In sports & concert complex after K. Demirchyan has opened 8th international specialized exhibition CAUCASUS BUILDING & RECONSTRUCTION EXPO 2011 that lasted three days, from 8-10 of April 2011. Welcome speech was delivered by Prime Minister of RA Tigran Sargsyan, Minister of Urban Development Vardan Vardanyan and others. According to Tigran Sargsyan, this exhibition will definitely contribute to the development of the industry. : Certainly, we all wish that such events serve for strengthening business relationship between organizations, raising reputation, business development, as well as for information enrichment in construction market. : Despite the wide geography of the exhibition, where besides Armenian companies were also represented organizations from Turkey, Georgia, Belarus, Ukraine and Iran, we should be realistic and accept that the interest in exhibitions has somehow decreased. : According to the organizer, LOGOS EXPO Center, instead of last year's nearly 100 participants the number of companies taking park in exhibition this year hardly topped 60. The reason for participants decrease may be ongoing crisis in construction sector, or perhaps interest decrease in such kind of exhibitions when internet communication is widely spreading. Participation in exhibitions requires significant expenses, when internet is almost free and has unlimited business opportunities.

According to the amendments to the RA Law "On State Due" passed by the Parliament of Armenia at the end of 2010, the annual rate for the right to carry out construction works was raised four times (from 100 000 AMD to 400 000 AMD), and has already led to the dismay of many construction companies. Recent media reports about expressed dissatisfaction of construction companies in Gyumri, is only the visible part of the iceberg of discontent. We agree with Gyumri contractors opinion, that changes in this Law are made absolutely not at the right time. World economic crisis, which in Armenia first of all hit the construction industry , catastrophically reducing the share of construction in the country's GDP, has put many contractors throughout the country to the brink of bankruptcy. In this situation, the Government should find the right way to help these companies survive, but not to strangle them eventually... The most disastrous consequences of this change is much more possible for small and medium-sized construction companies, which are now in a deplorable state. After all, the legal concept of "licensed construction work" is used not only for the construction of big projects, but includes any construction work that requires building permit, including small-scale construction, such as openings in existing walls, replacing the old wooden floors, construction of a small house or building, which are the small company's main activities. When getting license for listed construction activities these small companies automatically become 20% VAT payers(under VAT law) and appears outside of equal competition with many shadow and remodeling bodies (see article). The desire of any government to provide budget revenues are quite normal, but the methods of goal achievement should not be incongruous with today's situation in economy (and construction industry) and the mood of business society, and must not completely kill the entrepreneurial spirit, which already tremendously decays in recent years. Read law changes here (in Armenian)

As reported by The Telegraph, the British Royal Institution of Chartered Surveyors (RICS) says next month's Budget should slash the amount of VAT people pay on repair and maintenance work on their homes in an effort to boost the struggling construction sector. RICS argues that the VAT rise will encourage tax avoidance since more building jobs will be done by cash in hand which could put homeowners more at risk of getting tangled up with "cowboy builders". The impact of the new rate of the sales tax has the potential to cost up to 34,000 construction jobs by 2019, according to RICS' calculations. The demand was among those laid out by RICS in its pre-Budget submission to the Treasury, which aims to encourage growth in the housing and commercial property sectors. Mark Goodwin, director of external affairs at RICS, said: "This Budget provides the Government with a chance to encourage growth and innovation in construction and property, providing much needed jobs, tackling the housing shortage and ensuring that businesses have a continuing supply of high-quality premises." In Britain to struggle with VAT high percentage was launched a special coalition called Cut the VAT Coalition, that includes more than twenty professional institutions and public organizations. Cut the VAT Coalition believes, that reducing the VAT from 17.5% to 5%t for maintenance and home improvement work would help to create around 51,000 new jobs in the construction and property industry and improve the quality of housing in the UK. The 5% VAT on this works is also recommended by European directives (1999/85/EC; 2006/112/EC). Despite the struggle for VAT reduction, to fight against huge budget deficit for 2011, British Government raise the VAT for home improvements from 17.5% to 20%. But the RICS calculations and recommendations, which is the world's leading professional body for qualifications and standards in land, property and construction, now forcing government to take urgent tax relief actions already in March. In addition to all the difficulties in the UK economy, 2010 government figures reveal house building completions at lowest level for 88 years. Completions fell to their lowest level since 1923, just 102,570 homes were completed in England in 2010, down 13% on 2009.

