Doing business is often associated with construction of new facilities (including cafes, restaurants, beauty salons, pharmacies, hotels); facade renovation or reconstruction of existing buildings, including the transfer of residential premises to non-residential category. According to the national legislation, special permits should be obtained from authorized government bodies to undertake such work.
In 2015, the process of obtaining construction permits took 176 days and included 23 stages.The introduction of 'single window’ service centers throughout the country and implementation of the new legislation have significantly simplified the process of obtaining permits for entrepreneurs at all stages of construction. Experts of the 'Business Forum of Uzbekistan (Phase III)' project are explaining how the procedures of getting construction permits were revised.
First, we need to identify several stages of the process. To commence the construction of a new object (building), an entrepreneur should obtain a land plot.
Obtaining a land plot for construction
According to the Resolution of the Cabinet of Ministers No. 285 dated October 7, 2015, entities and individuals can be granted the right for permanent use of a land plot of up to 1.0 hectares in towns on a competitive basis. Upon approval of the decision on granting a land plot for permanent use based on the results of the competitive bidding, an entrepreneur should pass only seven procedures to obtain land allotment documents and construction permits. However, there are some cases when the practice does not comply with the legislation. This is due to the fact that the procedure has been introduced recently and the mechanism is being tested and improved in practice.
Twice a year, the regional branches of 'Kuchmas mulk savdo xizmati' LLC announce competitive bidding in media outlets and official websites of the 'Kuchmas mulk savdo xizmati' LLC (www.1kms.uz), the State Committee of the Republic of Uzbekistan for Architecture and Construction (www.davarx.uz), CCI (www.chamber.uz), the Council of Ministers of the Republic of Karakalpakstan (www.sovminrk.gov.uz), khokimiyats of the regions and Tashkent City (www.tashkent.uz), as well as the Single Portal of Interactive Public Services (www.my.gov.uz).
An applicant submits documents to participate in the bidding in two originals, which include a project proposal, project sketches (facades and the general plan of the building), proposed range of the products or types of services, and information on project financing. The day the application is registered by the organizers, the applicant receives tender documents.
At the time defined in the announcement, the tender committee opens the envelopes with the proposals submitted by bidders and determines the winner based on the evaluation criteria. The protocol on the competitive bidding results should be published within three days.
The applicant who submits the most advantageous proposal according to the following criteria: proposed number of new jobs (25 points), amount of investment commitments (25 points), availability of approved personal financing or credit (25 points), conformity with technical requirements including the availability of project sketches (10 points), planned assortment of products and proposed range of products or types of services (10 points), proposed value of the bid(5 points), availability of a business plan on project implementation (2 points), availability of an applicant’s company audit report for the last year (1 points), indicators of the financial statements for the last two years (1 point).
Once the khokimiyat of the district (region) receives the protocol of the bidding, it approves the land allotment decision and signs a contract with the winning company.
The State Enterprise of Land Resources and Cadastre of the district (city), provides a certificate of state registration of rights to land plot within two days after khokim’s land allotment decision free of charge.
The new regulation has significantly reduced the time and number of procedures to obtain a land plot for entrepreneurs. Prior to the introduction of this process, the whole procedure took 55 days, but now the period from the selection of the best project to obtaining a certificate of the state registration of rights to land plot will not exceed 10 working days.
Procedures for obtaining construction permits have been simplified as well and now contain the following steps.
After registering their permanent use rights for the land plots, entrepreneurs hire a construction project design organization for preparation of project design documents. The project designer develops the construction project and submits it to: 1. The Architecture and City Planning Council and 2. A State expert organization for approval.
Having received the project and estimates, the entrepreneur applies to any “single window” centre, operating in the country to obtain a permit for construction.
• The "single window" centre within one working day sends the application for permit to the territorial inspectorate of the State Committee for Architecture and Construction (hereinafter ‘GASN’).
• In the case of a positive decision, GASN provides to the “single window” centre the permit for construction works, enclosing one original of the contract sighed by the inspectorate for construction supervision; then GASN publishes the information on the permit granted on the website of the State Committee for Architecture and Construction.
At the “single window” centre, the entrepreneur receives the permits for construction and an agreement regarding the provision of oversight services by GASN.
Commissioning of the completed building
A contractor (or the entrepreneur) undertakes construction works, hires "UzGAShKLITI" to prepare digital executive surveys of buildings and engineering communications. The contractor applies to the district (city) hokim for commissioning of the completed building. After the members of the commission have signed the certificate of acceptance, the hokim (mayor) approves it. As the final step, the entrepreneur registers the new construction with the cadaster.
According to the preliminary projections, the procedures for obtaining a land plot and permits for construction consists of 12 stages and takes about 54 days. Uzbekistan ranked 151th among 189 economies on ease of dealing with construction permits. The adoption of the new legislation and the strict adherence to it in practice will lead to the simplification of the procedures, improvement of Uzbekistan’s ranking and boosting business activities in the field of construction.