BUSINESS
Stronger standards, smaller bureaucracy
27 February, 2014
Construction standards and supervision are expected to get stronger according to a new draft construction code. Developers approve th56e heightened standards, but ask for less red tape. The draft of the much expected construction code for Georgia is completed at last, and construction standards long neglected should get stronger. The project has been under public discussion since the end of January, and is expected to enter Parliament during the spring session.
Two key changes are already clear: higher construction standards
that imply checking reliability of an entire construction - not just its façade, as law requires today; and state supervision fully responsible for comprehensive inspection of construction as well as for the building’s usage suitability.
The laxity of current law raises concerns that newly built constructions are risky. Georgian construction companies and producers of construction materials are free to observe whatever standards they choose, but the building must pass a final inspection.
And since the law specifically imposes no such obligation, they have to hire private companies adept in the engineering, architecture or geological work necessary for the construction if they want the building to be approved by the state supervisory service. However, private experts - not the supervisory service - bear responsibility if there is an accident.
The liberal former government deemed the law to be adequate; but the new government calls for tighter standards.
Developers who complained that authorities ignored their opinions during the working process on the draft code now appear satisfied, as they were included in the public discussion of the draft. They believe the heightened standards are a correct move,but disagree with the increased state interference through the supervisory services.
According to Tornike Abuladze, Director General of Arci - one of the leading development companies - enhancing the supervisory service role will entail complicated red-tape that may only hamper business. He believes the more rigorous inspection function of the state requires more administrative resources - thus more budgetary expenses - while posing corruption risks.
“As soon as you enter into a relationship with the state officials, the risk of corruption pops up immediately,” Abuladze said, in an interview with Georgian Journal. He suggests that private expert companies should have remained involved, but certified in line with international standards. These expert companies should bear all legal responsibility for construction, while the supervisory service’s role would remain unchanged.
“Let me put out one example. We have just checked the simple geometry of new houses, and it required four people and four days. If it is put within the competence of the Supervisory Service it will require at least ten to twenty-fold more than that - this will be a waste of the state money,” he said. Abuladze does not rule out that corruption deals may emerge with private companies too, but since salaries in the private sector are higher, the temptation is less.
“Small bureaucracy is our achievement and let’s keep it. My Estonian partner, for example, started construction in Odessa and Tbilisi in July and September of 2013, respectively. In Odessa they are still held up by paperwork, while in Tbilisi have completed the construction. Now they plan to sell out the construction site in Odessa and invest all the money in Georgia,” Abuladze said, adding that high standards and small bureaucracy are a fine match.

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