PRESIDENTIAL DECREE OF THE REPUBLIC OF UZBEKISTAN

of May 6, 2003 No. UP-3240

About the main directions of further deepening of economic reforms in capital construction

For the purpose of further deepening of economic reforms in capital construction, widespread introduction in industry of the economic relations meeting the principles and the requirements of market economy, forming of the developed markets of contractor's, project works and construction materials, enhancement of the mechanism of pricing in construction, increases in responsibility of all participants of investment process for resulting effects and efficiency of projects implementation:

1. Determine the main directions of further deepening of economic reforms in capital construction:

full completion in 2003-2004 of processes of privatization and privatization of the project and contract construction organizations, education on their base is preferential private and joint businesses, creation of competitive environment in the market of project and construction works;

widespread introduction of the market principles and mechanisms in management system and the economic relations in capital construction, increase in level of the organization of the competitive biddings (tenders) in case of order placement for execution of project and construction works;

transition to construction of "turnkey" objects as to the main form of the organization of construction, creation of the engineering companies and project and construction organizations providing performance of works with high quality and "turnkey" commissioning of the objects;

expansion of the market of construction materials, development of production of their progressive types, implementation of modern technologies at the companies of the construction industry.

2. Determine that new construction, expansion, reconstruction and modernization of the companies at the expense of centralized sources, and also the investments involved under guarantee of the Government are performed on the terms of "turnkey" performance of works with the conclusion of the contract only on the basis of the competitive (tender) biddings. At the same time the obligation on carrying out the competitive (tender) biddings extends to the purchase of goods (works, services) performed on the amount in equivalent over 100 thousand US dollars under one contract

To the Ministry of Economics, Gosarkhitektstroy, the Ministry of Finance, the Ministry of Justice of the Republic of Uzbekistan to submit in the Cabinet of Ministers for approval new Regulations on the organization of "turnkey" construction of facilities and the Standard agreement of building contract of "turnkey" object in a month.

In the specified documents it is accurate to determine that:

the customer shall advance performance of works (services) at the rate to 30 percent from the cost pledged in the project, perform the current financing according to the approved schedule at the rate to 50 percent, taking into account advancing and make final settlements after completion of asset construction and its commissioning;

the contractor provides commissioning of the object to the customer according to the approved project and requirements caused in the contract and bears the economic responsibility before the customer for contract performance on implementation of complex of works at all stages of investment process, for quality of construction and timely commissioning of the object;

the contractor can attract the loans of commercial banks for accomplishment of contractual commitments on "turnkey" asset construction;

responsibility for resulting financial results of construction and respect for the contract price established in the contract is assigned to the contractor, and the economy reached as a result of decrease in actual cost remains at its order.

3. To the Ministry of Finance of the Republic of Uzbekistan together with the Central bank, commercial banks to study and make offers on measures for increase in current assets of contract organizations in the Cabinet of Ministers in a month. At the same time to provide reducing zvennost in construction management system, with the direction of the released assets on replenishment of current assets of contract organizations.

4. Establish procedure in case of which:

order placement for contract works on the amount in equivalent over 100 thousand US dollars under one contract is made only on the terms of carrying out the competitive biddings;

only contract organizations having current assets in the amount of at least 20 percent from the cost of works (services) or the bank guarantee on provision of the specified means can be allowed to participation in the competitive biddings (tenders).

To the Ministry of Economics, Gosarkhitektstroy, the Ministry of Justice of the Republic of Uzbekistan to make in the Cabinet of Ministers offers on modification and amendments in Regulations on the competitive biddings in capital construction in the territory of the Republic of Uzbekistan in a month, having provided measures for strengthening of responsibility for violations of established procedure of carrying out the competitive biddings (tenders).

5. Determine that all relations between the customer and the general contractor, between the general contractor, subcontractors, the project organizations and suppliers of construction materials and designs are under construction without participation of intermediate links only on the basis of contractual relations with the conclusion of the contract.

Together with the interested departments it is cardinal to Ministry of Economics, Ministry of construction, Ministry of Finance, Ministry of Justice of the Republic of Uzbekistan to process Regulations on the organization of construction on contractual basis in a month and to submit for approval in the Cabinet of Ministers. At the same time it is accurate to determine measures of responsibility of the customer and the contractor, having provided that:

the customer bears responsibility for timely allocation of land, provision of format of the customer, preparation of the tender documentation, the organization and carrying out the competitive bidding (tender) for contract works, timely financing according to the approved schedule according to the signed contract (agreement);

the contractor bears responsibility for development and examination of working documentation to the project, performance of works in strict accordance with the schedule approved in the contract and timely input of object, strict observance of the established construction regulations and rules;

acceptance of object in operation is provided with the customer with participation of territorial Inspectorates for control in the field of construction taking into account the established quality standards, and in the presence of variations according to the conclusion of bodies, authorized to exercise control, the exception of amounts of works in the amount of the cost of poor performed building and construction works or remedial action at the expense of means of party at fault is made;

all costs and losses connected with violation of conditions of contracts are compensated at the expense of means of the party at fault - the customer or the contractor.

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