Real Estate and Construction

‘Revolutionary Reforms’ in Construction Sector

2012 was the first full year of operation of the new permit system in construction sector. The State Architectural and Construction Inspectorate of Ukraine, the supervision agency for the construction industry, marked out important achievements: “the clear and well-defined methods of classification of construction projects due to their complexity, the new approaches to the licensing procedures in construction sector where the complexity of the licensing procedures depends on the complexity of the construction project, and possibilities of the electronic documentation are implemented”.      

The requirements for commencing the construction works were simplified. In 2012, about 44 percent of all new buildings were built after the notifications had been sent to the supervision agency (small individual buildings, separate standing garages etc.); about 54 percent of the new buildings were the construction objects of the lowest categories of complexity, from I to III, which need only the declaration to be registered by the supervision agency in order to start construction works. And only 2 percent of the new buildings (construction projects of IV or V category of complexity) required an extensive procedure of issuance a special construction work permit. Before the requirements were simplified, the construction work permits had been necessary for all instances of construction.   

The list of the licensed construction activities has been shortened significantly. There were 1,814 types of construction activity need licensing in 1993-1995. In 2008 this list was shortened to 568 types and in 2010 it became about 20 times less than at the beginning of the 1990’s (96 types). It is expected that implementation of a professional attestation system in construction in 2013 further shortens this list to 56 licensed types.

All this looks just perfect but why at the beginning of 2013 the World Bank’s Doing Business rating placed Ukraine at the bottom of the list of countries in ‘Dealing with Construction Permits’ category? Ukraine was ranked 183 out of 185 countries in the list, ahead of Albania and Eritrea only.