Support The Moscow Times!

State-Funded Projects to Face Scrutiny by Independent Experts

Prime Minister Dmitry Medvedev has signed a decree requiring all major state-funded investment projects to undergo a compulsory technological and financial audit by a panel of independent experts and community representatives.

The document, developed by the Economic Development Ministry, is one of the country's development priorities listed in President Vladimir Putin's decree "On Long-Term State Economic Policy" from last May.

The new audit mechanism will be introduced in two stages. Projects with a budget of over 8 billion rubles ($255 million) will be audited from 2014, and then projects with a budget of 1.5 billion rubles ($48 million) will be subject to audit from 2015.

The measure is necessary to prevent project overspending, said Elvira Nabiullina, Putin's economic adviser, Vedomosti reported Monday.

"In my view, any new procedures that allow the public to control costs of state-funded projects are a positive thing," Alexei Filimonov, head of the Astera real estate investment consulting firm, told The Moscow Times on Monday.

Elvira Nabiullina, a Putin aide, said the measure would prevent overspending.

Existing projects will not be affected unless the scope changes after the decree goes into effect in 2014. Current and future state projects of any size that are classified as secret will never be subject to audit.

However, the government decided to put some projects, including the state road-building company Avtodor, through the system in order to identify possible pitfalls, Zakon.ru reported Monday.

First, a panel of independent experts will review the project to make sure it is technologically and financially sound. Then another panel of community and government experts will decide whether the project is necessary in the first place.

According to Open Government Minister Mikhail Abyzov, the government will always have the final word. It will not be possible to trick the system by underpricing the project. Any price increase will have to be reviewed by experts, Vedomosti reported Monday.

The document also set strict guidelines for selecting an expert. An organization must have at least seven years of experience in auditing investment projects worth over 1.5 billion rubles and a sound knowledge of construction laws, as well as a solid understanding of the construction market.

On the individual level, experts must have a clear criminal record and a university degree related to the project.

"It is important to note that the effectiveness [of the audit] procedures depends on the professional level of the experts. Since large projects would normally be part of a long-term development strategy, [lack of] knowledge of that particular strategy by panel experts, and [not] agreeing with that strategy on a personal level, in my view, is one of the key problems our country faces today,"?  Filimonov said.

Contact the author at g.moukine@imedia.ru

Sign up for our free weekly newsletter

Our weekly newsletter contains a hand-picked selection of news, features, analysiss and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview
Subscribers agree to the Privacy Policy

A Message from The Moscow Times:

Dear readers,

We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."

These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.

We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.

By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more