The history of construction of two hydro-power plants on the Arax (Araz) River lasted nearly 10 years, with estimated in 2001 construction cost about US$60-80million. After signing on March 19, 2007 the interstate agreement between Armenia and Iran, the Armenian Energy Minister Armen Movsisyan announced the construction of 2 power plants with capacity of 140 megawatts each, with estimated construction cost about US$140million and construction start in 2008. And finally, according to the latest announcement of Minister, the construction of two 130 megawatts power stations will start in early 2011 with estimated cost US$323million... A distinctive feature of the License Agreement between two countries is that the Armenian side does not finance and build these power stations, and everything is done by the Iranian side. The Armenian part of the station, which is called Meghri HPP must be given to Armenia without indemnity after 20 years, which include 5-year construction period and 15-year exploitation and payback period through the sale of electricity to Iran. Construction will be implemented by the Iranian company Farad-Sepasad, which will solve on its own all the financial and organization problems concerning the construction and the exploitation of Meghri HPP. Meghri HPP energy output is planned to be about 800 million kWh/year, and it must be founded jointly that at the transmission time the electromechanical and hydro mechanical devices have resources for the 10-year effective operation, and the tunnel (18.2km) and engineering structures have resources for 30 years. Along with the construction of hydroelectric power stations, parties are going to start building of a new additional third high-voltage (400kV) transmission line which will increase the power transmission between the two countries to 1000MVt. The construction of this third high-voltage line and "Noravan" substation will cost about € 108 million and will be implemented during 18 months. The length of the transmission line in Armenia is approximately 275 kilometres (from the border of Iran to "Noravan" substation- 80 kilometres, from "Noravan" substation to Hrazdan fifth energy block - 195 kilometres) and 163 kilometres in Iran.

On Friday, December 18, Barack Obama has solemnly signed the law on the extension of tax credits for 2011, thereby continuing the policy of tax stimulus provided by the Republicans. It was some gift to Americans for Christmas and especially for the middle class, which is considered the major driving engine of the US economy... At the beginning of the global economic crisis, the Armenian Government adopted a resolution on stopping planned tax inspections for 2 years period (until 2011), for a small and medium-sized businesses, to create more favorable conditions for doing business and overcome the crisis. For foreign readers this may sound a little bit strange, because there was no any tax stimulus for pushing economy to grow. It was clear only for us - entrepreneurs working in Armenia know what that means, and what a happiness it is to work and live without absurd "planned" tax inspections that lead to repeated increase risk of corruption and create an awful and unpleasant business-doing atmosphere. But let's be objective and say that our today's Government is taking some steps to reduce corruption risks in terms of communication with the tax authorities, as well as steps to reduce the share of shadow economy. However, in the construction industry, particularly in the market of small and medium-sized construction and design companies which mostly serve private customers , shadow remains the main form for the contractor-customer relationships. This problem has been repeatedly raised by us during the last 12 years and there isn't any solution so far. Maybe Santa Claus can help us to draw the Government's attention to our 2011 New Year dreams-wishes about some major industry problems. Our Main desire is to provide opportunities for standing-up and development of the licensed small and medium sized construction companies which are engaged in the market of private house building and repair, by creating the field of equal competition for all market participants (read the article). Not to do so, will be viewed as an anti state activity that leads to huge budget losses, impossibility for licensed small and medium-sized construction companies' legal development, housing is being built and repaired with the break of construction rules. We need completely remove the VAT from the private housing market to open the doors for step-by-step moving toward transparent economy! Our last year's formal request to the Government on this issue was submitted to the Ministry of Finance, which gave us a screen bureaucratic response,- "in order to bring all market participants to the equal competition field, we consider that the best way is to tighten control and force shadow contractors to liability under the law for the illegal business activities.." Dear Finance Deputy Minister, a year later after this response, can You give us an answer; how many shadow contractors were brought to the responsibility by authorities? Or we don't like to realize that it is impossible to prosecute whole nation for what they don't know, no one and never taught them what they have to do or what are the real law requirements? For many years people were learning other laws - the laws of real life, they lived and worked in a society where authorities allowed them shadow acting all the time and even indirectly teaches this illegal thinking way. And now it's too late and amoral to bring somebody to the responsibility and it's time to pull head out of the sand and look at the existing reality. Our second desire is to work and live in a legal "construction environment", relevant to the developed countries of the world. This implies a great work of the Government in the study of the experiences of these countries, finding and introducing the best and appropriate laws, acts or just recommendations. We have many law and regulation omissions in construction industry, which must be turned into internationally accepted laws and regulations to ensure legal protection of all parties involved in construction process. And our most important desire. Yerevan is located on one of the most vulnerable earthquake zones of the world(read related article), but in reality we don't have any modern earthquake-resistant hospital building ... The most urgent measures must be taken to build a basic "skeleton" for Republic earthquake safety -hospitals, schools, kindergartens, office buildings, etc.. There are many unsolved problems not only in our industry but in economy as a whole. They can't be solved by filled up with papers officials, who do not have any time to go out from everyday issues. This conversion requires independent high-level industry professionals and macroeconomics as a whole, who can do it without any bureaucratic pressure, and can provide the legislation and regulations only for mutual State -Entrepreneurship benefits, and create the business environment that can provide fertile ground for decades for the future prosperity of our homeland. We believe and hope that today's Government is able to find this desired gold human potential for reforms and has the will to implement them. Merry Christmas and Happy New Year, and who knows, maybe all this will be the case in 2011 and then we can work and prosper legally and be proud of Armenia.