RACHIK PETROSYAN: INDUSTRY DIGITALIZATION SHOULD BE ACCOMPANIED BY CHANGING ADMINISTRATIVE APPROACHES AND DECISION-MAKING TECHNOLOGIES

Deputy Head of FAS reports on competition development in construction in the course of the parliamentary hearings at the Federation Council

On 3 June 2019, Deputy Head of FAS Rachik Petrosyan and Head of FAS Department for Control over Construction and Natural Resources, Oleg Korneev, took part in the parliamentary hearings on “Establishing favorable entrepreneurial climate in the construction industry”.

According to Deputy Head of FAS, shaping and transforming the business climate in the construction sector is impossible without addressing competition issues. Digitalization is a fundamental direction in the industry development.

The first stage of putting administrative procedures in construction to order is completed: the Government of the Russian Federation approved the exhaustive procedures lists while FAS control their compliance by the authorities and network companies.

At the same time, permits and other mandatory documents and approvals are received at the level of regions and municipalities, which results in mixed regulations and raises administrative barriers.

To address the issues, the Government supported the proposals of FAS and the Ministry of Construction of the Russian Federation from the Competition Development Road Map on adopting a single standard for providing regional and municipal services in construction in the electronic form and a transition to the unified state digital platform in construction, supporting interaction of all participants of urban-development relations along the entire process cycle.

“Under digitalization we understand changing administrative approaches and decision-making technologies rather than transferring the old work methods to the new conditions. To this end, we must integrate all electronic systems – the objective, on which our colleagues from the Ministry of Construction are already working. Without mutual agreement and integration between the existing systems and their coordination with the regional systems we will not achieve the final goal – transferring the system to the “one window” format. To launch “one window” so that public services or functions can be received in a couple of clicks, excluding interaction with all intermediary stages, all procedures must be unified and streamlined, transferred in a single system. To this purpose, a common state digital platform must be created”, said Rachik Petrosyan.

Deputy Head of FAS also pointed out that transition of interaction between the industry participants to the digital sphere cannot happen without unification of all standards and procedures in construction.

Implementing unified standards will form a single mechanism for interaction between developers and the authorities; the service process will not change depending on a region where a developer operates. The outcome of introducing the new standards will be a transition from the established heterogeneous practice of providing services in the construction sector in different regions of the Russian Federation to unified standards of such services.

“The transition of interaction between the industry players to the digital cannot happen without unifying all construction procedures and standards. Administrative procedures are not always the evil. Problems stem from their incompatibility and non-coordination. If the procedures are unified, put in an electronic system and applied in a common manner for public at large – then all of us will benefit greatly”, concluded Rachik Petrosyan.

In the speaker’s view, another controversial aspect in the industry remains automated collection and analysis of information about the costs of construction materials, particularly, with the Federal State Information System on Construction Pricing (FSIS CP).

Currently, manufacturers and importers of construction materials must submit information to FSIS CP regarding ex-works prices for construction materials, products, designs and equipment, specified in the buying-and-selling contracts between manufacturers and buyers. At the same time, economic entities practically do not fulfill this obligation (according to experts, the system is filled in only to around 11%), and reliability of the entered information is not ensured.

As a result, the Government lacks reliable data about prices for construction resources and their trends, as well as suppliers and manufacturers, which leads to an unreasonable growth of estimated prices for construction and construction materials, particularly, due to local anticompetitive actions by suppliers of construction materials, and threatens execution of the national projects.

Therefore, one of the tasks for improving the state policy on developing competition in construction is to pursue the measures on a transition to automated monitoring of the actual construction materials prices, particularly, providing for the right to conclude and execute electronic contracts for buying-and-selling construction materials directly within  FSIS CP, integrate FSIS CP with other specialized state information systems (including the data bases of the Federal Tax Service and the Federal Customs Service) to ensure common information space for the purposes of construction pricing, tax and customs control.

“Until we do not develop automated monitoring and do not see actual prices for construction materials, we cannot expect objective pricing regardless the method that are used. The key factor for executing the national projects is supplying construction materials to the construction of such scale and reliable forecasted pricing”, emphasized Deputy Head of FAS.

The speaker also discussed introduction of life cycle management of facilities with information modeling (BIM), which enables automated design of facilities using a construction resources classifier, costing standards, technical standards and и urban-planning standards.

BIM-mechanisms will help optimize budget and investment decision-making, automate labour-intensive processes, simplify project adjustments, and make decisions based on evaluating not only construction costs but also facility operating costs, which is certainly useful for budget financing of investment projects.