OREANDA-NEWS. August 25, 2014. “The meeting of the Expert Council will form the basis for building up a further constructive dialogue between the antimonopoly authority and experts of construction industry”, said the Chairman of the Expert Council for Developing Competition in the Construction Industry, Stats-Secretary, Deputy Head of the Federal Antimonopoly Service (FAS Russia), Andrey Tsarikovskiy.

Deputy Head of FAS, Alexander Kinev; Deputy Director on Engineering, Capital Construction Industry Expertise Centre “Rosatom” State Corporation”, Vladimir Malakhov; Deputy Head of the Expert Consulting Center, of Public Procurement Institute, Alexander Yevstashenkov; the Board Chairman of the “Expert Community of Public Procurement Professionals” Non-Profit Partnership, Е. Lezina; national associations and other industry representatives also took part in the meeting.

The Head of FAS Department for Control over Housing & Utilities Services, Construction and Natural Resources, Vadim Solovyov, informed participants about the efforts undertaken in housing construction. “In 2013 FAS initiated inspections of the authorities and companies that have dominant position on the market of construction materials. Jointly with law enforcement bodies, FAS investigated and suppressed construction cartels and imposed administrative fines upon the violators for over 86.6 million RUB”, pointed out Vadim Solovyov.

He also discussed the problems of the economy-class primary housing market in Russia: “The main factor affecting the final costs per square meter are the costs of construction-and- assembly works”. As an example, Vadim Solovyov described the situation in the Far East where the costs of housing do not depend on the state of competition on the market, and are directly related to the trends of regional development, the growth of the population and its buying capacity. He stated that “by the end of 2014 we will complete the work on analyzing the state of the housing market in the Russian Federation”.

In conclusion Vadim Solovyov emphasized that the existing pricing system in the construction industry did not meet the requirements for developing robust engineering and project management. “The legislative framework based on multiplying and adjusting factors to already established standards makes pricing non-transparent and can result in fixing unreasonable construction prices. We propose to determine the costs of constructing state-owned facilities on the basis of market prices of constructive solutions instead of the currently used estimate standards and unit rates for technological operations”.

Experts put forward their proposals towards improving the industry that will be discussed by the Expert Council in detail at the next meeting. They made a clear statement that it is necessary to form a system of competition-development measures on setting restrictions for the revenues from general contracting services that must stimulate general contractors to execute the major part of the order on its own and make considerable investments in developing the industry.

The Expert Council decided:

- To sum up the presented information and proposals and forward them to the Ministry of Economic Development to be further submitted to the Government of the Russian Federation

- Certain issues, particular, the situation in the cement industry and technological connection of capital construction facilities to the gas-distribution networks should be analyzed by supervising FAS Departments that, if necessary, should form Working Groups

- To ask the participants present at the meeting to send additional proposals to FAS Russia on including in the permanent composition of the Expert Council

- The outcome of these measures will be discussed at the next meeting of the Expert Council.