NALED's Recommendations for Helping Construction Sector – State Should Settle Obligations, Extend Permits and Postpone Payment for Materials

The Association for Property and Urban Planning of the National Alliance for Economic Development (NALED) has prepared 20 recommendations for helping the construction sector overcome the negative effects of the coronavirus pandemic and sent them to the competent ministry.

As said, with a share of close to 6% in the GDP and last year's growth of 35%, the construction sector is one of the main driving engines of the economic growth, which is why it needs to be supported with special measures, and the proposed package features measures for the traffic sector as well, which is highly affected by the crisis.

Among the key propositions for the construction sector is the request for state and public companies to urgently settle their obligations toward construction companies for infrastructure projects. It is also necessary to extend the validity of building permits, because the construction companies cannot pay the contribution for land development, register the works or obtain exploitation permits due to the state of emergency.

– Since 2016 and the launching of the system of electronic issuing of building permits, which the NALED took part in, the number of issued permits jumped from 9,500 to nearly 22,000 a year, which is how much we had in 2019. This year started off great as well. In the first two months of 2020, there are already 2,700 issued permits, 29.1% more than in the same period last year. Last year was marked by the largest growth of the construction sector. It was a sector with the largest amount of direct foreign investments, after the manufacturing industry, and it's important not to stop the growth now. After we submitted the recommendations, we started working with the competent ministry on analyzing the proposed measures and implementing the best solutions – says Gojko Vrcelj, the president of the Association for Property and Urban Planning of the NALED and the director of the restructuring department at Erste Bank.

Due to the importance of public investments in infrastructure for the growth of construction, the Association proposes to support towns and municipalities in continuing infrastructure projects through interest-free loans.

Another useful form of supporting the companies would be to procure construction materials with delayed payments to the state, as well as a delayed payment of energy sources. When it comes to the administration, it is necessary to comply with the deadlines for obtaining connections to the power network, to extend the deadlines for the payment of contributions for the development of land, to better organize the operations of the services running the electronic system for the issuing of permits and to protect the workers on construction sites.

Financial relaxation is important for both sectors, entailing not just a postponement but an exemption from taxes and contributions on wages, as well as taxes and contributions during the state of emergency and securing a special kind of credits for working assets, to be issued in a summary procedure. They also propose for the deadlines for the filing of tax returns to be moved, especially for property tax, for the VAT debt to be frozen and for the payment of VAT per collected invoice to be enabled.

Transporters' losses to be compensated

In the transport sector, there's been a drop in the income higher than 50% compared to the average monthly income in 2019. That is why it's been proposed for the possibility of direct financial support to companies from this sector, which have had a 40% lower income compared to the same month last year to be considered. It's also important not to forget public companies which operate in the field of transport and station services. Furthermore, postponing payments to fuel suppliers would also help public transport companies. Finally, the NALED proposes the opening of additional lanes for trucks at border crossings, which has already been implemented in certain spots.

NALED Beograd

Erste Bank a.d. Novi Sad

National Alliance for Economic Development

Association for Property and Urban Planning

recommendations for helping construction sector

Gojko Vrcelj

coronavirus

infrastructure facilities

postponed payment

procurement of construction materials

interest free loans

validity of building permits

transport

transporters

transport sector