Measures to ensure uninterrupted work by the construction sector during the spread of the novel coronavirus infection.
Excerpts from the transcript:
Briefing by Marat Khusnullin
Marat Khusnullin: Good morning!
One of the main anti-crisis measures that we have adopted is to enable construction workers to continue their work to the greatest possible extent because construction is a driver of the economy. At the moment, 15 million people are working in the construction sector and in related industries. With their families, they make up a large percentage of the Russian population. Therefore, depending on the sanitary and epidemiological situation in a region, governors were instructed to provide builders with the opportunity to work. Most of the regions are continuing with construction work. In two of them, Moscow and the Moscow Region, there are restrictions, construction sites are closed while we wait for the situation to improve. However, the construction of infrastructure facilities is underway. This is the first big step.
The Government also made a very serious decision in terms of subsidising the mortgage interest rate. They issued a resolution which allows people who apply for mortgage loans to receive a mortgage with an interest rate of 6.5 percent. That is, there will be a subsidy to cover the difference between the bank rate and what borrowers pay in mortgage interest to limit this to no more than 6.5 percent. What will this achieve? First, it will mean lower payments for people who apply for a mortgage. We have never had a 6 percent rate before, except in the case of certain categories of citizens who were provided with mortgages through state programmes. This is the first thing.
Second, it will also safeguard the jobs of 4-5 million builders engaged in housing construction. This is one of the largest subdivisions of the construction sector. When there are jobs, there are taxes and consequently jobs for related industries.
And the third, most important thing: as of today, some 100 million square metres of apartment housing is being built in the country, with 43 percent of it being sold on an equity basis. Therefore, our key objective is to prevent the appearance of defrauded investors and long-delayed construction projects. That is, the people who purchase the housing today help to finish the construction. These funds plus bank loans are used to finish the construction of the buildings and we can be sure it will happen.
Therefore, this measure deals with several tasks and is a serious driver.
We also decided to support developers to avoid them having to pay high interest rates to banks. We are developing a directive, it will be adopted this week, to provide a subsidised interest rate to developers, so that all money that is collected through construction, all the money that the developers and constructors have goes towards further housing construction. There is also a clear condition that this subsidy will only be provided when construction is underway and no less than 90 percent of the workforce is engaged in finishing the construction of residential buildings.
Another step, we have decided to provide additional capital to the Fund for the Protection of the Rights of Citizens Participating in Shared-Equity Construction, we call it the fund for defrauded investors. We will provide an additional 30 billion roubles to this fund. This money will go to construction and new jobs. And, most importantly, as early as this year or the beginning of next year, some 10,000 people will get their apartments after waiting for many years.
Another crucial step, we have decided to provide additional funds to our state development institute DOM.RF; we will give it 50 billion roubles in the form of guarantees allowing the purchase of apartments for state needs in regions where the developers are having a hard time. It will generate additional demand for partially-built buildings, and will allow for their completion and further construction.
This is the main package of measures that we have adopted as of today; we are working in accordance with it. The decisions have been made, and the most important thing is to make these measures reach every region and every developer.
Question: Mr Khusnullin, which solutions regarding the lifting of administrative barriers are envisaged in the anti-crisis plan for the construction sector?
Marat Khusnullin: It is true that today’s administrative barriers in the construction sector are, I would say, excessive. There are about 100 agreement procedures between the idea and putting it into practice. For example, with an average residential building, or a school or nursery, it takes up to five years from the idea to completion, while the construction itself takes only two to two and a half years. This is why we have developed an anti-crisis plan with minimal procedures both in the state and in housing construction. We have prepared an entire range of amendments to the Urban Development Code, which help fast-track several procedures. In particular, public hearings can be held online due to today’s epidemiological situation.
We have prepared a lot of technical solutions that will be really useful for those who work on land, as they say.
Also, for example, we have decided that for government customers, one single tender can be submitted for design, construction and purchase. Previously, these were separate procedures that had to be carried out sequentially, that is, one after the other. Having decided that a government customer can now design and build a turnkey project, we save up to a year and fast-track all procedures.
We have also automatically extended all construction permits. The permits due to expire have been renewed automatically. The validity of urban development documents has been prolonged automatically, as have previously issued technical specifications that were due to expire. We continue to work towards decreasing the number of inspections. Currently, there are no inspections except for those needed for operational and construction safety. There are no penalties, no fines: we have cancelled everything.
We are also preparing a large range of amendments regarding purchase procedures. The first set of amendments has been issued, and the second one is underway. A major transport law, as we call it, on transport construction is also being prepared in order to immediately fast-track a large number of approvals in transport and infrastructure construction. This is current work; as part of the anti-crisis measures, we have compiled a set of these amendments; in fact, every week the Government makes a decision.
Now we are making decisions very fast. There has never been anything like this. A Government resolution is issued in 24 hours, whereas before it sometimes took weeks or months due to approvals. Laws are adopted in two or three days. The Government develops a proposal, submits it to the State Duma, the Duma quickly examines it in the first, second and third readings over the course of two or three days, and then so does the Federation Council. Today’s crisis has driven us all towards fast decision-making. And speed is one of the main factors in construction; speed directly means money. This is why fast-tracking all the procedures is one of key tasks we are working on today.
