Gaidar Forum 2022: Priorities for the Development of the Construction Industry and the Housing and Utilities Services

13 January 2022
Gaidar Forum 2022: Priorities for the Development of the Construction Industry and the Housing and Utilities Services

How should the construction of housing correlate with road construction, the development of the housing and utilities sector and social infrastructure? Which segments in housing construction should be developed in the first place? What about the increase in tariffs? During the expert dialogue “Priorities for the Development of the Construction Industry and the Housing and Utilities Services”, Deputy Chairman of the Russian Government, Marat Khusnullin, told Ivan Fedotov, Director of the Association of Innovative Regions of Russia, about the development strategy of the construction industry, housing and utilities sector reform and infrastructure development.

Russia is developing a new strategy for the construction industry, which is expected to be integrated with the development of housing and utilities sector and other infrastructure, related industries, the construction of educational and healthcare facilities. One of the most important tasks of the strategy is to improve the quality of life, Marat Khusnullin said.

“We want to make the new strategy more comprehensive and more attuned to improving people’s quality of life. It also includes development in housing construction — we have very ambitious plans, and so far we are meeting them; last year we commissioned a record volume, over 90 million square meters. We want to link this with the transport infrastructure and mobility development programs,” he added.

According to Marat Khusnullin, the traditional approach, with the design of the construction development strategy being separate from the development plans of the housing and utilities and other sectors, is now a thing of the past. Moreover, a boost in housing construction should add momentum to regional development.

“The strategy covers links to all the development programs: how many schools should be built, how many clinics, how the building materials industry will develop. In general, how to make sure that construction in all regions becomes one of the main development drivers, promoting not only an improved quality of life, but also the tax base by creating jobs,” — said Deputy Prime Minister.

He said that one of the tasks will be the annual improvement of housing conditions for at least 5 million families in Russia through the sale and purchase of housing, repairs, mortgages.

“We have to build all segments of housing, from the cheapest to the most expensive. The supply must cover all levels of demand. And, of course, rent is the key factor here. If you come to work, why buy a house? You can simply rent a place to live. If you found another job — moved to another place, closer to work”, — Marat Khusnullin explained, noting that greater supply in the rental housing market will increase the mobility of the population.

Speaking of the housing and utilities sector, Deputy Prime Minister stressed that the modernization of the utilities sector will be carried out using both public and private funding sources. At the same time, changes in tariffs should take into account the real level of payments, which should be lowered by reducing the wear and tear of networks.

“A person cares more about how much they pay, rather than about the tariffs applicable. If we can reduce losses in the utility networks tomorrow, by adjusting tariff solutions and various investments, both from public and private sources, the consumers may have higher tariffs but actual payments will be the same. The main question is how much people will pay in the end,” Marat Khusnullin said.

Tariffs are also important in terms of attracting investment, he stressed, because it is hard to count on private investments without clear tariffs in the long run.

In addition, Marat Khusnullin pointed to the need to develop public transport and road networks between populated areas, including roadside infrastructure, which should reduce travel time for passengers and cargo. The federal center is already implementing these plans, investing a lot of money in development, he stressed.

The Gaidar Forum is held on January 13-14 at the Russian Presidential Academy of National Economy and Public Administration (RANEPA). The forum is organized by the Russian Presidential Academy of National Economy and Public Administration, the Gaidar Institute for Economic Policy, and the Association of Innovative Regions of Russia. The forum is supported by the Government of the Russian Federation.

Photo: Mikhail Dzhaparidze/TASS-photohost agency

A video of the session is available here.




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