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Mario Kijanović, President Of The FIC Infrastructure And Real Estate Committee (Bojovic Draskovic Popovic & Partners)

Improving Procedures Is The Foundation For Further Sector Growth

A new cycle of investments in construction projects for residential and business properties, warehousing and other commercial buildings could be initiated through the further reform of the institute of conversion

A major stride for the construction industry was taken in 2014, with the amending of the Law on Planning and Construction, when a unified procedure was introduced and the process of implementing the instituting of converting the right of use of construction land into ownership rights was continued, and subsequently completed in 2015 with the adoption of a new law [Law on Conversion]. The effects of this legislative activity have been visible throughout all these years, when the real estate market has been very active.

Now, due to geopolitical events that also have ramifications for all market trends, the construction industry faces challenges that could threaten its further growth. It is again necessary, similar to 2014, to provide essential stimuli to avoid this sector’s growth being threatened.

A large part of the work has already been completed in the energy domain, through the amending of existing laws and the adopting of a new legislative framework to regulate this area, which places a focus on the construction of facilities and infrastructure required to produce electricity from renewable energy sources.

A new cycle of investments in construction projects for residential and business properties, warehousing and other commercial buildings could be initiated through the further reform of the institute of conversion with an accompanying fee and changing the concept that conversion and the payment of conversion fees represents an obstacle to obtaining a building permit.

The next vital step in the energy sector is ensuring the most effective application of the new legislative framework and the implementation of the procedures envisaged by these regulations

Within the committee, we are satisfied with what’s been done to date in the area of digitising the cadastral register and introducing e-counters. All cases launched via the e-counter are resolved under acceptable deadlines and, in this sense, progress is visible. However, problems that existed prior to the digitisation of the cadastre – in terms of a certain number of unresolved cases for which requests were submitted prior to digitisation – remain current. The further resolving of this challenge will provide the basis to really see all the effects and benefits of digitisation. Responsibility for all of the aforementioned cannot be transferred solely to the Real Estate Cadastre, but rather requires the participation of all stakeholders in order for us to jointly achieve a systemic solution.

The committee, in communication with the competent bodies, works actively to formulate a proposal on how the instituting of the conversion of the right of use into the right of ownership over construction land for a fee can be amended in such a way that completely abolishes the payment of the fee for converting the right of use and the right of lease into the right of ownership, or, in the case that this is unfeasible, reducing the amount of the fee and simplifying the calculation procedure itself while making it more predictable for investors. Of course, care must be taken regarding individuals and businesses that have previously paid high amounts as conversion fees to ensure that they are adequately compensated accordingly.

In the area of energy, the next vital step is ensuring the most effective application of the new legislative framework and the implementation of the procedures envisaged by these regulations, which naturally demands cooperation and the best possible communication of all energy market participants with the Ministry of Mining and Energy, the Energy Agency, as well as EPS and EMS [state-owned electric utility power and electrical transmission companies].

We will continue our dialogue with the Republic Geodetic Authority, with which we enjoy excellent cooperation, in order for us to jointly overcome the challenges ahead as soon as possible.

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