Nelli Galimkhanova about barriers on the aggregates market and the ways to overcome them
She highlighted the following barriers: capital costs, lack of investments that are irreparable, long periods of obtaining licenses, high transportation costs. The market is also characterized by numerous structural barriers. Another issue is unauthorized extraction. There are large consolidated groups that have an advantage in comparison with independent producers.
On 19 September 2017, at the 33rd session of the Head quarters for Joint Investigations of the Antimonopoly Law of the CIS Member-States, Head of FAS department for Industry Control, Nelli Galimkhanova, made a report “On the state of competition on the markets of aggregates production in the CIS member-states”.
She analyzed legal regulation of aggregates production in the CIS member-states and gave comparisons between competition levels across those countries. The survey looked into product boundaries of the markets of rubble of earth materials and sediments, sand and sand-and-gravel mix.
First of all, there should be changes at the legislative level, particularly, competitive methods of granting the rights for subsoil use must be formalized. Also there is a need for free pricing and transparent selection of subsoil users. Information about subsoil use should be given free-of-charge.
Regarding structural changes, Nelli Galimkhanova proposed to draft a common policy on product quality, develop small and medium business on the aggregates market. International cooperation is necessary to harmonize national and inter-state standards.
She outlined the prospects for developing the aggregates market, on e of which is introducing digital technologies in the industry.
“Digital technologies create new conditions for businesses, based on economic entities developing their own ecosystems (platforms), uniting all counteragents. Creating such ecosystems by producers will facilitate efficient planning of their economic activity”, stated Nelli Galimkhanova.
One of the examples of using digital technologies in the industry is a “Digital Land” pilot project of the Russian Federation, carried out by “Roscosmos” State Corporation.
The project focuses of developing geo-information services that help solve priority tasks in natural resources management, including control over subsoil use.
Following Nelli Galimkhanova’s presentation, it was decided to refine the wording and submit the general report for consideration by the CIS Executive Committee.