Changes to construction pricing rules approved: Ministry for Communities and Territories Development

The Cabinet of Ministers of Ukraine has endorsed a resolution entitled “Certain peculiarities of construction pricing under martial law” drafted by the Ministry for Communities and Territories Development.

The resolution establishes uniform, transparent, and predictable rules for determining the cost of construction work for projects financed by public funds. In particular, the document ensures a balance between the interests of the state and contractors: it offers fair conditions for businesses and establishes a transparent mechanism for monitoring prices for construction materials and the use of funds.

"In wartime, the reconstruction and protection of critical infrastructure require clear and understandable rules. That is why the Ministry for Communities and Territories Development is updating its approaches to determining construction costs so that every hryvnia is used efficiently and transparently. We are reforming the pricing system, focusing on a modern, market-based approach where everything is based on real data and open sources. This will make the calculation of construction costs transparent, ensure a level playing field for all market participants, and, most importantly, increase confidence in the reconstruction process," said Deputy Prime Minister for the Restoration of Ukraine – Minister for Communities and Territories Development Oleksii Kuleba.

The resolution provides for:

A unified approach to determining general production and administrative costs, as well as profits. 

Clear percentage benchmarks are set: 10% for general production costs, 3% for administrative costs, and 15% of profit from direct costs. This makes the calculation of construction costs understandable, fair, and predictable for all market participants.

An updated approach to calculating wages.

The remuneration of construction workers must not be lower than the minimum industry guarantees specified in the joint agreement between the Ministry for Communities and Territories Development and the trade union. In difficult or dangerous conditions, particularly in areas of active or potential combat operations, the level of remuneration may be increased additionally.

Creation of a database of prices for construction materials, which will be included in the Unified State Electronic System in the Construction Sector (USESCB).

It will compile data on market prices for materials from various sources, including Prozorro, customs and tax statistics, and manufacturers' price lists. This will allow for the comparison of estimated prices with market prices and prevent overpricing.

Introduction of a Construction Product Codifier.

It will become a single digital reference book that streamlines the names and characteristics of materials. This will allow all market participants to “speak the same language” and will form the basis for the Construction Materials Price Database.

The document was developed by a working group under the Ministry for Communities and Territories Development, which included representatives of the construction businesses, relevant associations, international organizations, and anti-corruption initiatives, as well as the State Audit Service, the Accounting Chamber, and the Antimonopoly Committee of Ukraine. Such a format ensured open discussion and allowed for the coordination of decisions that take into account the interests of the market, the state, and international partners.

This decision will bring the pricing system closer to real market conditions, make the calculation of construction costs transparent and protected from manipulation, and guarantee decent wages and the effective use of funds during reconstruction.

The new rules will remain in force during martial law and for one year after its end.