Uzbekistan: New Approach To Construction In Uzbekistan

Last Updated: 14 December 2018
Article by Eldor Mannopov and Bobur Shamsiev

The Decree of the President of the Republic of Uzbekistan No. UP-5577 dated November 14, 2018 set out the main problems in the construction industry (absence of market mechanisms in technical regulation, immense number of governmental administrative and controlling functions, prescribing method of legislation in designing and constructing, absence of professional systems of education in construction norms and rules) along with directions for accelerated reforms and the development of a competitive environment in the construction sphere.

The Decree of the President approved the following measures:

  • Starting from December 1, 2018:

    • Examination of the cost calculation part of construction projects for all construction objects (apparently including those projects that previously were not subject to the requirements of a complex examination, for example, Product Sharing Agreements, projects funded by private enterprises and IFIs) is compulsory, except for the cases when a project is "funded with direct investments, including foreign direct investments." We kindly remind that investment is defined as tangible and intangible values and rights for them invested in a business and other activities not prohibited by law. This definition of investments embraces investment of monetary and other financial assets, including loans, shares and other securities. At the same time, there is no precise definition of direct investment under the law.
    • Acceptance of the finished objects for the operation will be performed with the participation of inspection for control in the sphere of construction, cadaster institutions, representatives of the building owner, contractor (general contractor), except when the project is financed by the subjects of public procurement. The meaning of this section is hard to define, because it is not clear whether the section is changing the composition of acceptance commissions or the stages of acceptance.
  • Starting from January 1, 2019:

    • Certificates and other permits issued by the members of the Organization for Economic Cooperation and Development (OECD) for designing and construction activities will be applicable in Uzbekistan. Currently, the OECD is comprised of 36 highly developed countries.
    • Development and improvement of the national construction laws and regulations and adaptation of the international normative-technical documents will be performed only through tenders. The Ministry of Construction will be the initiator of the works on the development and improvement of construction laws and regulations and all related activities. At the same time, construction laws and regulations will be subject to the registration with the Ministry of Justice, and the Uzstandart Agency will be responsible for keeping the catalogue of all laws on its website. 
  • Starting from March 1, 2019:

    • Association of Engineers-Consultants of the Republic of Uzbekistan will perform certification of the specialist in the sphere of design and construction for the activities that require such certification. However, the Center of Accreditation under the National Agency of Project Management will perform accreditations.
    • Performance of project activities will be permitted for legal entities which have at least two engineers with appropriate certificates working on a permanent basis in the organization and to those legal entities who are members of the Association of Engineers-Consultants of Uzbekistan. Construction, design and technical supervision will be mandatory at all stages of the construction, and only the author, building owner or certified specialists can perform these functions. Only certified specialists can provide  construction, design and technical supervision and construction inspection.
    • The Cabinet of Ministers of the Republic of Uzbekistan was instructed to prepare a plan for phased transition to the BIM (Building Information Modeling) technologies within one month; and together with the National Agency of Project Management and the Association of Engineers-Consultants to review the list of licensed activities in the construction sphere on their belonging to the certification, accreditation and licensing.
  • The National Agency of Project Management must review Classifier of the complexity categories of objects for design and construction until January 1, 2019; and by May 1, 2019, submit to the Administration of the President of the Republic of Uzbekistan a draft of the Town-Planning Code in a new edition.
  • Generally, the reformation of the legislative base of technical regulation in the construction sphere was divided into three stages:

    • 2019-2021Preparation period
    • 2022-2026Transition period
    • 2027-2028Finishing period. 
  • By the end of the Preparation period, within three years, it is planned that Uzbekistan will be included in the list of top-50 countries in the "Dealing with Construction Permits" ranking in the Doing Business Report of the World Bank Group. Currently, Uzbekistan is ranked 134th in this category.
  • "Execution of the License Agreement with the indication of specific, exhaustive list of requirements and conditions, as well as effective mechanisms of checking the candidates on their compliance with the licensing requirements and conditions" was abolished.
  • Energy saving technologies in design and construction of housing buildings will become mandatory from January 1, 2020. The only exception will be the objects certified in accordance with the BREEAM (Building Research Establishment Environmental Assessment Method) and LEED (Leadership in Energy and Environment Design) international standards.

We expect that many uncertainties will be clarified by the end of this year.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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