OREANDA-NEWS. November 11, 2008. In Yekaterinburg, ROSNO’s Ural Directorate has held a roundtable discussion with government officials and businessmen on topic "From Licensing to Self-Regulation in the Construction Sector", reported the press-centre of ROSNO.

Among the participants of the roundtable discussion were A. V. Krupkin, Deputy Minister of Construction and Architecture of Yekaterinburg Region, V. N. Padchin, General Director of the Yekaterinburg Regional Builders Union, and top managers of large federal construction companies, such as RenovaStroyGroup — Akademicheskoye, Akadem-Grad, AMC Aston Group, and Mr. O.V. Zobnin, branch manager of BINbank.

The discussion focused on the issues related to abolition of the licensing system in the construction sector and establishment of self-regulating organizations. All developers and representatives of the banking community are sure that the present construction market is ready to develop in accordance with self-regulation principles. Mr. Vitaly Us, head of division in ROSNO’s Financial Risks Insurance Centre, noted that he had monitored situation in the market of Yekaterinburg Region and the Yekaterinburg proper for the last several years, including the field of implementation of construction and mortgage projects.

According to Mr. Us, the regional market shows good growth figures. "We observe active development of land plots and various constructions. Being one of the most mature construction markets, the local market of Yekaterinburg Region has all it takes to establish SROs." Mr. Konstantin Belyak, head of ROSNO’s Special Projects Department, in his turn, emphasized that the introduction of self-regulation is a "planned measure not depending on the world economic situation. It is needed to test serious market mechanisms of self-regulation. We have to join efforts and act in this direction".

He has drawn attention of the audience to the fact that Yekaterinburg Region has got all that it takes to develop the market in accordance with self-regulation principles, because this region observes the lowest decrease in construction volumes among the Russian regions.

The developers and insurers noted that, at present, the licensing as a form of control does not per se constitute any guarantee — neither for construction companies, nor for their customers — and provides no protection against risks. Along with the compensation fund, which forms "joint responsibility" of the construction industry participants, insurance is the only reliable instrument protecting the market against unreliable projects.

"Even before the construction process has commenced, the insurer has the right to notify the construction company about any defects in the quality of building materials and demand that steps be taken to ensure safety at the construction site and check qualification of the employees engaged in hazardous works. These preventive measures enable us to avoid further problems during the construction process and minimize unforeseen expenses or avoid those altogether", noted Konstantin Belyak.

His opinion is shared by Vitaly Us, who maintains that "by accepting certain risks for insurance, the insurer each such time conducts examination and makes a judgment. Therefore, the consumers of services rendered by such organizations are able to use the insurers’ decisions as an indicator of performance of particular construction companies. The construction industry and investment industry are much interrelated, as regards funding operations. By using, first, the state licensing procedure and supervision of compliance, second, the strictly determined SRO code of conduct, and third, an independent arbitrator (insurer), we can make a precise evaluation of the state of affairs in this industry".