Irek Fayzullin: ‘I appeal to developers — do not increase prices!’

“Otherwise, we'll just eat up all the money again”

The head of the Russian ministry of construction focused on the problems common to the country in his speech at the board of the relevant ministry of the republic. In particular, he admitted that without preferential mortgages and with high market rates, the purchasing power of Russians in the purchase of housing has significantly decreased. Therefore, according to him, new support tools are being prepared for the industry.

“I appeal to developers — do not increase prices! The support measures that we will be implementing are related to that we are asking for prices to be frozen. Today, together with manufacturers and the ministry of industry and trade, we are working on issues, including the voluntary freezing of the cost of construction resources. However, this should take into account that certain changes in tariff components will take effect starting July 1. But the cost should not change by more than this amount. Otherwise, we'll just eat up all the money again as a result of the increase," he warned.

According to him, the task ahead is serious, it must be under constant control. The minister of construction of Russia noted that the industry mostly has Russian construction resources. This is clearly seen in the new building of the Kamala Theatre, where they used materials of their own production, which were previously purchased abroad.

Another important issue is the reduction of the investment construction cycle to 1,000 days. Recalling that this task was also set by the president of the country, Fayzullin addressed the heads of the districts: “Colleagues, sometimes you set the barriers that we lower at your own level. Therefore, I believe these aspects also require mutual effort.

“A question was recently asked: which god did you pray to?”

Thanking the republic, Irek Fayzullin called the increased volume of the construction complex to 880 billion rubles in 2024 the result of teamwork. He warned the municipal authorities that new facilities must be submitted to the register of standard projects, otherwise they will not be allowed to be funded from the federal budget. He also highlighted the new programme for the modernisation of municipal infrastructure:

“Recently, I was asked a question: 'Which god did you, Irek Envarovich, pray to this year?' The holiday period across the country was marked by two times fewer accidents than in previous periods. This, of course, is due to preparation, as well as the weather in Central Russia, which helped avoid major accidents that usually occur.

As the analysis showed, accidents occur in the same places, where funds are not invested in the utilities sector, the minister stressed.

“As for utilities, we all don't want to give tariffs or anything. At the same time, we want everything to be fine, but that won't happen. Therefore, the modernisation of the municipal infrastructure is a very necessary project. Of course, our numbers there are not quite where they should be yet, but the very establishment of this programme by the federal leadership is important. This is a very serious problem for our whole country," said the rais of Tatarstan.

Rustam Minnikhanov recalled that, in addition to the federal programme, there will also be a republican one, under which 10 billion rubles will be allocated for the modernisation of networks.

Earlier in his report, the head of Tatenergo, Rauzil Khaziev, warned that the results of 2024 showed a deterioration in the state of the heat supply industry, and the wear and tear of heating networks is growing. For example, in Kazan it has already exceeded 65%. The cost of the matter for the capital of the Republic of Tatarstan alone is 46.7 billion rubles. The speaker sees a solution to the issue in co-financing a project to upgrade the municipal infrastructure from various sources, plus creating more attractive conditions for investors: “If 54% of utilities in the republic are unprofitable and tariffs change every year, no business will come there.”

Another suggestion concerned the organisation of purchases. However, the head of the Russian ministry of construction did not support it: “Today, when construction organisations are facing challenging conditions, I believe that unrestricted access to tenders is very dangerous, as it may attract unscrupulous organisations.” Firstly, you will have to trade without an advance. Therefore, the position of the ministry of construction of Russia is that in 2025 it is necessary to give the heads of regions the opportunity to choose a supplier. We have included this position in the anti-crisis measure.”

Housing records, staff shortages, and corporate debts

Tatarstan's construction complex is gaining momentum — its share in GRP is about 8%. Marat Aizatullin, the minister of construction, architecture and housing of the Republic of Tatarstan, cited the industry's results for 2024. The volume of construction work increased by 13%, to 880 billion rubles, and the volume of services in utilities services increased by 12.5%. The salary of construction workers has also increased, but they are still sorely lacking, the speaker noted. For the second year in a row, there has been a negative trend in the number of employees, with the current shortage amounting to more than 13,500 vacancies. The number of graduates of specialised universities is over 5,700 people that year, which does not cover the needs of the industry.

Work continues in the republic as part of the development of three urban agglomerations: Kazan agglomeration, where preparations are already underway for the approval of the master plan and some solutions are being applied; Kama agglomeration, which they want to approve in the first quarter of 2025; and Almetyevsk agglomeration, which will also be completed within a year. In addition, since last year, the authority of the districts in the field of urban planning policy has been transferred to the ministry. An exception has been made for Kazan and Naberezhnye Chelny so far.

Last year, Tatarstan once again exceeded its housing commissioning plan, having commissioned 3.452 million square metres, of which 70% were private housing construction. Starting from March this year, private housing construction will be developed using escrow accounts. Major projects have been completed and are being implemented within the framework of industrial construction: Sviyazhsk Multimodal Logistics Centre for 1.8 billion rubles and the third stage of Ozon warehouse for 465 million, the construction of the infrastructure of the Mendeleevsk 2.0 industrial park for 875 million, the creation of Tura 2.0 park for 1.2 billion. More than 15 billion rubles were allocated for the development of Alabuga SEZ, including the launch of the first stage of the Deng Xiaoping logocomplex, a container terminal. With its help, they hope to increase export cargo shipments from Russia to China, primarily products from residents of the Ethylene-600 park.

The volume of unfinished construction in the republic was reduced by 33%, to 62 billion 570 million rubles. At the same time, the number of facilities that have not been transferred to balance holders for more than 3 years has decreased by 54%, the minister said. Collection of payments for utilities services in the republic remains at a high level — 99.1%. Over the year, debts to utilities decreased by almost 40 million rubles, while the volume of outstanding obligations is still high — 327 million rubles.

The tax debt of debtor enterprises is also high, the minister admitted: although it has decreased by 2.6%, it still amounts to 2.9 billion rubles. In general, tax revenues from construction companies to the budget increased by 29%, to 43.6 billion rubles.

“Concession agreements have not become a tool for attracting investments”

“Concession agreements, unfortunately, have not become a tool for attracting investments in the republic. Over the entire period of 123 agreements in 18 municipalities, it is planned to attract 2.1 billion rubles, which is about 50-200 million per year," Marat Aizatullin complained. "2,089 communal facilities in 30 municipalities, mainly in rural areas, remain unserviceable.

Concession agreements are concluded to attract investments in the utility sector, but for this, the level of tariffs for services must ensure their payback, the head of the Ministry of Construction of the Republic of Tatarstan emphasised: “However, currently tariffs do not ensure the current break-even performance of 54% of utilities.”

The minister also touched upon the problem of the built sewage treatment plants. Inspections have shown that these facilities do not bring wastewater treatment up to standard levels.

Irek Fayzullin urged his colleagues to actively use the new pricing system in construction (FGIS CS), where they switched to new prices last year, although previously “we had bases in 1984”. According to him, the resource-index method makes it possible to obtain a more transparent and objective price of construction products.

According to the rais, the republic participates in all federal projects, it has no debts on them. All implemented programmes can significantly improve the quality of life of Tatarstan citizens:

“I sometimes criticise you builders, of course, I criticise you for a reason. But that's not what we're here for today. We have no other people besides you. Everything we do is done together. Rain, snow, bad weather — everything must be implemented. We remember how everyone was swearing here at this facility, in the theatre, but now everyone is happy, smiling, construction is not so easy. And the work of the builders is very difficult," he concluded, wishing the Tatarstan builders patience and success.