5th MEETING OF THE MANAGING BOARD OF BELGRADE CHAMBER OF COMMERCE CONSTRUCTION INDUSTRY IN 2010 – RECOVERY OR STAGNATION

 

At the fifth meeting  of the Managing Board of the Belgrade Chamber of Commerce held on January 28, 2010 there was a discussion about prospects for economic recovery in 2010, with focus on the construction industry.

PhD Milan Janković, President of the Belgrade Chamber of Commerce considers that the construction industry in Serbia is in very difficult position: non-issuing of location and building permits, corruption and non-comprehension of numerous problems in the construction sector by the Government could lead this industry to a rather unenviable position, that is, there would be no inflow of foreign investments and 50 thousand workers could be left jobless. The situation is alarming as only 3-5 % of construction companies in Serbia does not have their accounts blocked.

As stated by Aleksandra Damnjanović- Petrović, Assistant Minister of Environment and Spatial Planning, the new Law on Planning and Construction and pertinent bylaws represent a good  framework for acquisition of location and building permits. In that respect, Regulation on measures of support to construction industry through subsidized residential construction loans and Regulation on conversion of the land use right into ownership right could improve the situation in the construction industry and subsequently in many other sectors. Non-issuing of construction permits is a big problem that will be solved only when spatial planning documentation becomes available for all municipalities and towns as it is the precondition for permit issuing. Since the issuing of location and building permits depends on land ownership, the owners of companies who acquired the land by buying the production facilities during privatization but did not continue manufacturing and now want to build there residential and commercial buildings, will have to pay the adequate compensation.

 

Numerous construction companies will have nothing to do because of non-issuing of permits,  predicts Dobroslav Bojović, Director of "Napred". Even if a company gets a location license in March 2010, the construction works cannot start before 2011. The price of conversion of land use right into land ownership right will be determined by the Ministry of Finance and Government. The cost of the land in Serbia is the highest in the region which is to prevent the investors from coming and investing in construction sector in Serbia.

 

Anđelko Kovačević, Vice President of the Serbian Chamber of Commerce remarked that the construction sector in Serbia in 2009 showed decrease of 30% in comparison to 2008, while the number of contracted jobs was 50% lower than in 2008. The construction industry is requesting changes of terms for contract awarding . The Government should pay to construction companies the amount owing so that the investment cycle can begin. It is also requested that the VAT should be paid after receipt of the payment and not after invoicing only, because collection of payment is a frequent problem.

 

Toplica Spasojević, Vice President of the Belgrade Chamber of Commerce said that although our construction industry had certain advantages, its capacities were diminishing year after year, so a new cycle of investment is a must. In that view, he suggested creation of a working group consisting of members from both Chambers of Commerce (Serbian and Belgrade) and successful business people, which would have a Government as a partner. He also advocated for establishment of a special fund to be used by construction companies, in order to enhance their competitiveness.