Compared to the other Baltic States, it is easier to construct private houses on your own in Latvia, observing the regulatory framework. However, the administrative burden of the construction process and the time-consuming of various coordination makes it difficult and unduly burdensome for both builders and supervisors.
In addition, the requirements of large and complex laws and regulations are not always related to the promotion of safe construction. It is concluded by the State Audit Office during the audit on the efficiency of the construction process.
Although the administrative process of construction in Latvia is not significantly different from the good practice recognized in the world, for several years, the World Bank’s Doing Business Report on Latvia has highlighted the construction coordination process as one of the weakest areas for the competitiveness index. The new Construction Law, which came into force in 2014, has not improved the situation. To coordinate a construction process in Latvia, 14 procedures must be carried out and that require 192 days. It is on average twice as long as in Lithuania (75 days) and Estonia (103 days).
In 2017 64% of the total number of building permits issued for the construction of new buildings was granted for the construction of private houses. Nearly two thousand families are faced with the challenges of building their own private home every year.
Construction boards do not fully perform their duties
The construction monitoring and control process should promote the operational safety of built houses. However, the audit found that construction authorities do not evaluate the results of the construction process tests, and therefore the potential risks are not identified. The building authorities do not ensure control over the term of validity of construction permits and the term of the civil liability insurance. This is a threat to safe construction.
In half of the audited construction board authorities, registration of the documentation submitted in the construction process is not ensured. This process of reconciliation of the construction idea and the process of commissioning the building makes it non-transparent and extends for almost 29 days.
The requirement to carry out a cadastral survey of a building upon its commissioning is not related to the construction supervision process or the safe operation of the building. Additionally, the execution of the requirement prolongs the commissioning of the building for an average of one month and, according to the auditors, annually generates additional expenses to households of up to 266 thousand euros.
Creation of CIS (CIS) – a step towards aligning the construction process
Construction Information System (CIS) was set up in Latvia from 2010 to 2015 for the European Regional Development Fund – 3.8 million Euros, but only about 2% of construction projects were submitted electronically by the end of 2017. At present, the information required for monitoring and control of the construction process available to the CIS is incomplete, it has a low level of reliability, and the construction board authorities themselves do not provide input of all information into the system.
Although the Cabinet of Ministers decided this year that from the year 2019, all the documents needed for the construction process will be electronically processed, the current situation will not radically change, as an exception remains for those construction processes that have already begun in paper form. As a result, full information on the construction processes in Latvia can be found in CIS no earlier than mid-2020. The State Construction Control Bureau also confirmed during the audit that the identified weaknesses in the functionality of the CIS will be eliminated by mid-2020.
The Ministry of Economics has to do a lot to improve the construction sector
The Ministry of Economics, which is responsible for the elaboration and implementation of a unified public policy in construction, during an agreement with the audit report, has decided to implement all recommendations of the State Audit Office. The Ministry will evaluate the usefulness of the mandatory checks specified in laws and regulations and will define binding rules for construction board authorities in order to establish a risk-based assessment system; assess the necessity and usefulness of cadastral survey when placing buildings into service; will improve the CIS by reducing the administrative burden for users, improving the transparency of the construction process and facilitating the monitoring and control of the construction process.
In turn, the construction board authorities and building initiators will be determined only the requirements that promote effective monitoring of the process and safe operation of built private houses as recommends the State Audit Office in their audit report.