SELF-REGULATION IN CONSTRUCTION SEKTOR FIRST RESULTS NEAR PERSPECTIVES Moscow, October 2009

SELF-REGULATION IN SELF-REGULATION IN CONSTRUCTION SEKTORCONSTRUCTION SEKTOR

FIRST RESULTS FIRST RESULTS NEAR PERSPECTIVESNEAR PERSPECTIVES

Moscow, October 2009.

CHANGES IN THE SYSTEM OF ACCESS TO CONSTRUCTION MARKET

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LICENSINGLICENSING

Engineering researchProjectingConstruction

Since 1 Jan. 2009

SELF-REGULATIONSELF-REGULATION

Engineering researchProjectingConstruction

Licenses were issued by public institutions , such as Federal Agency of Construction and housing and communal services (Gosstroy, Rosstroy) – Ministry of regional development

Certificates of access are issued by non-state self-regulatory organizations

Moscow, October 2009

SELF-REGULATION IN THE SECTOR OF CONSTRUCTION, PROJECTING, ENGINEERING RESEARCH

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Organisations unite to form a non-

commercial partnership

Work out the regulations and standards, obligatory

for their members Found the compensation fund

Apply for registration as a self-regulatory organisation

Issue the access certificates (instead of

a license)

Control the activity of their members (instead of

a licensing control)

Work out the regulations and

standards, obligatory for their members

Obtain the status of self-regulatory organisation


CHANGES IN THE REGULATION OF MARKETSince 1 January 2009

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GosstroyGosstroy RosstroyRosstroy MinregionMinregionNormative regulationLicensingLicensing control

Ministry of regional

developmentNormative regulation

Self-Regulatory Organization (SRO)

Issue of access certificatesControl of the members of SROStandards and regulations of SRO

Federal service of ecological,

technological and atomic supervision (ROSTECHNADZOR)

Registration of SROSupervision of SRO


SCHEME OF ORGANISATION OF SELF-REGULATION IN THE CONSTRUCTION SECTOR

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REGIONAL SROAccess to market and control of members activity

Forming of a system of liability for breakage

Training and certification of personnel

NATIONAL ASSOCIATION OF SRO

Creation of unified standards, requirements and regulations

Protection of rights and interests of regional construction SRO

Presentation of interests of construction community at legislature and executive authority of Russian Federation

Obligatory membership for regional SRO

REGULATORY AUTHORITY

Conduct of united SRO register

Approval of united standards, requirements and regulations

Control of SRO activity


REGIONAL SRO IN CONSTRUCTIONIN A FORM OF NON-COMMERCIAL PARTNERSHIP

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AUTHORITY: issue of acces certificates to works, which affect the safety of objects of capital construction

REQUIREMENTS: 1. Unites more than 100 members2. Compensation fund is no lees than 1000000 r. per member or 300000 if

SRO has the regulations of liability insurance3. Presence of accepted documents:

- requirements of issue of access certificates- regulations of control in self-regulation- document with a system of responsibility arrangements, including the types of punishment

4. Have the right to set up:-self-regulation standards-self-regulation regulations

5. Presence of completed compensation fund6. Presence of internet web-site7. Presence of member register

INFORMATION CONCERNING THE TRANSITION TO SELF-REGULATION

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On 21 October 2009

The following SRO of 83 subjects of Russian Federation have registered in Rostechnadzor:

49 – in construction field

33 – in the field of projection

4 – in the field of engineering research

Regional coverage - 69 subjects of Russian Federation (including branch offices and representative offices of SRO)


№ KEY SUCCESS FACTOR STRATEGY Key index of carrying out

1 Conservation and maintenance of SRO reputation

Statement of clear and understandable for members of SRO mission of organization, compliance with its goals and objectives

Positive response among media, business community and consumers

2 Sufficient financing Receiving of grants, participation in international sponsoring programs

Increase of financial funds receiving

3 Collective brand recognition Increase of costs for advertising campaigns and PR, informational and educational campaigns

Increase of significance and recognition of collective brand

4 Leadership qualities of SRO top-management

Getting the competent management involved in the work

Active lobbying of interests of business community and SRO members

5 Amount of SRO members Decrease of membership fee and increase of value, offered by SRO to its members

Quantative increase of amount of SRO members

KEY SUCCESS FACTORS FOR SRO

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Non-commercial partnership “Self-regulatory organization “INTERREGIONAL UNION OF BUILDERS” (NP “SRO “IUB”)

________________________________________________NP “SRO “IUB” is included in state register of self-regulatory organizations by decision of Rostechnadzor on 18 March 2009.

Interregional Union of Builders is the first-rate self-regulatory organisation of constructors in Russia. Aggregate income of IUB members exceeds 500 milliard r. Aggregate personnel quantity exceeds 150 000 persons.

At 21 October 2009 IUB has 284 members – construction companies from Russia, Europe, CIS, and 134 candidate companies.

Compensatory fund of IUB exceeds 85 million r.


Head management of NP “Self-regulatory organization “Interregional Union of Builders”

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President of IUBEfim Basin,

Chairman of the Committee of Russian Chamber of Commerce and Industry for

construction, housing and communal services. Councilor for housing construction under the

Chairman of Council of the Federation, member of Ministry of Regional development board,

chief director of LLC “Corporation Engtransstroy”.

On 16 July 2009 was elected as a Chairman of organizing committee of preparation for all-Russian

congress of construction SRO. The Congress will take place on 10 November 2009.


Construction turnover less than 100 million r. – small-scale enterprises

100 million r. – 1 milliard r. – medium-sized enterprises

1 milliard r. – 5 milliard r. – large-scale enterprises

Over 5 milliard r. – largest-scale enterprises.

Principle of specialization of contract construction organization as provided by NP SRO “IUB” statistics

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Average amount of construction access per 1 organization – 9 types of works and 117 types of production and service


United database of members of self-regulatory organizations in construction field

WWW.SRO-S.RUWWW.SRO-S.RU

Self-regulatory organizations registerSelf-regulatory organizations register

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MOS.SRO-S.RUMOS.SRO-S.RU Official web-site NP “SRO “IUB”Official web-site NP “SRO “IUB”

Materials provided by NP “SRO “IUB”Materials provided by NP “SRO “IUB”

8 bld.1, B.Sadovaya str., Moscow, 1230018 bld.1, B.Sadovaya str., Moscow, 123001

MOS.SRO-S.RUMOS.SRO-S.RU

Phone/FaxPhone/Fax::(49(4955) ) 650-650-17-1817-18(49(4955) ) 650-650-17-1917-19

[email protected]@sro-s.ru

NP “SELF-REGULATORY ORGANISATION “INTERREGIONAL UNION OF BUILDERS”

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Documents

SELF-REGULATION IN CONSTRUCTION SEKTOR FIRST RESULTS NEAR PERSPECTIVES Moscow, October 2009