Almost 2,000 works are deserted in the last year due to the rise in prices of materials

The construction sector does not finish launching the bells on the fly despite the fever for housing in Spain and despite the fact that the General State Budgets presented yesterday by the Government for 2023 raise investment in infrastructure.

On the contrary, the employers of the sector warns that almost 1,939 public tenders have been deserted in the last year, for an amount of 882.6 million euros, due to the increase in prices and the lack of review mechanisms to adjust them.

Between January and September, the figure rises to 1,455 works

According to the analysis of the National Construction Confederation (CNC), the three Royal Decree-laws on price revisions approved by the Council of Ministers between March and August 2022 have not been effective in alleviating the price pressure that began with the collapse of the supply chain in a pandemic and has been accentuated by the war in Ukraine.

On the contrary, activity has been increasingly affected in recent months

The average amount of each deserted project is around 448,000 euros, "which shows that the problem is not only in large infrastructures but also in smaller works of autonomous communities and municipalities", according to Pedro Fernández-Alén, president of CNC.

This circumstance also explains why not only the large companies in the sector are being affected, but also, and above all, small and medium-sized construction companies.

"In 95% of works there is no price review and it affects, above all, SMEs", explained Fernández.

In the employers there is a "significant concern" about the lack of candidate offers in the tenders, because "that is usually a sign that there is a problem in the sector."

Historically it was difficult to find a deserted work, "in a normal year about 20 could remain", has specified Mariano Sanz, general secretary of the organization.

Therefore, the Confederation believes that the number of projects that are now being abandoned shows that the tenders continue without taking into account the extra cost of materials and do not include price review clauses.

"Many construction companies are being forced to work at a loss or, directly, to close down. These are problems that suffocate our companies and threaten the Recovery Plan. Either urgent solutions are adopted or companies will continue to die and jobs will be destroyed in a crucial sector for the execution of European funds", warned Fernández-Alén.

The employers consider "insufficient" the efforts of the central Executive to alleviate cost overruns while urging it to carry out a new Royal Decree Law on price review "more ambitious and free of conditions that does not discriminate against practically all works and incorporate the uncontrolled prices of energy and other materials, whose impact can represent 30% of the total cost overruns".

Catalonia, the most affected

The most affected autonomous community is Catalonia, where the number of deserted works has been 378, representing an economic volume of over 130 million.

By number of deserted tenders, it is followed by Castilla-La Mancha (226 works valued at 101 million), the Basque Country (168 deserted tenders with a hole of more than 62 million) and Andalusia and Castilla y León, both with 147 unfilled public contracts (for 105 and 56 million, respectively).

The largest amount of work that has been abandoned scales above 28 million and corresponds to the comprehensive rehabilitation of the old El Carmen hospital and its exterior urbanization in Ciudad Real.

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