Scheme Can Reduce Shoddy Construction
Economy, Business And Markets

Scheme Can Reduce Shoddy Construction

The ‘construction quality assurance’ scheme proposed recently by the government was a dire need of the domestic construction industry, a housing experts says,  but adds that he is not very sure about its implementation.
To curb the construction of substandard buildings, the Ministry of Roads and Urban Development sent a proposal to the government this month requiring builders to assure the functionality of their buildings for the first ten years.
The plan would make a ‘quality assurance’ certificate, issued by an insurance company, mandatory for any home deals and requires builders to compensate for flaws or safety hazards.
“Insurance and construction guarantee is common in most countries to help ensure the safety of the structures,” Beytollah Sattarian, a Tehran University economist was quoted as saying by eghtesadnews.
“To improve the quality of buildings, insurance companies should be involved in their construction. Therefore, it is essential that the 10-year insurance plan be implemented. In fact, regular oversight by insurance companies will enhance the quality of buildings because, among other things, a competitive atmosphere will be created among the builders to produce quality work,” he said.

   Reality Check
On the drawbacks of the scheme he said, “Implementation of the plan may well increase the prices for newly-built houses, although no significant rise in building costs is expected.”  
“Insurance and guarantees do not necessarily add to the construction costs,” he claimed, but did not explain how the insurance policy and other guarantees that would be paid for by the builder/seller would not add to the final price.
He emphasized the benign effects of the plan on the life and endurance of buildings, saying that one of the important virtues of the proposal is that the role and influence of unprofessional individuals will be eliminated from the huge construction sector and they will be replaced by honest and qualified people.
He emphasized that “although construction quality assurance is basically meant to strengthen the safety of buildings, insurance companies are the ones who would benefit the most from the plan. And in spite of its overwhelming advantages, the plan is not very likely to be implemented.”
In recent years, the[AS1] nouveau riche have entered the saturated construction industry that became more lucrative in the wake of the housing bubble. Municipalities rely largely on fees from construction permits for their income and this too has resulted in an increase in the number of shoddy and substandard construction.

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