Catalan contractors urge to review prices to avoid company closures

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The president of the Chamber of Works Contractors of Catalonia, Lluís Moreno, urges the administrations to review the prices of the tenders to avoid them being deserted and the bankruptcy of companies, as well as to take advantage of the impulse of the electoral cycle and the European funds.

In an interview with EFE, Moreno, who was elected the new president of this chamber last July, has warned of the difficult situation that many companies in the sector are going through, especially SMEs, because the rise in costs is putting in check its viability, precisely at a time when everything is ready for a rebound in construction activity.

“Many companies have a staggering treasury. They are facing a significant loss of assets because they have paid more to their industrialists than they had expected due to the increase in the costs of the works and they have eaten the expected benefit. And also they cannot present themselves to tenders due to the tight prices. It must be taken seriously”, he underlined.

At this point, he has warned of the risk that they will enter “in an escalation of bankruptcy filings” in the coming months.

The rise in costs in construction discourages companies from submitting to public tenders and already in 2021 it left some 300 contests deserted, to which another 107 were added until July and some 12 or 13 more this August, according to the most updated data managed by the Chamber of Construction Contractors of Catalonia (CCOC).

In addition, the tenders in which only one or two proposals are presented have multiplied, and in two cases the second tender has also been deserted.

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“The economy is doing well. It’s not bad, but we have skyrocketing inflation and that is what we have to know how to manage,” said Moreno, who represents the interest of its 85 associated companies, which manage 80% of the tender and the work public, and a good part of the private construction or infrastructure bidding.

Moreno warns that the high prices and the slowness with which the administrations face their review threaten to ruin the potential growth of the sector, which is already feeling the impulse of contracting of the Next (LON: NXT ) Generation funds and the electoral cycle which will start this spring.

Along these lines, he has insisted that there is “a good moment for public bidding, but it is out of adjustment”, since “a lot of bidding keeps prices at the level of two years ago”, with real costs up to 20% higher.

“This 2023 is crucial. We are facing a cycle of tenders, to which are added the Next Generation and the need to give a boost to large infrastructures. We must take advantage of the opportunities now,” he stressed.

After the Ministry of Transport, Mobility and Urban Agenda modified its decree on prices twice to respond to the demands of the sector, the CCOC is now urging the Generalitat to also rectify its rule so that all Catalan town halls automatically adhere to the revision of prices for minor works, which range from 4 months to two years.

The president of the organization that represents construction contractors regrets that the Government has chosen to transfer the decision to adhere to the price review to local institutions, because that means losing a significant volume of works.

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