In Ukraine, the new President, Verkhovna Rada and the Cabinet of Ministers. Today, the authorities are in full carte blanche to restart the country – total reformation, deregulation and construction of an absolutely new modern and competitive state. What comes of this, I think, we will see soon. Below is a very short list of important initiatives that the construction industry needs.
Cancellation of equity
In its current form, equity is a net investment tax. It turns out that the developer pays twice: the first time – directly equity participation, the second time – to create this very infrastructure. At the same time, the money collected, regardless of the size of the amounts, simply dissolves in the general budget and does not go to the development of infrastructure. But most importantly, even simplifying the administration of shared participation does not remove the corruption risks that every Ukrainian government declares a struggle. The only possible solution in this situation is to cancel equity participation.
Compulsory builder liability insurance
Today in Ukraine OSAGO is successfully operating, a similar approach should work in the construction market. Compulsory insurance, and especially by international companies, will remove a lot of questions – this will regulate both the quality of design and construction work, and generally raise the level of the product itself. Everything is very simple: there is an insurance policy – you can start building, there is no such policy – you can’t. This will allow transferring the function of monitoring compliance with all norms from the state body to a commercial structure that has a direct interest so that everything is fine. Indeed, otherwise, she will have to give her money, and then look for ways to return it.
Digitalization of construction activities
Even if the developer does everything right, this is not a guarantee that he will receive the necessary documents and the right to build. Electronic services make it possible to unify and automate all processes, thereby minimizing bureaucratic chaos. An open and transparent market will help to avoid the corruption burden, which is inevitably included in the cost of construction. When developers start playing on the field, where the rules are the same for everyone, competition will increase, and therefore the quality of the final product. The wider the range of electronic services, the greater their coverage, the better our market will be.
Bonus. Mortgage Launch
This initiative is not so much legislative as systemic. It is mortgage lending that can launch the economy of Ukraine. Today, everything comes down to cheap money, rather than the adoption of a separate law. But the sooner this option becomes available to the consumer, the better for the construction industry in particular and the economy as a whole.
Andriy Ryzhykov, CEO and managing partner of DC Evolution