Construction companies leave dozens of public works contracts void due to rising costs

The sector remembers that the works in competition have out-of-date prices that make it unfeasible to opt for them: “You cannot work at a loss” The construction sector is experiencing a period of prosperity in terms of home sales, but the situation is not so favorable in the field of public works, where the increase in the price of raw materials is causing many contracts put out to tender by administrations in recent months have been deserted. The reason? According to the sector, the budgets for these works set out in the bidding documents are outdated and do not even cover the current costs of execution, after the constant increase in the cost of materials and energy. The Association of Builders and Promoters of Malaga (ACP) has already recorded at least 32 public tenders that have been abandoned in the last year with a combined value of more than 13 million euros. To this we must add another five tenders with an amount of 4.5 million in which it has been the administration itself that has given up continuing with the tender process in view of the fact that there were not going to be offers from candidate companies. «The construction companies want to work, but we need the numbers to be adequate to do the work with a minimum of benefit. Currently, the tenders are already coming out with very low prices, out of date in terms of the real cost of the materials, and that makes it impossible for companies to apply for these contests: this project may have been written months ago, or even more than a year ago, so it does not include what has happened with price inflation in the sector, ”the general secretary of the ACP, Violeta Aragón, explains to this newspaper. And it is that aluminum, steel or ceramics have become significantly more expensive since the middle of last year due to the global supply crisis, a trend that has been further aggravated since the Russian invasion of Ukraine. Thus, between January 2021 and March 2022, the cost of energy has risen by around 100%, aluminum by 60%, bituminous materials by 59%, steel materials by 55% and copper by 38%. , according to the National Association of Builders (ANCI). All this has led to an 8% increase in the cost of building works and up to 30% in civil works fields such as roads. The list of public works that have been abandoned in the province of Malaga includes various administrations, although in 80% of cases they correspond to actions tendered by municipalities of the province. The town halls of Ronda, Sierra de Yeguas, Antequera, Vélez-Málaga, Álora, Fuengirola, Istán, Salares, Carratraca, Nerja, Guaro, Málaga or Benalmádena appear in the list compiled by the ACP, some with only one work in this situation and others up to three. By amount, some actions in the so-called Parque de la Loma de Fuengirola stand out for an amount of 1.9 million euros, the coverage of the track of the El Maulí sports center in Antequera (1.5 million) or the works of 11 VPO in Nerja ( 1.06 million). Among the cases of withdrawal are actions by the municipalities of Casarabonela, Alhaurín el Grande and Cuevas Bajas. The most significant is that of Alhaurín, with a project for the execution of a new occupational center worth 4.2 million euros. The Junta de Andalucía has also experienced this situation with two works, one related to Justice (improving the energy efficiency of one of its headquarters) and another to the Ministry of Agriculture (the reform of the Infoca sub-center in Yunquera). As for the central administration, there are six works that have not been able to be carried out in Malaga for the moment due to a lack of candidate companies. Among them are an action by Adif for a value of 2.4 million euros for works in the Pizarra and Aljaima (Cártama) stations and two by Aena for the adaptation of hangars at the airport for a combined amount of almost 450,000 euros. Companies “suffocated” The ACP affirms that this dynamic of works that remain deserted will continue in the coming months, unless the administrations decide to update the prices of their tenders. Meanwhile, the companies that are dedicated to this segment of activity see losing business opportunities, but they assume that they cannot work at a loss. «Public works are suffocated in the province of Malaga. There are companies that have signed contracts and, with the rise in materials, they are carrying out the work, actually losing money. And a company can only do that for a very limited time because in the end it is a situation that leads to bankruptcy. We are really really worried,” says Aragón. The builders also describe as a “disaster and fiasco” the decree that the Government approved a few months ago, which allowed the town councils to carry out an extraordinary price review in contracting when the increase in the cost of materials justified it. The ACP recalls, in the first place, that it is only applicable to works awarded and already in progress, but ensures that, in any case, many municipalities are not applying its guidelines. “We do not know of a single company whose contract has been reviewed and has been compensated for the rise in prices in recent months,” he says. The issue has also become entangled at the administrative level, since the Junta de Andalucía tried to adapt the decree at the regional level by expanding its coverage, but it has been called to chapter by the Secretary of State for Territorial Policy, which could file an appeal for unconstitutionality . Source: La Opinion de Málaga. Article Link Author: José Vicente Rodríguez 09 19 22