Current global challenges inevitably impact the construction industry, both in terms of procurement of construction materials and raw materials for its production, supply chains, and workforce engagement, which can threaten the growth and development of this sector in ucoming period. Therefore, the FIC Serbia White Book 2022 emphasized the necessity of further improvement of procedures and preventive action through legislative activity, stressing the necessity of providing impetus for further growth of this sector, which is essential for Serbia’s GDP.
This is precisely one of the reasons for the high interest of the FIC Serbia members to analyze and discuss the proposed amendments to the Law on Planning and Construction in a direct conversation with the Minister of Construction, Transport, and Infrastructure, Mr. Goran Vesić, and his closest associates to improve not only the legislative framework but the overall investment climate in the construction sector. On that occasion, the FIC Executive Director Mr. Aleksandar Ljubić pointed out that the FIC Serbia appreciates the efforts that the Ministry of Construction, Transport, and Infrastructure has been making for years to improve the legislative framework, stressing that the previous legislative solutions contained in the Law on Planning and Construction were good. Still, in practice, the maximum was extracted from them, and the Ministry of Construction, Transport, and Infrastructure has well recognized the moment to introduce changes to support and preserve the growth of the construction industry.
The FIC Serbia representatives emphasized that it is essential not only for investors but also for the citizens of Serbia to introduce elements of the green agenda through the latest amendments to the Law on Planning and Construction, which undoubtedly improves the quality of life for all of us. In this way, investments in green construction and further environmental protection will be encouraged, and order and control will also be introduced during the disposal and movement of construction waste. As a long-term reliable partner of the state, the FIC Serbia advocates for improving procedures and further digitizing the administration in the Republic of Serbia.
The President of the FIC Infrastructure and Real Estate Committee, Mr. Mario Kijanović, said that the FIC Serbia members support the strategic goals the proposed amendments should fulfill, adding that FIC Serbia members gave additional constructive proposals aiming to facilitate further implementation of the Law provisions in practice.
According to the FIC Serbia members, the proposed Law changes are certainly a step forward in that direction, through further improvement of the electronic system for issuing construction permits, but also the introduction of the e-space institute and the obligation for local governments to adopt planning documents for at least 70% of the construction area. This means that there is a clear strategy to round off the planning framework in Serbia efficiently, which would further shorten the time required to obtain a building permit and start construction.
Minister Vesić emphasized that the amendment to Law on Planning and Construction aims to move things forward, knowing that all problems can not be solved, but aiming to speed up the issuance of building permits to build more, simpler, and faster.
“The idea of the changes is to speed up the procedures in cases where they are unreasonably slow and to make them more transparent”, noted Vesić.
He explained that the proposed changes “solve” two problems, i.e., the Law on Conversion and the Law on Line Infrastructure will be repealed, due to which the European Union had the most significant objections to Serbia’s progress in the accession process, and he added:
“By abolishing the conversion payment, we will enable 15 million new square meters for construction. It is a huge and unused potential that we will “unleash” in this way. For 13 years of the Law, the state only earned 31 million euros from conversion because, in most cases, the process was carried out free of charge,” said Vesić.
Additionally, Minister Vesić pointed out that in the future, the holders of public authority will not be able to change the conditions during the construction permit issuance procedure. Investors will have to submit bank guarantees as insurance for possible damage to third parties and provide proof of the waste allocations to avoid creating landfills.
Energy passports, which already exist, will be mandatory for all buildings, so it will not be possible to sell an apartment if it does not have an energy passport. Minister Vesić added that investors with a green building certificate would pay a 10 percent lower fee for construction land.
Finally, it was concluded that with the reform of the institute of conversion of the right of use into the right of construction, further development of many locations that remained locked for construction for many years, is expected. These locations are often disreputable and neglected due to the impossibility of carrying out any serious construction works on them due to the high costs of converting the right of use into the right of ownership. With the proposed changes of the Law, a new cycle of investments in the construction sector is expected, which would return to the state many times over through increased employment, payment of real estate sales tax, property tax, and income tax of companies and their employees.
“We want to encourage the continuation of construction, to build more in Serbia and to protect both investors and citizens,” Minister Vesić concluded.