Investment project for the re-equipment of the JSC "Vitebsk House-Building Combine" Prefabricated Panel Plant is inefficient - KGC

23 May, Vitebsk /Diana Kurilo - BELTA/. An investment project for the re-equipment of the large-panel housing construction plant, a branch of the republican unitary enterprise "Vitebsk House-Building Combine" (Vitebsk HBC), has proven to be inefficient. Specialists from the Vitebsk Regional Committee for State Control have reached this conclusion, as reported to BELTA by the region's control authority. The re-equipment of the large-panel plant has become a protracted construction. At the time of the inspection, eight out of ten commissioning complexes had been put into operation, three of which were commissioned with defects and deferred finishing works. A finished goods warehouse was not commissioned. The untimely commissioning of the facility leads to its increased cost. According to preliminary data, the estimated cost of re-equipping the large-panel plant (excluding the finished goods warehouse) at 2006 prices will increase by more than 20%. Meanwhile, the re-equipment of the operating large-panel plant was noted among the most important innovation development projects for the industry in 2007-2010. The project's objective was to double the enterprise's production capacity (starting from 2011) (from 120 thousand sq.m of total housing area per year to 240 thousand sq.m with three-shift operation) and improve the quality of manufactured products. These objectives, along with the main target indicators, have not been achieved, rendering the investment project inefficient, the State Control Committee stated. Furthermore, during the inspection of Vitebsk HBC, it was established that the enterprise received state support for the renewal of transport vehicles and construction machinery, as well as for the modernisation and re-equipment of the large-panel plant, whose primary function is the production of reinforced concrete products. In total, during 2007-2011, the enterprise received and utilised Br48.6 billion in state support funds. However, the enterprise has not implemented all the measures for which state support was directed and which were envisaged by the State Comprehensive Programme for the Development of the Material and Technical Base of the Construction Industry for 2006-2010.

The achievement of the targets, which were a condition for receiving state support, was ensured by the enterprise through their adjustment by the Ministry of Construction and Architecture downwards at the end of the reporting period. The targets for labor productivity growth rates in 2010 and 2011 were not met. The enterprise did not export construction services while being assigned targets for 2009-2011. Furthermore, the requirements of Directive No. 3 "Economy and Thrift are the Main Factors of State Economic Security" were not fulfilled. Exceeding the standard construction timelines and poor quality of construction work led to additional expenses for the enterprise. For instance, in 2011, out of 16 residential buildings commissioned, standard construction timelines were violated for 10 of them. In 2010, the enterprise received 229 appeals from citizens (co-investors in housing construction) regarding poor quality of work, and 219 appeals in 2011. The main complaints from citizens regarding the quality of work were related to leaks in apartments, balconies, and inter-panel joints, dampness and mold in premises, and poorly installed window units. Violations of budget legislation were identified during the inspection. The enterprise illegally obtained budget funds amounting to Br476.2 million by overstating the cost of incurred expenses in calculations. Violations of legislation requirements concerning accounting and reporting were also revealed. Vitebsk DSK is the main construction organization in Vitebsk and the region, responsible for the construction of residential buildings. In 2010, the enterprise commissioned 151.2 thousand sq.m. of housing, which constituted 73.9% of the target and 92.3% of the 2009 volumes. In 2011, the target was met by 48.7%, with a decrease in commissioned housing volumes by 29.3% compared to 2010 levels. As a result, the share of RUP "Vitebsk DSK" in the total area of residential buildings commissioned in the Vitebsk region decreased from 27.6% in 2009 to 21.8% in 2011. For the established violations, the enterprise and responsible officials will be brought to administrative responsibility. The inspection materials have also been forwarded to law enforcement agencies. -0-

BELTA