TOP-5 violations in construction

The most widespread violations in the construction industry according to FAS data

To prevent violations, the Antimonopoly Service publishes information on the most frequent violations in antimonopoly law, advertising, tariff regulation and public procurement and public defence procurement.

From 2016 the antimonopoly bodies consider complaints from legal entities and individual entrepreneurs, that are subjects of urban development relations, about actions of construction regulators and network organizations.

The most widespread violations exposed by the antimonopoly bodies include:

• Breaching the deadline for issuing urban development plan for land plots

• Breaching the deadline for issuing permission for construction or making changed in construction permits

• Refusals to connect (technological connection) to utilities networks – electric power, gas, heat, water supply and drainage for capital construction facilities

• Breaching the deadlines for connection (technological connection) to utilities networks – electric power, gas, heat, water supply and drainage for capital construction facilities

• Unlawful requirements to the claimants and the set of documents.

Complains of commercial entities about actions by the authorities and network companies are considered under the procedure specified in Article 18.1 of the Federal Law “For Protection of Competition”. Today business community has the right to appeal the procedures included in the exhaustive lists approved by the Government of Russia in:

- Housing construction

- Construction of water supply and drainage facilities

- Construction of electric power network facilities with the voltage level below 35 kW

- Construction of non-residential capital construction facilities

- Construction of heating networks.

In particular, the complaints may concern:

• Breaching the procedure deadlines

• Requiring procedures non included in the exhaustive lists

• Unlawful refusal to accept documents

• Setting requirements non  provided for by the regulations.

“Although the period for considering such complaints and making decision on them cannot exceed 7 working days with a possibility of single extension of that period for maximum 7 days, the mechanism of administrative appeal in construction still is not in full operation”, pointed out Deputy Head of FAS Rachik Petrosyan. “Today businessmen can request fast-track consideration of complaints about actions of network organizations by FAS if they concern unlawful refusals to accept documents, setting non-statutory requirements to the person that filed a complaint and the persons’ documents. At the same time, if similar unlawful actions are committed by the authorities, FAS cannot consider a complaint under the fast-track procedure”.

FAS has drafted amendments to the Federal Law “For Protection of Competition”, allowing the Antimonopoly Service to consider complaints about unlawful refusals to accept documents, unlawful requirements by the authorities to a claimant and the set of documents, made decisions on them and issue injunctions to eliminate violations under the “fast track procedures”.

To reduce administrative barriers on the construction market and creating a favourable investment climate in Russia, FAS recommends the authorized bodies and organizations operating utilities networks, tighten control over observing the time line and other requirements of the urban development law exercising the procedures from the exhaustive lists.

Russia is pursuing a control-and-supervision reform designed, in particular, to reduce administrative burden upon business and decrease the number of inspections. The reform is supervised by Minister Mikhail Abyzov. FAS is actively involved in the project. The Antimonopoly Service points out that unlawful actions by the authorities on construction and network organizations can infringe the industry and discredit the reform goals.