Svetlana Tchuspheva

According to VCIOM Moscow developers have already seen the positive dynamic in the topic of administrative procedures. It was told by the Head of Moscow investors association Lyubov Tcvetkova:

“Developers do not have problems with construction permits if all documents are correct. It is possible that the Russia’s place is connected with strict control of developers by the state”.

The representatives of construction market stress out that it became much easier to do business in Moscow. Pavel Bryzgalov the director of strategic development of FSK “Leader”, who has 10-years experience of working in construction in Moscow told that he sees the significant work on reduction of administrative barriers:

“FSL “Leader” works in Moscow around 10 years, and we see the gap between the real changes in terms of reduction of administrative barriers and their reflection in rankings. Of course the real situation is more important for everyday work. Talking about the real position of Russia in Doing Business ranking, let’s hope that the work of construction complex will have reflection in next ranking”.

Deputy General Director of GK “MITC” Alexander Baikin supports this opinion and supposes that issuance of construction permit online is fast and convenient:

“The transfer of services into e-format significantly reduces the terms and resources of developers during the issuance of permits”.

We remind that today all state services in construction are transferred into e-format. The services of resource companies should be transferred in the nearest futures. The terms of passage of various procedures constantly reducing. In 2017 the issuance of GPZU has reduced form 30 days to 14, the state supervision from 28 to 14, the supervision of secondary used project documentation from 30 to 20, the expertise of cost of secondary used project documentation from 30 to 15. Together the passage of all administrative procedures takes 55 days.