2 June 2016, 14:00
Open Construction

A discussion session of the Gorod Moscow Center for Urban Studies on the subject of Open Construction was held at the Russian Public Opinion Research Center (VCIOM) on June 2.   The discussion tackled the matters of the developers’ attitude to administrative town-planning innovations in Moscow, the issue of reduction of administrative barriers in the industry, and the shift to electronic document management.  The construction industry has long been associated with the challenges of administrative regulation.  Difficulties associated with obtaining construction permits have been a common complaint for developers of all levels.  Today, the city itself is working to eliminate administrative difficulties in construction.  But are the developers themselves aware of this?  What is their attitude to the proposed measures?  Experts have concluded that the developers approve the reforms in the Moscow town-planning sphere; however, the level of tasks set requires the introduction of a new approach to town-planning regulation.

Kirill Rodin, Head of the Social & Political Studies Department at VCIOM and Executive Director of the Gorod Moscow Center for Urban Studies, opened the discussion session with his report, having presented tentative data of the first round of the VCIOM poll on the subject of administrative barriers in construction.   The poll selection included representatives of construction companies.  The research has demonstrated a high level of awareness and approval of reforms implemented in the Moscow construction industry.  56.3% of respondents are aware of these reforms.  Digitization of the main state services in the construction industry: from a land plot development plan to facility commissioning is approved by 80.5%.  The beginning of the network companies’ services digitization at the Portal for State and Municipal Services of Moscow is approved by 77.7%.  Cancellation of redundant procedures is approved by 76.4%.  The research deliverables (including the second round of the poll) will be fully presented by Valery Fyodorov, General Director of the VCIOM, at the Moscow Urban Studies Forum.

Elena Povetkina, Head of the Town-Planning Procedures Optimization and Control Section of the Moscow Town-Planning Department, presented a vision of target condition of all Moscow government work in the area of town-planning regulation:  ‘Construction is a complex system, and implementing changes in construction is a highly complicated process.  International experts provide quite a high assessment of what we already have in place.  New rules for obtaining own-planning documents should not disrupt the existing system’.  Ms. Povetkina noted that administrative barriers are not always necessarily a negative factor; they protect the city residents from risks related to the construction, and the matter of their elimination needs to be considered with reasonable care.  Speaking of the barriers, Ms. Povetkina divided them into three types: barriers associated with federal legislation, barriers associated with the Moscow legislation and barriers related to access to services rendered by network companies providing connection to utilities.  It is this approach that is currently used by the Town-Planning Policy Department, working to eliminate the administrative barriers.  One of the relevant objectives is to extend to network companies the standards applicable to state companies.  ‘A developer will be able to click a link in his user account and find out about the connected networks and utilities’, – this, according to Ms. Povetkina, is the desired outcome for this process.

Elena Stepanova, Head of the Investment Analysis Department of Mosinzhproekt JSC, pointed out the necessity of splitting the two processes: digitization of solutions and the very effort aiming to eliminate administrative barriers for business.  She also said that we need to draw on the experience of other countries, and specifically, Singapore, in the area of strategic documents drafting and implementation.  ‘Regulations is not only a system of provision’, Ms. Stepanova reported. ‘Its implementation requires setting up a project office, holding a number of training courses for the team which will be implementing the project, and setting up KPIs’.

Alexey Raskhodchikov, Deputy Director of External Communications at Mosinzhproekt JSC, presented the deliverables of research conducted by Mosinzhproekt in the area of the law enforcement in the Moscow construction sphere.  A legal due diligence of 60 procedures was conducted, with over 40 factors preventing efficient law enforcement identified.  Mr. Raskhodchikov mentioned vague wording of some of the rules as an example.

Mikhail Yakubov, Head of Consulting for  Development Projects at JLL, mentioned that the removal of administrative barriers will decrease the cost of facilities construction.  ‘Simplification of the procedure for obtaining a land plot development plan alone may help reduce the losses of the developers by up to 40%’.  Therefore, simplification of administrative procedures will also bring down the cost of real estate.

Ekaterina Krylova, Director of the Moscow Investors Association, provided feedback from the construction sector.  According to Ms. Krylova, not all of the developers are happy with the electronic document management system – it takes quite a long time for an application to be considered, with no feedback provided.  Ms. Krylova also mentioned that after MOEC was re-incorporated as a joint-stock company, access to its services has become more difficult for the developers.

Timur Aralov, Head of Projects Management at UEZ JSC, Micro-districts Experimental Development Department, confirmed that the difficulties mentioned by Ms. Krylova, indeed, existed.  ‘There are lots of questions we would like to ask the network companies’, he said. ‘Sometimes it takes up to 6 months to get an answer from the Mosvodokanal’.

Alexander Raykov, Director of Research at the Real Estate Economics Center of the National Research University Higher School of Economics pointed out the need for integrating solutions implemented as part of construction reforms in Moscow into the electronic government system.

Deputy Director for External Communications of Mosinzhproekt JSC
Head of Project Management of UEZ JSC Management of Experimental Neighborhood Development
Director of the Institute for Regional Studies and Urban Planning at the National Research University Higher School of Economics, Doctor of Economics
Director of the Moscow Investors Association
Head of the Urban Development Optimization and Procedure Management Office of the Moscow Urban Development Policy Department
Scientific Advisor of the Expert Center for Real Estate Analytics of the Higher School of Economics
Head of the Department for Socio-Political Studies of VCIOM
Head of Investment Analysis of Mosinzhproekt JSC
Head of Development Project Consulting of JLL
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