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Dealing with Construction Permits

Dealing with Construction Permits. Viktoriya Ereshchenko Analyst. Dealing with Construction Permits. Why does it matter? What does it measure – and what does it not? What are the main findings in DB19? Good practices and Azerbaijan. Why does Dealing with Construction Permits matter ?.

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Dealing with Construction Permits

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  1. Dealing with Construction Permits Viktoriya Ereshchenko Analyst Dealing with Construction Permits

  2. Why does it matter? What does it measure – and what does it not? What are the main findings in DB19? Good practices and Azerbaijan

  3. Why does Dealing with Construction Permits matter?

  4. Why does it matter? What does it measure – and what does it not? What are the main findings in DB19? Good practices and Azerbaijan

  5. What does Dealing with Construction Permits measure? Every interaction with an external party (i.e. municipality, inspectors, utilities) is considered a procedure; Starts with the first filing of the application or request and is completed when final document or service is received (construction permits, inspections and utility connections) Time is recorded in calendar days; Captures the median duration of each procedure Cost is recorded as a % of the warehouse value Assesses the quality of building regulation and its implementation

  6. What does Dealing with Construction Permits measure?

  7. What does the Building Quality Control index measure?

  8. What does the Building Quality Control index measure? Score Components 0-2 Clarity and accessibility of regulations - How easily accessible the building regulations are. - How clearly specified the requirements for obtaining a building permit are. Accessibility: 1 score if: regulations available online and updated 0.5 score if: regulations publicly available free of charge 0 score if: regulations must be purchased or not easily accessible Requirements: 1 score if: publicly available (regulations/website/brochure) - list of required documents to submit - fees to be paid - required pre-approvals of drawings/plans by relevant agencies 0 score if – any less than there three requirements

  9. What does the Building Quality Control index measure? Score Components 0-1 Quality control before construction - Whether a licensed architect or licensed engineer is part of the committee or team that reviews and approves (and can refuse) building permit applications. A score of 1 if: • National order of architects/engineers (or equivalent) must review building plans • Independent firm/expert (licensed architect/engineer) must review plans • Architect/engineer who prepared plans must submit an attestation to the permit issuing authority stating that the plans are in compliance with building regulations • Licensed architect/engineer is part of committee/team that approves plans at permit authority • A score of 0 if: • - No licensed architect/engineer is involved in review of plans

  10. What does the Building Quality Control index measure? Score Components Quality control during construction - Whether inspections are mandated by law during the construction process (risk-based, only technical inspections at different stages, or unscheduled inspections). - Whether inspections during construction are implemented in practice. 0-3 2 score if: • Govt agency legally mandated to conduct technical inspections at different construction stages OR • In-house supervising engineer/external supervising engineer is legally mandated to conducted technical inspections and submit detailed inspection report at completion • AND is legally mandated to conduct risk based inspections during construction • 1 score if: • Govt agency is legally mandated to conduct ONLY technical inspections at different stages OR in-house/external engineer or firm is legally mandated to conduct technical inspections at different stages and submit detailed technical report at completion • 0 score if: no unscheduled or no technical inspections are conducted • PLUS 1 score if: • Legally mandated inspections always occur IN PRACTICE (0 score if inspections happen most of the time but not always OR if do not happen at all OR not mandated by law)

  11. What does the Building Quality Control index measure? SCORE 0-3

  12. What does the Building Quality Control index measure? SCORE 0-2

  13. What does the Building Quality Control index measure? 0-2

  14. What does the Building Quality Control index measure? Professional certifications • The qualification requirements for a) the professional in charge of verifying the plans and b) the professional supervising construction on-site or conducting inspections 0-4

  15. What does the Building Quality Control index measure? 0-4

  16. Why does it matter? What does it measure – and what does it not? What are the main findings in DB19? Good practices and Azerbaijan

  17. Where is Dealing with Construction Permits the easiest? Top ten performers Score Source: Doing Business 2019.

  18. Dealing with Construction Permits was the fourth most reformed Doing Business area in 2019 Source: Doing Business database

  19. Reforms making it easier to obtain a construction permit show results over time in reduced delays 2018 2005 Time reduced by 24%, on average It was possible to complete the construction permit process in less than 150 days in only 58 economies*, in 2006. Now, the time to complete the construction process is less than 150days for entrepreneurs in 103 economies worldwide. Source: Doing Business database.

  20. It takes on average 157 days to complete the construction permitting process globally Fastest construction permit process: : 27.5 days (in Korea, Rep.) • Source: Doing Business 2019.

  21. Time and cost to obtain construction permits vary across and within the regions • Fastest construction permits process in each region (days): • Korea (27.5) • Georgia (63) • Sri Lanka (87) • UAE (51) • São Tomé and Príncipe (67) • Marshall Islands (38) • Mexico (82) • Lowest construction permit process cost in each region (% warehouse value): • Slovenia/Estonia/Czech Rep (0.2%) • Georgia (0.3%) • Sri Lanka (0.3%) • Mongolia (0.1%) • Iraq (0.3%) • Trinidad & Tobago (0.1%) • Seychelles (0.3%) Source: Doing Business 2019.

  22. OECDhigh-income economies have the highest ease of doing business score for Dealing with Construction Permits Source: Doing Business 2019.

  23. Dealing with construction permits is the fastest in East Asia and the Pacific Source: Doing Business 2019.

  24. European a Central Asian economies have the best quality control and safety mechanisms Source: Doing Business 2019.

  25. Dealing with Construction Permits is the least expensive in OECD high-income economies Source: Doing Business 2019.

  26. How did economies in Europe and Central Asia perform in the area of Dealing with Construction Permits in 2017/18? Source: Doing Business 2019.

