In the current phase of the pandemic, the major effects on the construction sector are late to show. A slowdown in home sales manifested itself during the quarantine months (March-April), when potential buyers did not have the physical opportunity to inspect the future home. However, home sales have resumed since May in volumes comparable to those of 2019. This is partly explained by unmet demand in previous months. However, a full impact on the construction sector is expected towards the end of the year. A signal to this effect are the reduced sales of construction materials in the first half of this year and the reduction in the number of permissive acts requested/issued during this period.

The difficulties caused by the pandemic are also coupled by a number of older impediments that obstruct the activity of the sector. First of all, it is about the slow and complicated process of issuing building permits in Chisinau municipality. The need to update the urban plan has become an artificial obstacle since in the absence of it, local public authorities should be guided by the old plan. Another impediment is the postponement of the adoption in Parliament of the Urban Planning and Construction Code, which integrates a set of reforms expected by the sector. These reforms would propel the Republic of Moldova into the World Bank’s Doing Business ranking, according to which our position in the world ranking for 2020 in terms of construction permits is 156 out of 190 countries.

The access of developers and road builders to the public procurement system is limited. At the same time, the participation of Moldovan road builders in road infrastructure projects is conditioned by the large volumes of works that they can only support in consortia with foreign companies, the role of the local participant being a “secondary” one. Bidding for smaller lots would increase the participation of Moldovan companies. Tender (and payment) conditions are considered to be unfair compared to similar tenders organized by the World Bank or the United Nations. The emphasis is only on prices, which are as low as possible, while the technical offer only accounts for 20%, which practically prevents local companies from participating in public procurement. An adjustment of the tender terms to international standards is considered to be a necessary condition for stimulating investment in this area. Likewise, the payment for works in 2 to 4 weeks after the signing of the acceptance documents should be something normal, which is not the case in relation to works performed for the customers in the budget system.

At the same time, there is little potential for replacement of imports of construction materials. If the raw materials (cement, gravel, concrete, brick) is comparatively better, other building materials (terracotta, paints, technical glass) come exclusively from import.

* This information is collected during the discussions conducted by the experts who elaborate the Impact Study of the COVID-19 pandemic on the sectors of the economy. The data can be taken from the website www.consecon.gov.md only with the obligatory mention of the source “Economic Council under the Prime Minister of the Republic of Moldova” and the specification that “The impact study of the COVID-19 pandemic on the economic sectors is carried out by The Economic Council jointly with the Ministry of Economy and Infrastructure, with the support of the European Bank for Reconstruction and Development and the United Kingdom Government Fund for Good Governance. ”

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund, and the International Finance Corporation’s Investment Climate Reform Project funded by the Government of Sweden’s International Development Agency.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund.