Second breath for construction industry

On February 27^th, Deputy Prime Minister Kalinin said that a draft law on the state procurements in the housing construction would be prepared.

The state will retain control over subsidiary housing construction. Other individuals will be offered individual construction schemes. The state is ready to allocate additional financial resources to provide privileged loan rates, as well as to fund infrastructure development in order to increase construction volumes and ensure GDP growth.

In 2013, it is planned to build 6.5 million sq.m. of housing. 2.5 million sq. m. will be build to meet the needs of the poor. Management of the housing construction for the needy will be given to the Capital Construction Departments or organizations, where the government has over 50% of the shares. State procurement will imply that the population will not be owing shares in the construction. The state will monitor the whole construction process, including the price and construction deadlines.

Individual construction will play a major role in increasing the construction volume. To meet this task, the government will ensure that that individual developers have building plots with the necessary infrastructure provided – partially at the state cost. In 2013 BYR 2 trillion will be allocated from various state budgets for creating engineering and transport infrastructure in the areas for individual residential development.

When calculating the needed funding, the government largely relied on population’s own funds. BYR 10 trillion will be allocated for soft loans. In order to improve financing of the construction by individuals, the government proposed to lift the ban on foreign currency lending to citizens. The National Bank has agreed to the alternative – to provide the needy with additional BYR 1. 4 trillion at the rate between 12 and 16%. Concessional lending is likely to expand further because assessments of the increased use of peoples’ savings on housing construction were overstated.

The growth in construction will link some free financial resources of citizens, additional capacity of cement plants will be used to meet the needs in the domestic market if there were problems with exports, the low baseline (2012) in the construction value-added will significantly improve the situation with yet another coming failure to meet the GDP growth forecast for 2013.