Alexander Glimbovsky: "As for the prospects of the construction market can only express cautious optimism"

Aleksander Glimbovsky: "As for the prospects of the construction market I can only express cautious optimism". Despite some apparent revival of the Ukrainian construction market, many, particularly small construction companies are still experiencing difficulties in obtaining orders. They are forced to dump and build almost with zero profitability to save the business. Naturally, under such conditions in the market suffer even large, well established companies.

 These and other features of the modern domestic building told us Glimbovsky Aleksander, Chairman of the Supervisory Board of the Group of Companies “Altis-Holding”

 - Alexander Vatslavovich, in 2009 the corporation was the general contractor for 16 construction projects with a total area of about 810 thousand m2. What are the figures of 2010?

- Past 2010 was somewhat better than 2009, we received several large projects. Since the second half of the year we loaded our power for almost 100%. We acted as general contractor for 11 projects, the total area of 615.5 thousand m2.

 - What projects were completed in 2010?

- Of the major projects in the past year we completed construction of a logistics center in “Terminal. Brovary” of area of about 49 thousand m2, and finished the arrangement of platforms at the airport "Borispol".

 - What about the current projects?

- In the past year we designed and conducted preparatory work for the construction of the entertainment center "PortCity" area of 62.4 thousand m2 in Lutsk. The work there continues.
In the multifunctional complex “Domosfera” a total area of 100 thousand m2, monolith frame, the roof and metal structures are finished, we are ready for glazing of facades and others. The customer could draw loans for the completion of the object and resolve the issue with anchor tenants: the operator of the hotel part, which is being built first and foremost, there will be a network of three-star hotel Ramada Encore. We intend to pass the first stage later this year.
The zero cycle is completed in the residential house on 9-11 Mazeppa Str., area of 47.8 thousand m2.
We have long since begun to pay great attention to the construction of infrastructure facilities. Today, we are actively working on a new international airport terminal in Lviv, total area is 39 thousand m2. In the past year the frame was erected, the external glazing was performed, heating of buildings was provided. We plan to pass the object at the end of this year.
We are actively working on culture and health complex with a water park, recreation area and parking of boats in Kiev. We have made much of piling, poured a slab, began the vertical elements of the building framework. We have finished work on the formation of the coastline and the marina. We plan to pass the first phase of the complex in 2012.

In Borispol we are constructing two objects: the Hall of official delegations and flight catering manufacturing plant.
In 2010 we also completed the preparatory work for construction, and conduct detailed design of "Hospital of the Future" (21 Zabolotnogo Str., an area of 50 000m2). Readiness of project documentation is very high, and the object can be implemented within two years.
Among other things, we are buiding an office center in Berdichev (7000m2), constructing a dwelling house in Borispol, office center on Krasnozvezdny Prospect, an area of 2500m2, completed the construction of the zero cycle of an office building on 2/32-34 Reznitskaya /Moskovskaya Str.in Kiev.
In addition, there are sites where we do special work as contractors: in Dnepropetrovsk airport, in airport Zhulyany, in "Megamarket", participated in glazing of a shopping mall "Bolshevik" and a large residential complex in Yalta.

 - What objects have been frozen?

- At this stage the project hotel-residential complex "Silver Springs" is frozen. We have finished the work of the zero cycle.
In the construction of office and residential complex on Mechnikov Str. work stopped at the foundation pit. An area adjacent to the retaining wall was reinforced by three-storey structures of the future parking lot, which makes it possible to avoid negative consequences at the site.

- Is there a tendency to unfreeze construction sites?

- There are active negotiations.

 - Your assessment of the overall situation in the construction market in the country.

- I would estimate it as serious. As far as I know, there was even a drop compared with 2009. Despite some performance of improvement, the overall situation is very unstable, there is no special revival. And about the prospects of the construction market we can express only cautious optimism.
If we talk about our company, we are loaded at 100%, but we see what's going on and understand that market recovery is still far.
Construction market is an indicator of the economic situation in the country. We are the first to feel the crisis and the latest to feel the end of it. As soon as the economy improves, and there is trend to it, business and construction shall improve also.

 - How do you evaluate a new law on urban planning?

