Actuality August, 2007.

About 30 percents of an apartment cost are grafts which builders pay to the officials in Russia

Nowadays building industry demonstrates steady growth. So, according the Federal Service of State Statistics of Russia, in the first half-year of 2007 the volume of building in the country as compared to the similar period of the last year increased by 25,5 % and made 1189,3 billion of rubles ($47,5 billion). The impression might be that bus iness in this sector of economy is favorable, as nowhere else. However, it is also difficult to find rivals on the amount of problems of building industry.

“One window” for all officials

Difficulties begin not on a building site, but on the stage

of the beginning of a project.

Progressive development of industry has already slowed down for a number of reasons. One of the main ones is terms of agreement. “For example, for a 100 apartment building it is necessary to get from 170 to 180 agreements,” a specialist notes. In the total all process of agreement takes about a year on the average. In other words, sometimes it is faster to construct a building, than to sign necessary documents.

In practice it results not only in the lengthening of terms of substantial completion, but also to the growth of cost of the real estate. As the vice-president of the national development fund of market of the real estate and valuation committee activity Vladimir Gerasymenko notes, that in fact today about 30 percents of the cost of apartment make grafts which builders pay for acceleration of paper work.

Creation of “one window” system is able to change the situation. In this case builders could get all necessary permissions at once. Already at the beginning of this year the under-secretary of the regional development of the Russian Federation George Tyrtyshov presented the project which will allow to simplify the process of passing of examinations at building of objects. According to this document all agreements will be conducted in one organ.

Now companies have to undergo 13 examinations and collect about 180 signatures.

“Transparent” finances

There is no doubt that, many problems in building industry are related not only to bureaucracy but also to internal reasons. There are the results of the research «Automation in the management of business-processes in building” that show that the most companies have untapped reserves for the shortening of terms and cost

of buildings.

Having analyzed operations of more than 50 companies – leaders of the industry, experts came to the conclusion: only 12 percents of organizations have more than 80 percents of business-processes regulated, 63 percents have only 30-50 percents.

In other words, only 12 percents of building companies have no problems with their documents, but only for 80 percents. And in the majority of other firms there are wide possibilities for the misdistribution of money and other means.

In the West today there is enormous interest to Russian building industry. The low financial transparency of market is that stops investors.

To improve the situation in th is sphere

is on behalf of building companies.

The main index of financial transparency is forming of accounting to international standards. Presently, according to experts, only 6% of the polled building companies work this way.

Where to look for skilled personnel ?

Another important problem of this segment of economy is the deficit of skilled personnel. According to the observations, today at the labor-market quantity surveyors, foremen, designers, architects, specialists of the agreement are called-for.

According to Svetlana Rychkova, for the most applicants the motivating factor, together with adequate remuneration package, is the prospect of professional growth in a company, for example, possibility of the further training and linguistic courses.

On the whole, according to the prognoses of recruiters, a strained personnel situation in the building sphere will continue.

Now the demand of housing market far exceeds possibilities of industry. According to the first vice-premier Dmitry Medvedev, by 2010 in Russia more than 80 million of square meters will have to be brought into service.

In addition, realization of the program “Affordable habitation” will entail demand for skilled personnel not only in Moscow but also in the regions of Russia.

One of consequences of building industry crisis of 1990th is that presently the considerable part of professionals is not young people already. Therefore it is necessary to stimulate the appearance of young people in the industry and give them the possibility to adopt the practices of elder generation. At reasonable approach and personal interest of employers the potential of the Russian young people is enough to provide the market with skilled personnel, – a consultant notes.

The sharpness of skilled question is compared by the level of complication with infrastructural problems accumulated for long years. Already legendary topic of “bad roads” and railway communications is also urgent in building sphere. Such problem, as absence of fair number of carriages and locomotives at the “Russian railways” is process of solution.

On the whole, it is possible to say that the cost of future “square meter” include not only expenses for the building of object, but also for the creation of infrastructure. According to the leader of the Federal agency of building and housing and communal services Sergey Kruglik, the way out of this situation could be the separation of expenses. “We are sure, that the level of the budgetary system (regions of the Federation, municipal corporations) must be responsible for building of the objects, and investor and builder have to bear direct responsibility for the erected building. In this case a buyer will pay exactly for an apartment, but not for the whole associated infrastructure, and also the possibility to see the true level of the real expenses and declared price will appear,” Sergey Kruglik notes.