Analysts: The plan for the adoption of the construction law is very ambitious

Prague - The planned adoption of the new construction law to take effect from 2021 is very ambitious. Rather, it can be expected that the deadline will be postponed and the wording of the law will be adjusted during the legislative process. This was stated by analysts whom ČTK contacted today. According to them, from an economic perspective, it is one of the most necessary legislative changes. Some are concerned about the misuse of the so-called fiction of consent, where the inaction of the office within 30 days will be considered as a consenting opinion.

The Ministry for Regional Development sent the draft bill for public consultation to individual ministries and offices at the end of January. The government is set to discuss it in March. The new construction law is intended to shorten the permitting process for constructions from the current average of 5.4 years to one year. Territorial proceedings, building proceedings, and EIA will merge into a single permitting process. A Supreme Building Authority is to be established, which will be part of the state administration. The proposal further assumes that if the relevant office does not express its opinion within 30 days, the so-called fiction of consent will apply. It will not be possible to approve the construction subsequently.

"The new construction law is one of the most necessary legislative changes from an economic perspective. It would have been too late for its adoption even yesterday. But better in 2021 than never. The law will allow developers and other construction entrepreneurs to respond more flexibly to changes in housing demand, which will create strong pressure for a decrease in real estate prices," stated CzechFund analyst Lukáš Kovanda. According to him, the new building authority should not hire new officials, but the state should transfer them from already existing offices.

BH Securities analyst Štěpán Křeček added that the fiction of consent will indeed speed up the construction permitting process but can be misused. "Some controversial constructions will be able to successfully pass through the permitting process merely because officials intentionally or unintentionally will not find time for them," Křeček pointed out.

According to him, the deadline for the law to take effect in 2021 would be realistic only if it does not become a subject of political struggle. "Given the large number of interest groups that will be affected by the new construction law, it is more likely that the validity of the law will shift significantly and its actual wording will be adjusted during the legislative process. Thus, the final form of the law may differ significantly from the current draft," Křeček stated.

According to ČSOB analyst Petr Dufek, delays caused by appeals from various interest groups remain a critical moment in the construction process. "In this regard, it would be appropriate to objectify the process and set potential penalties for any unauthorized delays of the entire procedure," Dufek noted.

Komerční Banka analyst Jana Steckerová added that with the new construction law, it will probably also be necessary to approve a number of related laws, and even its individual points will evoke complex discussions. "We consider the plan for the law to come into force as early as 2021 to be quite ambitious," Steckerová further stated.

Jiří Vacek, director of the analytical company CEEC Research, added that based on previous experiences, obstruction in the Chamber of Deputies can be expected, and the planned deadline for adoption may thus be postponed.