Aleksandra Damnjanović, the State Secretary: Construction sector as the main driving force behind GDP growth

In the second quarter of this year, the construction sector recorded an increase in the number of employees, which is 10 per cent higher relative to the same period last year.

The construction sector and infrastructure projects in Serbia have not been stopped. The Ministry of Construction, Transport and Infrastructure reacted in time, and all the recommendations that were valuable to the construction companies were posted on the Ministry’s website so the construction work can continue. Aleksandra Damnjanović, the State Secretary in the Ministry of Construction, Transport and Infrastructure, Government of the Republic of Serbia gave an interview for Diplomacy&Commerce’s special edition called ‘Real Estate Sector in Serbia’ in which she says: “The results achieved in this segment are of great importance so that, as a state, we can more easily overcome the economic crisis that affects the whole world. In the first quarter of 2020, the value of executed construction work increased by 24.4 per cent compared to the same quarter of 2020. The construction sector was the main driving force behind GDP growth, which in the same quarter, stood at 5 per cent relative to the same period in 2019,” says Ms Damnjanović.

Aleksandra Damnjanović, State Secretary at the Ministry of Construction, Transport and Infrastructure, Government of the Republic of Serbia

How did the coronavirus pandemic affect the construction sector and infrastructure in Serbia?

From the onset of the COVID-19 epidemic in Serbia and even before the introduction of the state of emergency, the Ministry had implemented measures aimed primarily at preventing the spread of the infection on construction sites and called on all construction companies and building material manufacturers to report their problems to us in this new situation. A large number of construction companies responded to our appeal, and the Ministry, based on the received suggestions and notifications while implementing all decisions devised by the Government and its Crisis Unit, issued and published recommendations on its website, which, according to construction companies, were quite valuable at the time.

In addition to safety measures, we actively participated in drafting government decrees, especially in the part of organizing transportation for employees during the state of emergency. The Ministry’s activities did not stop even after the state of emergency was lifted. The Deputy Prime Minister and Minister of Construction, Zorana Mihajlović organized special meetings with representatives of the construction industry, all with the goal of protecting the health of all employees and maintaining the work process on construction sites. We are pleased to say that the number of infected workers on construction sites is very low.

The largest infrastructural construction sites in Serbia never closed down and they are still fully operational, while the workers are adhering to all prescribed measures. At the moment, more than 6,000 people are working on the largest transport and communal infrastructure projects, as well as the construction of apartments for members of the security forces.

What is the situation with active construction sites at the moment in Serbia like, and how important is that for the future of Serbian construction?

Companies from Serbia, the EU, China, Azerbaijan, the USA, Russia and Turkey are engaged on our construction sites. At the beginning of the epidemic, especially during the state of emergency, there were certain problems with the delivery of equipment, but the works were not suspended for a moment. We believe that the overall delay in the implementation of projects, considering their complexity and value, will not be significant.

“The ultimate goal of all reforms is to establish a transparent system in which everyone will be able to exercise their right to build in a simple, fast and efficient way”

In late July, there were a total of 61,303 active construction sites in Serbia, which is 16,090 construction sites more than in the same period last year. This data best show that the construction industry in Serbia is coping well with the crisis, as evidenced by the quality of the business environment in our country, especially in the construction segment and the issuance of construction permits, which number is growing year-on-year.

What are the results so far when it comes to the construction of roads and railways in Serbia and what projects are planned?

In the past few years, 350 kilometres of motorways have been built in Serbia and over 550 kilometres of railway tracks have been overhauled. Corridor 10 was completed in 2019, so now we have an interminable motorway stretching from Belgrade to the border with North Macedonia and Bulgaria. The Belgrade-Čačak motorway segment, a part of the Miloš Veliki motorway, is also opened to traffic.

Currently, works are underway on the construction of more than 250 kilometres of new motorways and expressways, and despite the difficult working conditions due to the coronavirus, we will not have long delays in implementation of these infrastructure projects.

I would like to use this opportunity to mention the most important projects such as the Belgrade bypass, the Preljina-Požega motorway segment, the Sremska-Rača-Kuzmin motorway segment, the Moravian Corridor, etc.

Serbia is the location of the currently the biggest railway construction site in this part of Europe. We are building the Belgrade-Budapest fast rail that will have the biggest viaduct in this part of the world. Both passages of the Čortanovci tunnel, on Fruška Gora, have also been breached. Next year, when the Belgrade-Novi Sad railway track is finished, the commuting time between these two cities will be only 30 minutes.

The goal is to modernize the entire railway section on Corridor 10 after the completion of the road segment of Corridor 10. Next year, the plan is to start works on modernization, i.e. construction of a high-speed railway on the sections from Belgrade to Niš.

When it comes to residential and commercial space, does the construction of large condominiums contribute to the increase of the construction’s share in Serbia’s GDP? 

Condominium was introduced as a term in the latest amendments to the Law on Planning and Construction because, in practice, there was an increasing number of examples of this type of residential construction and layout. According to the overall number of issued building permits, we can conclude that the number of issued building permits for the construction of residential buildings is growing, and the trend of construction of residential and residential/business complexes is especially noticeable and that a significant number of condominiums is being built especially in bigger cities. The role of the legislator is to monitor and listen to the needs of citizens and businesses and react adequately by regulating everything that can cause a problem in the implementation of relevant laws. In addition to the construction of large infrastructure facilities, the construction of residential and residential/business complexes will certainly significantly participate in increasing the construction’s share in the country’s GDP.

“Serbia is the location of the currently the biggest railway construction site in this part of Europe. We are building the Belgrade-Budapest fast rail that will have the biggest viaduct in this part of the world”

What is the current situation with illegal buildings, five years after the enactment of the Law on Legalization of All Illegally Constructed Facilities?

I have to say that the Ministry is not satisfied with the number of legalized facilities and that the reasons for the relatively low number of issued legalization decisions lie in the fact that municipal and town administrations did not do their job properly although there were given extra manpower to do so. On the other hand, there is a noticeable lack of interest among a number of citizens to solve their problem with illegal constructions. It often happens that even after several requests from the line authorities to submit the necessary proof and documentation, they do not do that. The legalization conditions prescribed by law are such that everyone can legalize their house or apartment for a very low fee. The latest amendments to the Law on Legalization of Buildings ban the sale of these buildings, which was one of the measures to expedite the legalization process. It did yield certain results in practice.

However, in addition to working on legalization, municipalities and cities should also strictly adhere to the Law on Planning and Construction, act preventively, but also repressively and do not allow new illegal buildings to be built on their territory. I would like to remind you that illegal construction has been considered a criminal offence since 2002 and that the conditions for obtaining the necessary permits today are such that there is no reason for anyone to build without one. It is very important that all state and other bodies act together – from the legislator to the judiciary – because only in this way can we succeed in preventing new illegal construction, which undermines the foundations of the entire legal system.

The e-permit system has been in the making for a long time. What are its effects now that a couple of years have passed?

Following the implementation of the system for electronic issuance of building permits, Serbia now stands shoulder-to-shoulder with the most developed countries in this segment. Serbia ranked 9th on the latest Doing Business list compiled by the World Bank, which is a fantastic success, because, before the implementation of this system, Serbia ranked 186th out of 189 countries. The existing system is being improved every day, and the creation of the so-called e-space system is also planned which will incorporate elements of e-government in the procedures relating to planning documents.

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