10 October 2010
For the last several years Tajikistan in the framework of recommendations of the World Bank on the results of the Doing Business Report has gained significant achievements, including on the Dealing with Construction Permits Indicators. Tajikistan entered the top ten country-reformers by carrying out reforms in this sector. The results of the Doing Business Report of the World Bank for 2010 have provided evidence to this argument.  These successes were achieved due to the political will of the Head of the State, technical assistance of the donor organizations in the area of improving business environment – realized by international organizations in Tajikistan as well as initiative and active participation of the private sector. For instance, the Association of builders of Tajikistan has contacted the Secretariat of Consultative Council with the initiative to conduct analysis and resolution of the most pressing issues for the sector at present, including the conduct of the tenders, licensing, pricing, inspections of the construction businesses.    The issues related to the construction business in Tajikistan were considered one of the priority reform areas in the 6th session of the Consultative Council which was held in 23 July 2010 chaired by the President of the Republic of Tajikistan, and were approved as an item for the 7th session of the Consultative Council for consideration.  In accordance with decision of the 6th session of the Consultative Council, the Agency for Construction and Architecture of the Republic of Tajikistan with its order from  №67ф from 23 August 2010 has established a working group with the view to study the problems of the construction sector and preparation of concrete recommendations for their resolution. The working group consists of 24 persons representing relevant ministries , agencies, scientific and research institutes, the Secretariat of the Consultative Council, private sector and international organizations. The members of the working group were divided into 10 subgroups depending on the issues to be considered and interests of the members that studies issues in more details by involving specialists of the sector, experts, lawyers and representatives of the private sector. In its large meeting after covering the results of studies of each subgroup, the working group came to the conclusion that the existing problems hinder the development of the construction sector – which is the engine of the economy. The issues are mainly related with improvements of the existing legislation and implementation of the current laws. It was mentioned that it is necessary to change views and approach to solve the accumulated problems.  For example, until now in preparation and conduct of the tenders the emphasis is on saving resources and time in determination of total cost and timing of the future construction works, selection of the winner of the tender, projection of the future works, expertise of the project documents.      According to the normative documentation that regulates the process of preparation and implementation of the construction works, the closing date of the construction and compliance with identified technology is set as a mandatory term.  Non compliance to each of these two terms will surely have a negative effect on the final result and the quality of the constructed objects that are made for the public and have potential risks for the life and health of everyone.   There problems related with application of those norms and requirements which are not in line with the principles of modern market economy.  It is the pricing and permitting regulation system, preparation and conduct of the tenders, selection of the winner of the tender, inspections and pricing, accommodating inflation, terms of guarantee, bank guarantee, conduct of several tenders for the same construction object, the retirement to submit cost estimates with the resource method in cases where the cost estimate has already passed tender with lump sum method.  Many of the above mentioned problems raises due to the inconsistencies between various legal and normative acts. For example in accordance with the article 760 of the Civil Code of the Republic of Tajikistan changes in the project and cost estimates documents, that need additional expenses for the contractor will be done at the expense of the sponsor on the basis of agreed additional cost estimates by the two sides.   The contractor has the right to request for revision of the cost estimate if by the reasons beyond its control the cost of the construction is exceeding the cost estimate by more than ten percent. The contractor has a right to demand compensation of the reasonable expenses made in relation to identification and elimination of the shortcomings in the project and cost estimate documents. However in accordance with the article 76 of the Law of the Republic of Tajikistan on public procurement of goods, works and services from 3 March 2006 « after signing of the procurement contract it is forbidden to include other terms which may alter the content of the tender application which were base for selection of the contractor».  It is also forbidden to make changes in the cost estimate, which is part of the contract according to the article  721 of the Civil Code of the Republic of Tajikistan.Elimination of this kind of inconsistencies could solve many problems, including related to the additional financing а) the works that were not accounted in the project and cost estimate documents but identified in the course of the construction, b) works that exceed financial cost envisaged in the cost estimate (due to the reasons beyond the contractors control) that are more than 10% of the total cost of the project , c)problems related to the financial inspections and the repercussions.  The initiative for identification and resolution of the issues is of Association of … and its members. The Association also became the initiator of making corrections to the results of the Doing Business Indicators Report of the World Bank on Getting the Construction Permits indicator taking into account the reform implemented in the construction sector recently.For the first time in Tajikistan the forum of the builders of Tajikistan was held and an independent scientific-analytical and production-technical journal «Construction and Architecture» is issued with the initiative of the Association. The Association of builders of Tajikistan in partnership with relevant interested sides has conducted numerous meetings and informative events on the subject of ongoing reforms, on their significance and importance on attracting investments as well as on development of the sector.  The Association of builders of Tajikistan jointly with the Secretariat of the Consultative Council helped to establish an open dialogue between private sector and public institutions with the view to study the existing problems and agree to eliminate them for the achievement of mutually beneficial cooperation.  The main goals of the activity are creation of the investment climate for the normal and transparent development of the sector, creation of employment, and improvement of the living standards of the population of the country.

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