September 8, 2020
Infrastructure projects in Uzbekistan
1. Ongoing and planned infrastructure projects
1.1.Projects for the construction of Railways
1.3.The projects on construction of roads
2.1.Legal framework of ongoing infrastructure projects
3. Advantages of the industry in Uzbekistan and the business interest of a potential investor
1. Ongoing and planned infrastructure projects
1.1.Projects for the construction of Railways
One of the largest and strategically most important projects in the transport infrastructure sector is the construction of the Uzbekistan-Kyrgyzstan-China railway. This transport corridor is characterized by its short length, as well as the possibility of convenient access to the sea. The railway will significantly improve transport links between the countries. The relevance of this project is also due to the need for a safe and reliable type of transport for the transport of goods during the pandemic, i.e. railways.
It is expected that the railway will run in hard-to-reach places, in particular mountainous areas. At the moment, the parties are actively negotiating on the choice of the most optimal route of the railway, as well as on various aspects of technical, investment and financial nature.
The project is included into the Comprehensive Program for improving transport infrastructure and diversifying foreign trade routes for cargo transportation for 2018 – 2022, approved by the Decree of the President of Uzbekistan No.PP-3422 dated 02.12.2017.
Below is a table of some promising projects in this industry. The table is provided by the Ministry of transport of Uzbekistan.
Resolution of the Cabinet of Ministers No. 48 of 18.01.2019 approved the Concept of implementing “Smart city” technologies. One of its tasks is to solve problems related to the engineering and communication state of cities, and to update the worn – out and outdated urban infrastructure. Thus, the concept provides for the introduction of “smart” systems in various industries, including in the field of water supply and sanitation.
One of the projects involves such introduction of a “smart” water supply system in the city of Tashkent. The French company SUEZ International won the tender for a seven-year project to update the water supply system of the city of Tashkent. The cost of the project is 185.4 million Euros, of which 142 million Euros will be spent from leading European banks’ loans.
The project is considered a pilot in this industry. It is planned to use “smart” and digital management tools in the water supply monitoring system. By implementing technologies that meet the latest international standards, water consumption will be optimized. These technologies will help to identify water leaks and areas that need to be repaired in time. The new water supply system will focus primarily on first-class customer service. This is reported on the official website of the company.
1.3. The projects on construction of roads
As President Sh. Mirziyoyev pointed out in his speech in 2019, “98 percent of all cargo and 88 percent of passengers are transported by road”. Accordingly, the development of road infrastructure is a priority. At the same time, the President gave instructions on the implementation of 18 major projects based on partnership, covering 1.6 thousand kilometers of roads of international and national significance. Road construction projects are funded by major international financial institutions such as the World Bank, the European Bank for reconstruction and development, the Asian Development Bank, the Islamic Development Bank, the Saudi Development Fund and the Kuwait Fund for Arab economic development.
2.1.Legal framework of ongoing infrastructure projects
The legal basis for improving water supply systems in Uzbekistan is the presidential Decree No. PD-5883 of 26.11.2019 “On measures to improve water resources management in the Republic of Uzbekistan, to increase the level of drinking water supply and improve its quality”, as well as the Presidential Decree No. PP-4536 of 26.11.2019 “On further improvement of the water supply system of the Republic”.
The legal basis for reconstruction of roads was the presidential Decree No. PD-5890 of 09.12.2019 “On measures of deep reform of the road system of the Republic of Uzbekistan”. Active cooperation with foreign investors in this area also provides for the Presidential Decree No. PP-4035 of 27.11.2018 “On measures to introduce advanced foreign methods of organizing work in the field of construction and operation of highways”. The state control body in this sector is the Inspection for quality control of road construction works under the Ministry of transport of the Republic of Uzbekistan (hereinafter Inspection).
2.2.State control over the implementation of infrastructure projects. The process of liberalization and modernization
State control over these industries is carried out in a general manner as for the entire construction industry:
- Licensing;
- State examination;
- Development and issuance of architectural and planning tasks for the design of all types of construction;
- Approval of design and estimate documentation;
- Notification of the start of construction and installation works etc.
But at present, state control in the construction sector is undergoing a period of liberalization. Thus, starting from January 2021, a number of licenses and licensing requirements are canceled: for example, licensing of the design, construction, operation and repair of bridges and tunnels; expert opinion on projects and works on commissioning of objects, products and technologies in terms of their compliance with the established requirements in the field of railway transport, etc. In addition, from March 1, 2020, the requirements for the implementation of state construction control of capital repairs, with the exception of objects financed from the budget of the budget system, are also canceled.
Also, the existing procedures of acceptance in operation of finished objects were replaced by the procedure of issuing permits for their operation by the Inspection and territorial inspections within the following deadlines:
- for low-risk facilities, regardless of funding sources-from may 1, 2020;
- for objects financed from the funds of public procurement entities-from January 1, 2022;
- for objects financed from other sources-from January 1, 2021.
Since April 1, 2020, an improved procedure for state construction control based on the risk categories and functional purpose of objects is being implemented:
- the examination of project documentation, the procedure and frequency of state construction control are subject to differentiated requirements depending on their risk categories and the functional purpose of objects;
- for low-risk objects and individual housing construction, mandatory examination of project documentation, author’s supervision and state construction control are canceled. Instead, an instrumental technical survey is being introduced to ensure that the object meets the requirements of construction legislation, which is carried out by territorial inspections for control in the construction sector at the regional divisions of the Ministry of construction upon completion of construction;
- the qualification requirements and responsibility of inspectors of the construction inspection Under the Ministry of construction and territorial inspections, as well as those who carry out technical and author’s supervision of objects with a high risk category are being strengthened;
- in the course of 2020, modern IT tools will be gradually introduced, including electronic document management within the framework of state construction control in the national information system “Transparent construction”. On June 1, in Tashkent the “Control in construction” subsystem will be launched in a pilot mode.
3.Advantages of the industry in Uzbekistan and the business interest of a potential investor
Presidential decree No. PD-5890 of 09.12.2019 “On measures for deep reform of the road system of the Republic of Uzbekistan” introduced a number of innovations and simplifications in the field of road infrastructure. So, from January 1, 2020:
- contracts for newly started projects for the design, construction, reconstruction and major repairs of roads, as well as technical supervision of road construction works are concluded exclusively on the basis of a tender conducted in accordance with the legislation on public procurement;
- consulting services (technical supervision) in relation to road construction works can be provided by independent organizations on an outsourced basis in accordance with international practice, including FIDIC regulations;
- the functions of the customer for the construction and repair of city streets of Tashkent are carried out, as an experiment, by the Khokimiyat of Tashkent.
As well as from January 1, 2020, the requirements are introduced according to which:
- organizations that design construction, reconstruction and major repairs of public roads, regional highways and bridges are only LLC “Yul loyikha burosi”, JSC “Boshtranstloyikha” and SUE “Institute for the design of road bridges, overpasses and other artificial structures”;
- the customer for the construction, reconstruction and overhaul of road bridges, overpasses and other artificial structures is the UE “Directorate for the construction and reconstruction of road bridges, overpasses and other artificial structures”;
- contractors for the construction, reconstruction and major repairs of public roads and regional highways and bridges are only structural divisions of the Committee and up “Trust “Kuprikkurilish”;
- need to obtain a license for the right to carry out activities in the field of oil bitumen sales of road brands.
According to presidential Decree PD-5963 from March 14, 2020 up to December 31, 2028, foreign normative documents in the field of technical regulation in the field of urban development can be applied simultaneously with national acts in Uzbekistan.