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Tailor-made laws in the Western Balkans and Turkey

Law Amending the Law on Construction Land - Tailor-made laws in the Western Balkans and Turkey

Law Amending the Law on Construction Land

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Introduction

Article 3 in the Law Amending the Law on Construction Land (144/2012) eliminates deadlines for obtaining building permits and finishing construction projects on state-owned land. These deadlines were previously part of direct agreements between the state and companies that wanted to buy construction rights. Article 3 amends Article 19 in the Law on Construction from 2011, which established time limits for obtaining permits and completing construction, based on the type of building. According to Article 19, if a company did not meet the deadlines it had to return the land to the state.

Country
North Macedonia
Sector
Construction and urbanism
Type of Law
Capturing a market, an industry or public resources

Description of the law

Article 3 in the Law Amending the Law on Construction Land (144/2012) eliminates deadlines for obtaining building permits and finishing construction projects on state-owned land. These deadlines were previously part of direct agreements between the state and companies that wanted to buy construction rights. Article 3 amends Article 19 in the Law on Construction from 2011, which established time limits for obtaining permits and completing construction, based on the type of building. According to Article 19, if a company did not meet the deadlines it had to return the land to the state.

The elimination of deadlines described in Article 3 means that private constructors can work on state-owned land for an unlimited period of time. This amendment was introduced in 2012 when the Develop Group company was struggling to meet its deadline for building Hotel Marriot in Skopje. As a result of the amendment, Hotel Marriot could be finished three years after the original deadline without any penalties.

Hotel Marriot is part of the Skopje 2014 project, financed by the then government of the conservative VMRO-DPMNE party (see here, here and here). One of the main owners of Develop Group is Aleksandar Ivanovski, a businessman close to the VMRO-DPMNE party, which had a majority in Parliament at the time. Since June 2018, the former director of the Administration for Security and Counterintelligence, Saso Mijalkov’s family, has owned one-third of Develop Group. Mijalkov was a high official in the VMRO-DPMNE party during their term of office from 2008 to 2016.

Article 3 applies to building rights obtained through direct agreements but not through public bidding. In 2007 and 2008, Develop Group bought 30 per cent of the land where the Hotel Marriot would be built. In 2009, that qualified the group to buy the right to build on the rest of the land through a direct agreement with the government. As part of the agreement, the Develop Group had to obtain a building permit within six months and build the hotel in a maximum of three years, otherwise the state would take back the land. The hotel was supposed to be finished by 2013.

However, in 2012 the construction was far from finished and the deadline could not be met. The hotel eventually opened in May 2016. Despite the delay, the government did not terminate the contract or recover the land. The amendment to the law in 2012 was followed by an agreement in 2013 between Develop Group and the then Minister of Transport and Communications Mile Janakieski to cancel the original deadline, so that the company could continue to construct the hotel with no obstacles.