- This is a very progressive standard. We also took part in its development. First of all, it certainly is useful for investors and developers. It allows you to develop projects and obtain a building permit in the shortest possible time and without unnecessary official circumlocution. I hope that within a few months it will be possible to do something that used to take years. Naturally, this will be reflected on our work, because the easier it will be for the investors, the faster we will get orders.

- What can you say about the organization and conduct of private and public tenders in the building?

- With regard to private business, it has a rule: who pays the money, sets the rules. Hardly in this case tendering can be regulated. Probably, this is not necessary. In most cases, private tenders are held without corruption.  
As for public tenders let me just note that if you want you can speed up the process and make it more correct to avoid involvement in the multimillion-dollar tenders of companies that have been created, for example, six months ago ... In Ukraine, it sometimes happens that companies worked for obtaining a reputation for many years, lose to firms, of which no one knew before the tender. I am sure we must have clear, written into the legal framework conditions for participation in public tenders.
Now we are trying to participate in international tenders and even won some of them. In particular, we are working in Poland. The procedures for organizing and conducting tenders are very transparent. The first stage - it's prequalification: the customer defines the capabilities of the construction company for the project. In the second stage specific suggestions for materials, prices and terms are proposed, the latter two are usually crucial. After determining the winner, all the documentation is available online in an open access and, if there is reason, competitors may make a complaint about the proposal of the winner. This approach eliminates the dumping, participation of short-living companies and any other manifestation of corruption.
I believe that major construction companies in Ukraine should be interested in such a transparent system.

- To win the public tender one only need to offer the best price and acceptable terms?

- Often, yes. In developed countries, however, construction companies, among other things state must provide performance guarantees to the state. These guarantees are granted by a bank, which will carefully study the company and its ability to project implementation, will take on the risks and, if necessary, compensate for all costs. That must be like this in Ukraine too – there is no other way for a civilized construction.
Again, this should be interesting not only to the state but also to large companies, which have proved themselves in the market that can obtain bank guarantees and, thus lay claim to victory in major tenders.

- Cost of construction work: how does it correspond to reality?

- Prices of construction work have been reduced at the end of 2008, and since then have not grown. In 2010, there were projects realization of which bordered on the self-cost.

 - The general contractor took the projects even to the detriment of their own profitability?

- Yes, last year it happened often enough. Many worked on the verge of profitability, even at a loss. Some companies were forced to go to dumping, not laying in the cost of depreciation of machinery, plant and equipment and its own database to store the operating balance, to keep staff, etc. But I'm sure it's a road to nowhere.
We believe that the company may normally exist only when its profitability is within 7%. At this rate we are guided, in fact, any company should develop, not just consume earnings.

 - What are the plans for 2010. Is there a program?

- In 2011 we look with optimism, and we will follow the path of development, rather than stabilization. Despite the fact that this year will be loaded at 100%, we do not forget about the future and understand that there is still much to do to be able to work and develop in the future, and it needs to be always half a step ahead, offering the market today technology and high quality work.

Interviewed Evgeniy RIDOSH

Biography
Alexander Vatslavovich Glimbovsky was born in March 7, 1960 in Koziatyn Vinnitsa region.

In 1982 graduated from the Kiev Civil Engineering Institute.

In 1986 defended his thesis

Since 1987, he taught in Kiev Civil Engineering Institute.

1991 - co-founder of LLC "Meridian"
In 1995 he founded and headed the company Altis, which later grew into a group of companies “Altis-Holding”.

In 2008 he was elected deputy chairman of the Ukrainian Construction Association.
Since 2010 - Chairman of the Supervisory Board of the Group of Companies Altis-Holding.

 

Reference:
Name: group of companies “Altis Holding”
Year of  foundation: 1995
Range of activities: group comprises more than 10 companies and is engaged in: the design and engineering, construction and installation works: roofing and facade work, pre-fabricated buildings and high-rise construction, concrete work, foundations; special works: the "zero cycle", earthworks, external networks, construction of special facilities, landscaping, the provision of electricity, production of building materials and construction: aluminium and metal structures, reinforced concrete, glass processing and production of glass, the delivery of construction materials, infrastructure construction.
Number of employees: 2500
Number of completed projects: 100
Number of sold floor space: 1,000,000 m2

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