The share of the construction sector in the gross domestic product of the European Union is almost two to three times more than the GDP in Azerbaijan. If the value-added in the construction sector in the EU is at 9%, the figure in Azerbaijan varies between 3-7%.
This can be explained through the activities taken by the government in improving the state governance in the construction sector. A large range of measures envisaging amendments to some legislative acts that regulate one of the most vexed questions of construction industry - connecting the buildings to the utility networks. What changes are expected in this direction?
These complex measures are especially expensive for Azerbaijan because the problem of relations between owners and monopolists of engineering capacity is very acute.
According to the amendments to the laws on Electric Power, on Gas Supply and Water Supply and Sanitation, the housing buildings (apartments) can now be received by the State Commission only after they are fully connected to the electric (gas, water and sanitation respectively) lines and are fully equipped with meters. Only after fulfilling all these conditions, the builders can get permission to sell new homes.
The rules and fees for connection to power lines (gas, water and sanitation) have not yet been determined. They will be determined by relevant executive authority.
These changes will require the builders to carry out additional technical conditions for construction of communal infrastructure facilities, which are located in several tens of kilometers away from the building sites and have no relation to the area of construction company. Later, these facilities will be transferred to the communal and electric companies without compensation.
At this point the new owners of apartments incur additional costs for the installation of meters, but in reality, not all new buildings have been connected to public networks, which lead to unnecessary costs to the residents for creating all necessary conditions for life.
SUPERVISION ON CONSTRUCTION STRENGTHENS
Improving the regulatory and licensing functions in the construction sector is also one of the most urgent issues which were recommended to the government of Azerbaijan by the international organizations.
Licensing of construction companies is expected to be implemented in Azerbaijan this year. Presumably, the license will be issued for a period of five years and the cost of permission will vary 1,000 to 2,000 manat depending on the type of activity.
The main requirement for a license will be the availability of professional staff in companies with a certain level of education, practice and work experience and availability of material - technical basis for implementation of construction works.
The process of licensing of construction companies in Azerbaijan would remove from this sector the companies that do not have sufficient financial, technical and human capacities that will enhance the quality and safety of construction in the country.
To simplify the system for obtaining license for construction companies, the
International Finance Corporation (IFC) proposes to introduce "single window" system to issue certain permits.
The Ministry of Emergency Situations (MES) also confirms that enough non-qualitative housing buildings have been constructed in Baku. Due to this, gas supply to residential buildings is carried out if they meet fire, seismological and other rules, otherwise the accidents of various degrees are inevitable.
Considering the experience of other CIS countries and years of experience designing organizations of foreign countries, recently Azerbaijan has adopted a national standard Az.DTN 2.3-1 - "Construction in seismic areas."
Today, 75 percent of Azerbaijan's territory belongs to eight-point seismic zone, and 25 percent - nine-percent. In connection with the expansion of the construction of frame and stone buildings over recent years, the issue of increasing the seismic safety of residential buildings that exceed the 12-18 floors became urgent in Azerbaijan.
Under the new standard, which differs by more stringent requirements, the coefficient used to calculate the price of seismic loads was increase by 1.5 -2 times, which would increase the reliability of mobile facilities. If formerly permission was provided to the construction of frame residential buildings up to 12 floors (39 meters height), in accordance with the new regulations, it can be up to 16 floors (58 meters height).
The new norms also envisage the implementation of seismic-isolation activities, which over recent years are widely conducted in neighboring regions, as it reduces the force of the seismic effect by about 1-2 points.
CONSTRUCTION SECTOR IS PRIVATIZED
In order to strengthen controls to improve the quality of construction, on April 6 Azerbaijani President Ilham Aliyev signed a decree on privatization of state-owned joint stock companies in the construction industry.
Under the decree, enterprises and facilities functioning in the open joint-stock companies Azersutikinti and Azersenayetikinti have been announced for privatization.
The Azerbaijani State Property Committee has been instructed to organize the privatization of the state-owned shares of joint stock companies, enterprises and facilities.
The Cabinet of Ministers has been instructed to resolve issues arising from the decree.