Национальная палата предпринимателей Республики Казахстан «Атамекен»
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06 Марта 2018
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On March 6, NCE RK "Atameken" held a meeting of the Council for the Protection of Entrepreneurs' Rights and Counteracting Corruption under the chairmanship of Kairbek Suleimenov, where the issue of measures to reduce corruption risks in the sphere of architecture, town-planning and construction activities was considered.

The construction industry is one of the most corrupted sectors of the economy, the deputy of the Mazhilis Amanzhan Zhamalov said.

"The analysis showed that the main problems that generate administrative barriers and corruption risks in the sphere of architecture, town-planning and construction are legal support and law enforcement practice in this industry, which becomes an insurmountable obstacle to reducing the amount of procedures and business expenses," - the deputy believes.

Yeldos Ramazanov, Deputy Chairman of the NCE Board, reported about corruption risks.
"There are more than 2,000 subordinate acts regulating the construction industry in Kazakhstan, of which 130 are normative and technical documents, developed in 2011-2015, and they were published in violation of the law," - Eldos Ramazanov said.

Members of the Council noted that corruption in procurement in the construction sector is most prevalent in the country and is based on the fact that using "loopholes" in the law, organizers of 50% of procurement  make it without competitive procedures - from a single source. Price dumping in public procurement for the provision of works and services in construction activities has become widespread and it shows that the Ministry of Finance of the Republic of Kazakhstan, as an authorized body in the field of public procurement, does not have any real tools for its suppression. The collision of land and construction legislation, the lack of legal regulation of procedures related to determining the purpose of land for construction entail additional financial burden on business, limit the rights of private property and create artificial barriers to business.

Participants from the regions complained about this fact through videoconferencing.

"Currently, 28,500 construction licenses have been issued, and there are only 300 active companies, which are familiar to  consumers and competitors. The question remains: what does the others do? According to the publicly available information, you can buy a license of the 1st category on the Internet for approximately KZT 18 mln. To solve this problem, "Atameken" proposes to create a single republican register of construction companies," - Yeldos Ramazanov suggested.

Alexander Belovich, the Chairman of the Committee for Construction, Production of Building Materials and Housing of the Presidium of the NCE, added that because of such "pure" companies that bought the license, professional construction companies suffer.

"You couldn't take back 55 thousand issued licenses, it is like taking back students' diplomas. I propose to cancel licenses as it was done in the Russian Federation. Yes, it brought some costs, and possibly at the moment things aren't so great, but buildings did not crumble. Self-regulatoring organizations regulate this process by theirselves. Business, will not allow an amateur when issuing admission to the market,"- Alexander Belovich said.

During the discussion it was also noted that the construction of the facility legally contains 11 established procedures that carry corruption risks. In practice, there is a problem when the developer plans to execute building on a land plot purchased from the third parties and if it is not used within 3 years from the moment of its provision by the akimat, the land inspectorate seizes it.

"Atameken" proposes a period for development to be calculated from the moment the developer obtains the rights to a land plot, not from the moment of its granting by the akimat. The land plot should be provided for the normative construction period, as established in normative and technical documents, not for 1 year, as in practice, and also to approve the rules for identifying unused land with the reclamation criteria.

Another problem are examinations of the State Architectural and Engineering Inspection. With regard to technical supervision, such checks are not recorded. In addition, the Committee for Construction and Housing is authorized to conduct examinations of local executive bodies. And CCH, under the pretence of these checks, has the legislative opportunity to visit the construction site.

"It does not matter which authorized body will oversee the industry, the question is that distinct regulation of the work of the controlling bodies is necessary. The inspector should clearly know his functions and responsibilities. If he comes, that means he must notify what is the purpose," - the Commissioner for the Protection of Entrepreneur Rights Bolat Palymbetov says.

Participants stated that such inspections should be registered and conducted with mandatory notification to entrepreneurs. This will protect both business and officials themselves.

"We do not check the business, but we check the local executive bodies. We do not have time to visit the construction sites, I have only 8 inspectors. They check the local SAEIs, local architectural offices, construction bureaus, if there are complaints. There are also planned inspections of the akimats, but not of the business," - the chairman of the Committee for Construction and Housing of the Ministry for Investments and Developement of the Republic of Kazakhstan Markhabat Zhaimbetov commented.

During the meeting, the Council members and deputies stressed that the construction industry nowadays has high importance, taking into account the "Five Social Initiatives of the President", announced by the Head of State on March 5, 2018, in President's address to the people on development of new mechanisms for achieving the goals of the initiative: "New housing acquisition opportunities for each family." The industry must have effective protection against administrative barriers and corruption risks.

"Today's discussion showed that the main problems that give rise to the administrative barriers and corruption risks in construction sphere are insufficient legal support and discordant law enforcement practices, which are obstacles to business. It is necessary to establish order in the constuction sphere legislation. One of the solutions is the adoption of the Town Planning Code," - Kairbek Suleimenov summed up.

At the end of the meeting, the Council made recommendations to the state authorities on the elimination of the noted violations.

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