Rebuilding the Construction Industry: The Russian View

Webinar details

Rebuilding the Construction Industry: The Russian View

13 Aug 2020
4.00 pm – 4.40 pm, GMT+8
Zoom
2 SIP CPD Pts

Synopsis

For centuries, construction has been a reliable source of economic growth. COVID-19, however, is forcing this conservative sector to adapt quickly to challenges such as safe distancing, affordability and housing provision. Deputy Minister Nikita Stasishin will assess the sector’s future and share how Russia is responding.

Webinar video

COVID-19 safety measures in construction raise costs, but are essential

As COVID-19 began to spread in Russia and around the world, the Russian construction industry took the threat of infection seriously and acted quickly. They implemented numerous safety measures for workers, namely: (i) two-metre safe distancing, both at worksites and on work transportation; (ii) Cleaning of work surfaces every two hours; (iii) Disinfection of work and common areas twice a day; (iv) Mandatory use of masks and gloves on site; (v) Immediate suspension of construction if any worker was found to have come into contact with an infected co-worker.

Deputy Minister Stasishin shared that all the precautionary safety measures taken are “the basics” and would surely be effective. But he added that these additional measures would also “raise expenditure levels for the construction industry as a whole”.

For instance, the industry is bearing the cost of the new precautions, including workspace disinfection, additional transport rental, purchase of masks and gloves, weekly sample COVID-19 testing of workers, additional medical personnel stationed on site, as well as meals for workers. With some cost increases being easier to manage than others, the Deputy Minister stated that the Russian government’s goal is to find a more cost-effective solution “for the long run”. He also noted the importance of developing an industry standard of safety measures to help the construction industry “eliminate unnecessary spending” and cut costs.

Even as construction costs rise, housing must remain affordable

As with the rest of the world, COVID-19 has had a major negative impact on the Russian economy. The government imposed strict restrictions on the movement of workers and construction materials across the country to curb infection spread, resulting in various project timeline delays.

Another major consequence of the pandemic has been a spike in unemployment as businesses struggle with the drop in economic activity. This has resulted in a decline in household incomes, which in turn caused demand for housing purchases to plummet.

The Russian government acted quickly to address this fall in housing demand by providing subsidies to families with children, and lowering mortgage rates to 6.5% for first-time home buyers. In Russia, “one of the most important aspects” for the construction industry and the wider economy is housing affordability, explained Deputy Minister Stasishin. By keeping housing affordable and hence demand for it healthy, developers are supported and the wider economy gets a boost, he said. Russia’s goal is to build 98 million square metres of housing in 2020. If this target is achieved, it would surpass the record 85 million square metres built in 2015.

We need policies that strengthen our resilience against disruptions

Deputy Minister Stasishin highlighted the importance of developing policies that enable the world to become more resilient and adaptable to disruptions, given the unprecedented disruption that the COVID-19 pandemic has caused. “We need to pay more attention to policies that will make the (construction) industry and the economy more stable and sustainable,” he added.

Using the example of technological development and adoption, Deputy Minister Stasishin noted that while this was previously considered as just a part of the ongoing evolution and digitalisation of the economy, it is now perceived as “a necessity”. Moving forward, adopting and making use of technological advances “can make the (construction) industry less susceptible to disruptions such as viruses, lockdowns and restrictions on travel”, he said.

An example of a technology that – if widely implemented – could lessen disruptions by future pandemics, is touch-free technology to minimise contact with common surfaces such as doors, noted Deputy Minister Stasishin. He also shared that some Russian construction firms are introducing technologies that allow them to digitally manage certain operations on construction sites, improving safety and productivity.

To reach a post-pandemic “new normal”, the world must stay connected to share knowledge and solutions

Within several months, COVID-19 has precipitated a series of unprecedented disruptions to peoples’ lives and to the global economy. Policymakers worldwide continue to grapple with how to respond.

Nevertheless, this pandemic has shown us that the global community and economy “needs to stay connected” as we are all facing the same problem, stressed Deputy Minister Stasishin. “Mutual help and coordinated actions” amongst countries “will help us resolve these issues and get back to normal as quickly as possible,” he said.

The Deputy Minister added that consulting various construction industry stakeholders has helped Russia better understand the economic impact of COVID-19, as well as how closely the industry’s activities are “intertwined with health, ecology and (the) environment”.

About the Speakers

SPEAKER
Nikita Stasishin
Deputy Minister
Ministry of Construction, Housing and Utilities
Russian Federation

Mr. Stasishin is responsible for the development and implementation of state policy and legal regulation in the field of housing policy, and the development of housing and housing cooperatives, the rental housing market, mortgage lending, shared-equity construction of multi-apartment buildings, and complex development of territories. He supervises the Department of Housing Policy of the Ministry of Construction, Housing and Utilities of the Russian Federation.

MODERATOR
Dinesh Naidu
Deputy Director
Centre for Liveable Cities

A Deputy Director at the Centre for Liveable Cities (CLC), Dinesh Naidu leads teams responsible for curating and delivering CLC’s World Cities Summit, lecture series, magazines and digital platforms. Prior to joining CLC, Dinesh was a researcher-writer and activist in the field of architecture and urban heritage. His past roles include Executive Secretary of the Singapore Heritage Society and Deputy Editor of Singapore Architect magazine. Dinesh has been published in several journals and books, served on various public committees, and been interviewed in media like the International Herald Tribune, Christian Science Monitor, Wallpaper, Business Times and Channel News Asia.

Resources

Slides by Deputy Minister Nikita Stasishin
Deputy Minister's Response to LIVE Questions [PDF, 474 KB]