Lukashenko Says Belarusian Building Sector Ruined
Prime-Tass
Belarus’ President Alexander Lukashenko believes the country’s construction industry has been ruined. The president made the statement during a meeting that addressed the performance of the building sector on Thursday.
Despite the good indicators posted in 2007 major problems still remain, especially price formation during all construction phases, complaints about the quality of design and reviews, insufficient financing and development of physical infrastructure.
The president noted a deficit of construction materials on the home market and problems with dwelling overhaul. “We have problems at all stages – rate of construction, quality and price,” Lukashenko said. “I expect specific solutions and business proposals in order to improve the construction sector,” Lukashenko said.
At the same meeting the Belarusian government requested President Alexander Lukashenko to provide preferences and privileges to construction companies, but the head of state turned the proposal down, the press service of Lukashenko reported.
Prime Minister Sergey Sidorsky suggested raising the profitability limit for construction organizations to 10%-15% from 5% currently to enable them to accumulate funds for reconstruction, upgrade and expansion of facilities. The 5% limit is imposed on construction of dwelling for those having the status of “people in need of improved housing conditions”.
Construction companies are in debts, hence inability to take out investment loans from banks. Some 80% of key assets are deteriorated. The building sector requires 5.1 trillion Belarusian rubles (Br) in investment.
The government suggested securing loans for construction companies and repaying interests from innovation funds and budgets. The Council of Ministers has initiated an extension of respites to repay the loans to five years from three, but the president disagreed referring to the accurate lending system that will not be changed for the worse. “There will be no mad money. I won’t let you destroy our banking system,” Lukashenko said, quoted by his press service.
The government suggested distributing financing functions between the republican and local budgets, and Lukashenko backed the idea, instructing the government to define the criteria to distribute the functions.
The meeting also addressed wages in the sector. Chairman of the National Bank of Belarus (NBB) Petr Prokopovich proposed lifting any limits on wages in the building sector. Cost sheets now include wages between 600,000 rubles and 650,000 rubles, but real wages amount to 1.3 million rubles [paid from profits]. The government recommends raising wages to the equivalent of U.S. $700.
“You may raise profitability limits to 10% and set any wage you wish, but we must find reserves to do without increasing dwelling prices,” Lukashenko said. “You could have done at the level of the government. The head of state has taken the required measures,” Lukashenko said, quoted by his press service.