12-06-2020
In May 2020, the Construction Sector team of BRDO conducted a survey on the reform of the state architecture and construction inspection among construction market stakeholders, such as international, national, and regional construction companies, contractors for design, expertise, and technical supervision works (services), developers and other companies.
BRDO experts planned to assess the impact of resolutions No.218 and No.219 of 13/03/2020 on liquidation of the State Architectural and Construction Inspection (DABI) and creation of three new bodies adopted by the Cabinet of Ministers of Ukraine, analyze the views of market stakeholders on electronic services in construction, professional certification of contractors, market surveillance, as well as pre-trial appeals of action (inaction) of administrative service providers in construction and their responsibility through questionnaires.
We received 84 fully completed questionnaires, and another 193 respondents answered certain questions selectively. In total, the stakeholder survey covered respondents from 13 Ukrainian regions and the city of Kyiv.
Almost 84% of respondents addressed architecture and construction control authorities during the last year. More than 38% of them visited DABI departments in person, almost 28% – used CNAP (administrative service centers) services, slightly more than 13% of respondents sent regular letters, 9% – e-mails or forms through the website, and about 8% used e-cabinets for developers.
More than 51% of respondents believe that providers of construction permits should not check the documents submitted for violations of urban planning terms and restrictions and non-compliance with construction rules and standards. According to the respondents, these aspects should be checked during the examination of expert documentation.
36.3% believe that providers of construction permits should make a check.
Respondents mainly support the distribution of powers to provide administrative services (issuance of permits, certificates, etc.) and supervision/control functions in construction between different authorities. More than 63.3% support such a reform. Almost 37% do not support this idea.
More than 68% of respondents do not support the suspension of architectural and construction control measures at construction sites until the State Inspection of Urban Planning begins to exercise its powers and functions.
Only 21.5% of respondents believe that the suspension of architectural and construction control measures will not affect the market. The vast majority of respondents believe that the suspension will lead to negative consequences.
70% believe that this will lead to an increase in violations of the urban planning legislation during pre-construction and construction works.
Almost 60% predict an increase in the number of unauthorized constructions.
33% of respondents believe that the suspension of architectural and construction control will lead to 1) an increase in the number of citizens affected by construction scams, and 2) an increase in the number of unfair competition cases.
Only 41% of respondents support the transfer of architectural and construction control powers to private inspectors who obtained professional qualification. Almost 59% of respondents are opposed to this idea.
68% of respondents believe that the licensing of economic activities for the construction of CC2/CC3 facilities is justified. 32% are against such licensing.
The majority of respondents (almost 58%) believe that the cancellation of licensing of economic activities for the construction of facilities will reduce the quality of construction.
42% believe that the cancellation of licensing will not affect the quality of construction.
69% of respondents support the decentralization in terms of construction permits and building commissioning. Almost 31% of respondents have the opposite view.
Almost 47% of respondents say that they had problems with their economic activity due to non-compliance of some provisions of resolutions No.218 and No.219 (on the liquidation and optimization of DABI) with legal acts with the highest legal force since the adoption of above resolutions by the Cabinet of Ministers of Ukraine.
53% of respondents say that they had no problems.
The vast majority of respondents (75.3%) say they expect problems with their economic activity in case of failure to bring the adopted CMU resolutions No.218 and No.219 (on the liquidation and optimization of DABI) in line with legal acts with the highest legal force (laws).
Regarding advantages of the format of the architectural and construction control reform proposed by resolutions No.218 and No.219 (on the liquidation and optimization of DABI):
The following advantages were also mentioned:
The respondents expressed some hopes for the launch of effective market control and surveillance. The temporary suspension of inspections, elimination of conflicts of interest within the DABI, simplification of the control procedure, introduction of checklists, and a risk-oriented approach in the field of architectural and construction control are among the positive aspects mentioned.
Additionally, there is a proposal to transfer architectural and construction control functions to the MIA (Ministry of Internal Affairs) departments. One respondent has the impression that the developers have initiated the reform to reduce control over the construction process.
Regarding the shortcomings of the format of the architectural and construction control reform proposed by CMU resolutions No.218 and No.219 (on the liquidation and optimization of DABI):
More than 17% of the answers contain information on the duplication of functions and unclear powers of new authorities.
11.5% of respondents say that the creation of 3 agencies instead of one is the main shortcoming of the reform, which, in their opinion, will only lead to an increase in corruption.
