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The Roscongress Foundation – a socially oriented non-financial development institution and a major organizer of international conventions; exhibitions; and sporting, public, and cultural events.

The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, and helps foster social entrepreneurship and charitable initiatives.

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Transforming the Construction Industry to Increase the Investment Potential of Far Eastern Regions
5 September 2019
13:45—15:15
KEY CONCLUSIONS
The state is putting efforts into regulating construction industry

Today we are working with the expert community on writing the industry strategy until 2030. The task we have set for ourselves is <...> to hear out all the experts and get a document in which all the necessary subsections will be present. <...> To date, more than a thousand experts have participated in putting this document together. They have worked in 11 project teams across main areas of the strategy — Vladimir Yakushev, Minister of Construction, Housing, and Utilities of the Russian Federation.

Construction is a cornerstone industry of the Far Eastern economy

Primorye Territory is a very attractive area for investment. There are unprecedented benefits and preferences here: this is the free port, and ASEZs, and our gaming zone. Our investment programme for the development of Primorye Territory includes about 56 projects with a total investment of about RUB 1 trillion. For our part, we are reducing all kinds of bureaucratic barriers — Mikhail Petrov, Acting Vice Governor of Primorsky Territory.

We appreciate the great potential of this region [FEFD] of the Russian Federation. We are confident that this region will develop, especially as it has recently received a great deal of attention from the Russian Government — Hong Ha Pham, Minister of Construction of the Socialist Republic of Vietnam.

In the 2000s, many large-scale and investment-intensive projects were implemented in the Far East: the Chita–Khabarovsk highway, the construction of APEC facilities, and the construction of ESPO pipelines. These are megaprojects that are important and have a very positive impact on the regional economy — Bela Liauv, Special Correspondent, Vedomosti.

ISSUES
Lack of trained professionals

The biggest deficit of qualified engineering staff for construction organizations is happening right here [in the Far East, – Ed.]. Sure, it is a good idea to develop and expand the construction workforce, but without qualified local engineering personnel, it is pointless — Anton Glushkov, President, National Association of Builders (NOSTROY).

We have been quite involved in the Far East for the last few years, and today we have 1,700 people employed in our Far Eastern projects. Unfortunately, of all of them only less than 300 are local residents. The rest are the people we bring from the European part of Russia. Without a doubt, this increases our production costs significantly, and not all customers are ready to compensate for it. The situation with engineers and technicians is indeed very dire — Yevgeny Virtser, General Director, INSYSTEMS.

Underdeveloped infrastructure

We wonder why we can work in other countries, including the CIS, but it is so difficult for us to work in Russia. <...> In the Far East, there is no methodology for construction. You need to be able to develop infrastructure first. Without it, it is impossible to achieve success in construction — Yuhang Wang, Vice President, China CAMC Engineering Co., Ltd..

Rising costs of construction

Since 2012, the cost of construction has increased by about 40% on average across the country. <...> With the help of the deflating index, we compensated only about 24% for the increase in the cost of construction by 40%. 16% is a net withdrawal from the industry. We received dried estimates, the price of contracts where there was no profit, and, unfortunately, it showed quite a bit of losses there. As a result, the number of bankruptcies of medium-sized and large enterprises has doubled over the past four years — Vladimir Yakushev, Minister of Construction, Housing, and Utilities of the Russian Federation.

That calculation and then the recalculation of estimates against the leading regions reveals that prices for various works have went up 12% to 15%. In other words, during the past three or four years the numbers moved from the section of the construction company's profit to the state's income, perhaps indirectly — Anton Glushkov, President, National Association of Builders (NOSTROY).

SOLUTIONS
Digitalization and implementation of advanced technologies

One of the main directions we are working on today is information modelling in construction. <...> On 1 July 2019, Federal Law No. 151 came into force, which introduced the concepts of information modelling and of construction information classifier. All this is now present in the Urban Planning Code — Vladimir Yakushev, Minister of Construction, Housing, and Utilities of the Russian Federation.

Our company is very involved in BIM-projecting. We design all our libraries, facades and roofs in four different software environments. We are look into their joints. <...> We build all constructions in BIM-design environments, the client can see the cost of materials, construction, as well as this model in terms of future operation of the building — Sergey Kolesnikov, President of TechnoNIKOL Corporation.

Over the past three years, we have completely abandoned the old paper-based administrative approach to the examination procedure itself. Since 2017, we do not accept any paper at all, everything comes in electronic format only — Igor Manylov, Chief Executive Officer, Main Department of State Expertise (Glavgosexpertiza of Russia).

In terms of technological innovation, Japan is using new technologies to the full. <...> They help improve both productivity and quality — Akira Iwata, Partner, Representative in Russia and CIS, Nomura Research Institute Ltd..

Training professionals for the industry

Last year, we signed an agreement with the Far Eastern Federal District on the creation of the 3D Design Centre. We launched it, and our first students have graduated this year with official certificates. We are trying to hire them or help them get jobs with our customers. <...> Having resolved the personnel problem, the industry in the Far East will take a very big step forward — Yevgeny Virtser, General Director, INSYSTEMS.

We have developed a very large educational programme. It is noteworthy, that apart from the SKOLKOVO School of Management in Russia, our folks trained at the Polytechnic University of Milan Business School, the Management School in Germany, etc. That is, in two years we retrained 2.5 thousand people, and it turned out to be no easier than to create a digital platform — Gennadiy Sakharov, Director of Capital Investments, State Construction Supervision and State Expertise, ROSATOM State Atomic Energy Corporation.

The material was prepared by the Russian news agency TASS