Deputies Raise Alarm Over Chaos in Construction Licensing and Oversight

Lawmakers from the AMANAT faction in the Mazhilis say systemic failures in construction oversight are allowing projects to go ahead in violation of master plans, while companies with no equipment or qualified staff continue to receive licenses and win public contracts worth billions, Orda.kz reports.

The deputies outlined their concerns in a request addressed to the prime minister. One of the main problems, they said, is that the same local government system both commissions construction projects and approves them. According to the request, an akimat subdivision acts as the customer, its own architecture departments issue architectural planning assignments and technical specifications, and it also makes development decisions. Oversight is then carried out by another subdivision within the same system.

Effectively, the same body permits, coordinates and controls construction, and cannot objectively respond to the unlawful decisions of its own colleagues and supervisors. The result is that architectural planning assignments and technical specifications are issued in violation of master plans and detailed planning documents, projects that should never have appeared are built, and violations are not stopped at an early stage. Then, after a change of akim, ‘illegal’ facilities suddenly emerge, demolitions begin and court rulings follow. At the same time, businesses suffer losses. the request says. 

The deputies noted that in other sectors, oversight is carried out by territorial subdivisions of central government bodies.

A second problem concerns licensing.

The Financial Monitoring Agency of Kazakhstan has established that more than 400 companies received licenses despite having no equipment and no qualified specialists. In other words, they have no base, no staff and no resources, but they do have a license. At the same time, tens of thousands of licenses were revoked in the South Kazakhstan region in 2009–2013 for the same reasons — fictitious companies with no resources. More than 10 years have passed, reforms and digitalization have been introduced, and the situation is repeating itself. In some cases, it has become even worse. the request says. 

The deputies also raised concerns about public procurement rules. They pointed to paragraph 72, under which a construction license is enough to participate in a tender, even though such a license is supposed to imply that a company has the necessary resources and capacity. In practice, however, the rules do not require verification of whether the company actually has equipment, facilities or qualified specialists.

As a result, any company with a construction license formally meets the requirements, even if it lacks the resources to build a project. Today, public procurement contracts — often several at once — are awarded to companies with no real capacity. The work is then subcontracted, creating a gray zone for tax evasion. Quality suffers, and the budget bears the risks. the deputies said. 

They proposed transferring the construction oversight system to the direct authority of a central government body to ensure the independence of inspections, checking whether licensed companies actually have equipment, specialists and a production base, and scrapping or revising the procurement rule that allows firms without real capacity to take part in tenders. According to the deputies, a license alone is not enough.

Original author: Oksana Matviyenko

Read also:

• In Almaty, Over 400 Companies Received Fictitious Licenses for Construction Work
• Kazakhstan May Proceed with Independent Construction of Three CHP Plants
• Noise, Construction and Cameras: What Astana Residents Are Saying About the LRT Tests