  27. Dealing with Construction Permits in Europe and Central Asia (ECA)– Comparison of Azerbaijan within the region & global best practices • Best regulatory performances in Dealing with Construction Permits: • Procedures: 5 (none in 2017/18) • Time: 26 days (none in 2017/18) • Cost: 0.0% of warehouse value (none in 2017/18) • Building quality control index: 15 points out of 15 (3 economies) Source: Doing Business 2019.

  28. Which economies in Europe and Central Asia reformed in the area of Dealing with Construction Permits in 2017/18? (I) Source: Doing Business 2019.

  29. Which economies in Europe and Central Asia (ECA) reformed in the area of Dealing with Construction Permits in 2017/18? (II) Source: Doing Business 2019.

  30. Top improvers in 2017/18: Azerbaijan • In May 2017, Azerbaijan streamlined the building permitting process by introducing the single-window approach to obtain the construction permit. Investors are only required to use the single-window at the Baku City Executive Authority to obtain a construction permit. Source: Doing Business database

  31. Top improvers in 2017/18: China • During the first half of 2018, China introduced reform measures to streamline its construction permit process by implementing unified platforms for all building review processes carried out before the approval of a building permit in both Beijing and Shanghai. • The reforms also simplified documentation requirements, improved processing times, improved public access to information, introduced educational qualification and minimum experience requirements for professionals conducting drawing reviews and introduced a unified one-time application for inspections carried out after the completion of the construction. Source: Doing Business database

  32. Top improvers in 2017/18: India • During the second half of 2017, India continued to streamline its construction permit process by implementing the Single Window Clearance System (SWCS) in Delhi, and the Online Building Permit Approval System (OBPS) in Mumbai. With the implementation of these online platforms, all approvals from various agencies are now centralized. • Both cities also amended their liability and insurance regime regulations. The amended regulations also stipulate that construction professionals and construction companies should subscribe to a decennial liability insurance to cover for such liability. Source: Doing Business database

  33. Top improvers in 2017/18: Togo • On December 21, 2017, Togo passed an interministerial decree which stipulates that the constructor is held liable towards the owner for structural flaws or problems in the building once it is in use. The decree also stipulates that the architect and project owner are required to obtain an insurance policy to cover possible structural flaws. • Togo also strengthened the quality of the building permit application review process by increasing the professional qualification requirements of the professional reviewing the construction project. Source: Doing Business database

  34. Top improvers in 2017/18: Turkey • Turkey increased the transparency of its building regulations by publishing online all pre-application requirements needed to obtain a construction permit. • In addition, it strengthened construction quality control by imposing stricter qualification requirements for professionals in charge of approving architectural plans. Source: Doing Business database

  35. Who reformed in Dealing with Construction Permits in 2017/18? Source: Doing Business 2019.

  36. Who reformed in Dealing with Construction Permits in 2017/18? Source: Doing Business 2019.

  37. Why does it matter? What does it measure – and what does it not? What are the main findings in DB19? Good practices and Azerbaijan

  38. Dealing with Construction PermitsGood practices Global good practices • Risk-based systems allowing the treatment of buildings according to their risk-level and location • A coherent body of rules that defines what is required from builders and ensures a uniform implementation • Improvements on the organization of the review process - by better coordinating the efforts of different agencies

  39. Good Practices from around the world in Dealing with Construction Permits Setting rules and ensuring that they are clear and coherent New Zealand chose an effective approach: performance oriented building codes set technical standards and targets but do not regulate how to achieve them, allowing for innovation and flexibility in building techniques. Improving transparency and facilitating access to regulations The United Kingdom provides an online portal where all legislation as well as good practices can be easily accessed, in addition to guidelines on how to get approval for a building project. Ensuring building quality control and safety mechanisms are in place Azerbaijan adopted a new Urban Planning and Construction Code in 2012 which consolidates construction regulations into a single framework covering everything from the issuance of building permits to inspections of construction, qualification requirements for construction professionals and the issuance of occupancy permits.

  40. Good Practices from around the world in Dealing with Construction Permits Differentiating projects by risk Rwanda adopted a risk-based approval system in 2017, which provides specific guidance on inspections by type of buildings in relation to their anticipated risks and the complexity of the construction. This has simplified the process and streamlined the procedures needed to obtain construction permits for less complex buildings. Using one-stop shops to improve coordination and increase efficiency Singapore introduced CORENET (Construction and Real Estate Network) e-Submission System in 2013, which has streamlined the process for building professionals to request and obtain several approvals from different authorities.

  41. Dealing with Construction Permits in Azerbaijan and comparator economies – Ranking and Score

  42. Dealing with Construction Permits in Azerbaijan – Procedure, Time and Cost

  43. Dealing with Construction Permits in Azerbaijan and comparator economies – Building Quality Control Index

  44. Azerbaijan – DB 2019 – Procedures, time and cost (I)

  45. Azerbaijan – DB 2019 – Procedures, time and cost (II)

  46. Azerbaijan – Building Quality Control Index (I)

  47. Azerbaijan – Building Quality Control Index (II)

  48. Changes in Azerbaijan in DB 2019 • Major Positive Reform: Single window to obtain a construction permit Time reduced by 80 days; cost reduced by AZN 10,000 • Correction 1: Allotment of land for construction is not needed in our case Time reduced by 30 days; cost reduced by AZN 1,100 • Correction 2: Engineering – geological opinion from the Ministry of Emergencies is not needed anymore Time reduced by 4 days

  49. Reforms that were not accepted by DB Time decrease (from 15 to 10 days) for the provision of project documentation by the Baku City Executive. Decrease of the number of procedures needed for completing the construction process (from 21 to 8)

  50. THANK YOU!

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