Domestic Economy

Need for Construction Quality Assurance Fund

Need for Construction Quality Assurance Fund
Need for Construction Quality Assurance Fund

The ministry of roads and urban development has proposed setting up a specialized fund to guarantee construction quality and safety of housing units years after the construction operation is finished.

“In many countries, construction quality assurance fund, which is different from liability insurance, is set up to ensure basic functionalities of a building for a certain period of time. For instance, such a fund can ensure the durability of ceilings against damp for a 5-10 year period,” Abbas Akhoundi, the minister of roads and urban development said in a meeting with members of Mass Builders Association on Saturday, as reported by IRNA.

  Construction Law to Be Revised

A special committee from the Iranian Construction Engineering Organization is to revise the national construction law, said Akhoundi on Thursday.

The revision of the law is aimed at clarifying the relationship between the owners, builders, and the regulatory and legislative bodies.

A serious challenge in the country’s construction sector is that the regulations, in many cases, are not consistent and comprehensive, experts say. Builders often need to refer to various references for different issues. Different interpretations of the regulations and law lead to further confusion.

Construction regulations in Iran mainly date back to two decades ago, and a substantial revision seems necessary regarding the rapid technological development in the sector.

The regulations recommended by the ministry’s Center for Housing Research on metal joists, for instance, are in direct contradiction with the ones introduced by the Iranian National Standard Organization. The current regulations are never enforced for demolition, change of use, and renovation, some experts believe.

In order to improve the country’s construction industry, the first necessary step to be taken by the government is to review, modify, and homogenize the regulations.

Some big cities have taken positive steps during the past few years and the municipalities supervise proper implementation of construction engineering laws. But in many other cities, new buildings are being constructed based on different laws.

Considering seismic hazards facing the country, it is vitally important that the regulations are up to date.

 CBI Resisting Loan Approval

The Central Bank of Iran has rejected a proposal by mass builders to be granted loans covering up to 75 percent of finished costs in each housing project so that they can transfer the ownership to the buyers.

The proposal has now the support of the ministry of roads and urban development.

“The minister is working on the case along with the CBI. Although in our meeting we tried to convince the CBI governor that the construction sector needs special support, the governor apparently had a priority, which was aging structures that he said should receive renovation facilities first,” Jamshid Barzegar, president of the Mass Builders Association, told FNA.

The central bank has so far avoided considering the association’s proposal, providing no explanation. In the meantime, the central bank has referred the association to consult with the banks that have already been empowered to grant renovation loans for aging buildings, according to Barzegar, who dismissed the effectiveness of such consultation.

“We acknowledge that the renovation of aging buildings is important; however, we also believe that those deprived of housing and excluded from government subsidies and banking loans should be given such help as proposed by the association,” Barzegar added.

On Saturday, in an interview with FNA, Mohammad Saeed Izadi, managing director of Urban Development and Revitalization Organization announced that the central bank had submitted a proposal to the Money and Credit Council to increase the ceiling for renovation loans. The proposal is part of the National Renovation Plan that was approved earlier by the national renovation committee chaired by President Hassan Rouhani.

“The implementation of our proposal will not trigger inflation or increase housing price but in turn, empowers housing market and drives supply and demand. Construction industry is the driver of economic growth and can help the economy boom, at a time when the country is grappling with recession,” Barzegar asserted.