Armenian developers blame bureaucracy for construction delays, warn of economic impact

Delays in Armenia’s new residential construction are overwhelmingly driven by inefficient administrative procedures rather than builders’ failures, according to the head of the Armenian Association of Developers.

In an interview with Panorama.am on Friday, its president Gurgen Grigoryan said 95% or more of delays stem from prolonged permitting, documentation and registration processes, while developers’ fault accounts for just 1% to 2%.

Grigoryan claims developers often complete construction on time, but then wait months for final acceptance certificates and subsequent state registration with the Cadaster Committee. “These paperwork stages alone can take dozens of days or even months,” he said.

Grigoryan argued that developers have the strongest incentive to avoid delays because they bear the financial and legal consequences. When a 36-month urban development project stretches to 45 months, he said, developers shoulder additional loan costs, pay substantial local fees to extend building permits and face increased legal and financial risks with banks and buyers.

The state also loses out as expected tax revenues, including value-added tax and profit tax, are delayed.

According to Grigoryan, delays are further exacerbated by utility providers for gas, water and electricity, as well as weak coordination among state agencies.

“These factors have made businesses afraid to launch new urban development projects,” he said, warning of a real slowdown in new construction. The sector, together with related industries, accounts for roughly one-fifth of Armenia’s gross domestic product, he noted.

Grigoryan welcomed a recent initiative by the Cadaster Committee to allow registration procedures to begin when a building reaches 81% completion. The move would let developers start what he described as an “exhausting” documentation process earlier, easing pressure on project timelines.

He also criticized new environmental compliance requirements aimed at reducing air pollution, saying developers have become “scapegoats”. Grigoryan argued that major pollution sources are the lack of green buffer zones around Yerevan and open-pit mines, not construction activity, which he said has a minimal impact.

He stated dust-control nets are largely symbolic and ineffective, particularly when enforced at stages where they no longer serve a practical purpose.

While acknowledging that state bodies are generally open to dialogue, Grigoryan said reforms move too slowly. “What could be solved in one or two steps often takes dozens,” he said, calling for genuine optimization of administrative processes.