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Construction firms are growing in Russia

For many decades the former government in Russia provided almost everything for its people, including housing. Citizens paid little or no rent.

Now, however, with the free market system gradually gaining a foothold, construction companies are springing up and building houses that people can purchase and designate whatever they want in the way of construction.This scenario of the Russian construction scene was provided by Vladimir A. Ivanchikov, first deputy general director of Alfa, a housing construction association based in Moscow, and Michail I. Salenko, one of four owners of Elf, a residential and commercial construction and reconstruction company in St. Petersburg.

Both men are part of a delegation of a dozen Russian businessmen in Salt Lake City in a program sponsored by the Salt Lake Rotary Club to help them pickup some tips about American building, business practices, inventory control, project delivery systems - anything that makes the free enterprise system work.

Speaking through interpreter Madina Bikboulatova from the Center for Citizen Initiatives, Ivanchikov said he has been working for his Moscow company since 1990 and is involved in building 1,500 houses that have between 1,000 and 6,000 square-feet.

The 2- to 3-story houses have a living room, 2-5 bedrooms, a kitchen, a bathroom on each floor, a garage for one or two cars and some have inside swimming pools. The houses are built of brick and concrete and the inside insulation is provided by light concrete blocks.

Ivanchikov said technology used in building American houses can't be used in Russia because sheetrock isn't available. Thus, the interior often is of brick and concrete that is covered with a material to make a textured design. Some of the items for the houses have to be imported, he said.

During the height of communist rule, the state built housing and people lived there and paid little or no rent. Now, people are able to purchase houses.

Asked if all of the people liked the new economic system, Ivanchikov said those with money like the new ways, but the people with little money want a return to the times when government provided almost everything. He said his comment pertained to Moscow and he believes people in other cities have a different view.

Ivanchikov said he hopes most countries won't treat Russia as a third-world country as it emerges from communism and believes the Center for Citizen Initiatives is a good program that will help the United States provide some valuable help to the Russian people.

Salenko said his company is a joint stock closed corporation also involved in building houses. Last year, the World Bank and St. Petersburg government officials combined to offer some development land and Salenko's company was the successful bidder on a portion of it.

This is the first project in Russia using this method of development, and Elf is building townhomes for 50 customers. He said the construction industry in St. Petersburg has dropped drastically in the last five years, but believes with mortgage programs that will help low-income people the situation could change.

Salenko said people in St. Petersburg don't have the money for home mortgages and banks need to develop a program to provide more mortgage money to low income families. That's why Russian companies are interested in forming partnerships with foreign companies.

He wasn't surprised with what he has seen in the United States so far, but is impressed with the attitude of employees and managers in each of the companies the group has visited because they all seem to be working toward making the city and state a better place.

Neither man had heard about Rotary International before their visit to the United States, but both said they plan to join the Rotary clubs in their respective cities when they return home.