2020 July 30 15:04

Russian Gov’t to regulate determining evaluation costs of domestically built ships

Russian government has published on its legal acts portal a draft law that proposes to introduce criteria for an objective determination the value of ship construction in Russia to make the procedure more reliable and transparent.

The goverment document says there were some shortcomings in the legislation of the Russian Federation which make it difficult to conduct an audit for the effectiveness of the use of budget funds allocated for capital investments, make the process more reliable while determining the cost for design, engineering, construction, drydocking or ship recycling.

The draft law envisages that the Russian government will approve: the procedure for verifying the reliability (expertise) of justification of estimated cost of design, construction, repair, ship recycling and issuance of an opinion based on the results of verification (expertise); requirements to organizations that conduct verification of the reliability (expertise) of estimated cost of design, construction, repair, and recycling;  the procedure for the development and approval of standards for the labor intensity of design, construction, repair, and recycling of ships.

The amendments also provides that the government determines the powers of the authorized federal executive body in the field of industrial policy (the Ministry of Industry and Trade of the Russian Federation) in determining the evaluation cost of entire process, guidance in determining labor inputs in the design, construction, repair, recycling of ships and the approval of regulatory and methodological documents used in determining the labor intensity.

The draft law also provides provisions that determine the features of the formation and implementation of industrial policy of Russia in the field of pricing and determination of the labor intensity of design, construction, repair, and recycling of ships.

The introduction of a mandatory verification of the reliability (examination) of justifications for the estimated cost of building ships, the construction of which is implemented as investment projects, the financing of which is planned to be carried out in full or in part at the expense of the federal budget, the budgets of the constituent entities of the Russian Federation, local budgets, will ensure the verification of the efficiency of use of funds allocated for capital investments of the above budgets.