The following shortcomings were also mentioned:
These options have more than 8.5% of answers each.
According to the results of responses, the options regarding the generally negative attitude to the reform and the non-compliance of adopted resolutions of the Cabinet of Ministers with the current legislation have 5.7% each.
Respondents made some comments on the personnel problem (lack of (professionals) certified specialists who should perform control functions), lack of adequate transition period, lack of regulation of the liability of officials for dishonest actions. Market participants also expressed concerns about the temporary suspension of works and the transfer of powers related to the construction of CC2/CC3 facilities to certified private inspectors.
The vast majority of respondents (94%) support the introduction of the Unified State Electronic System in construction.
The survey respondents mention the following main priority services that market participants expect to be implemented electronically in the e-cabinet:
The respondents mention the following main services that market participants additionally offer to be introduced electronically in the e-cabinet:
Also, survey participants propose to expand a list of information services that may be available in the system through:
The following suggestions and comments on the establishment of processes in the sector were made:
The vast majority of respondents (almost 65%) support the expansion of the list of contractors performing construction works subject to professional certification. 35.4% of respondents are opposed to this option.
More than 60.5% of respondents believe that expanding the list of persons subject to professional certification will improve the quality of construction. Almost 40% do not support this opinion.
More than 83% of respondents support the reasonability of professional certification of construction supervision inspectors and other officials who perform functions of state architectural and construction control.
74.4% of respondents believe that the professional certification of the state construction supervision inspectors and other officials who perform functions of state architectural and construction control will improve the quality of administrative services in construction and strengthen the architectural and construction control. Almost 26% do not feel confident about such prospects.
78.5% of respondents support the opinion that the commissioning of completed facilities should be performed by a commission.
Almost 80% of respondents fully support the need for market surveillance of construction products. 19% believe that market surveillance is not needed.
It is also suggested that market surveillance is required for state-funded construction.
50% of respondents believe that the State Service on Food Safety and Consumers Protection should perform market surveillance of construction products. 25% propose to keep state architectural and construction control authorities responsible for this function. There is also an opinion that both authorities should perform the functions of market surveillance of construction products.
The survey participants also offer their options regarding a market surveillance authority, namely:
The respondents believe that the commission for the commissioning of completed facilities should include the following main persons:
Less than 50% of respondents support the inclusion of other persons from the proposed list in the commission.
Additionally, survey participants propose to expand the list of persons and consider the possibility to include the following person in the commission:
Some respondents also comment on the fact that representatives of government agencies should not be involved in the work of the commission responsible for the commissioning of completed facilities and contractors should not be involved to evaluate the results of their work.
Almost 84% of respondents fully support the introduction of a mechanism for pre-trial appeals of action or inaction of providers of administrative services and supervisory/control authorities in construction.
40% of respondents believe that the State Regulatory Service as a body implementing state policy on supervision (control), licensing and approval system in the field of economic activity should consider (out-of-court) complaints about action or inaction of administrative service providers and supervisory/control authorities in construction.
34% of respondents support granting such a right to the Ministry of Communities and Territories Development.
14% believe that this function should be performed by the Ministry of Digital Transformation of Ukraine, as a body implementing state policy in the field of administrative services.
The survey participants also offer their options regarding a body for out-of-court examination, namely:
It was also proposed to introduce personal liability of administrative service providers and supervisory/control authorities in construction and provide the bodies that authorized these entities to carry out the relevant activities with out-of-court examination functions.
Almost 60% of respondents believe that the body that reviews complaints about action or inaction of administrative service providers and supervisory/control authorities in construction should be authorized to eliminate violations. 30.2% believe that such powers should not be given to such a body.
The survey participants also suggest the following:
62% of respondents believe that administrative liability for illegal refusals to issue/register permits should be introduced. 35.5% believe that such actions should be criminalized.
53% of respondents believe that criminal liability should be introduced for officials for the issuance/registration of documents on the commissioning of improperly built facilities. 38% believe that administrative liability should be introduced for such actions. Almost 9% of respondents see no reason to introduce such a liability.
Note: The survey describes general trends, tendencies, and attitudes of market participants regarding the subject being analyzed. According to experts, this research can be used to form recommendations only in combination with other data on the research subject (statistical and analytical reports, analysis of best practices, expert opinions, etc.).
This material is prepared by the Better Regulation Delivery Office (BRDO), an independent expert and analytical center funded by the European Union under the FORBIZ project and within the framework of EU4Business Initiative.