The lack of price review mechanisms, in a context of strong inflation and volatility in construction materials, continues to hinder public works in Spain. The National Construction Confederation (CNC) has recorded at least 318 deserted tenders in the first quarter of this year, which correspond to a volume of work of almost 190 million euros. The employers’ association of the construction companies denounces that this situation mainly affects autonomous communities and town halls, jeopardizes many SMEs financially and puts part of the European recovery funds at risk.
“Many of the works financed by the Next Generation funds belong to the regional and local sphere, and have not been able to start due to the lack of sensitivity of city councils and communities,” summarizes the president of the CNC, Pedro Fernández-Alén. That is why he urges the Government, “especially through the Ministry of Finance”, to “solve the problem of prices as soon as possible, since otherwise the execution of the funds would be compromised and job creation would also be slowed down”. .
The problem, according to the employer, stems both from the lack of an “agile” price review system —a claim that has been dragging on for a long time and affects works with longer execution periods— as well as from the drafting of tenders with prices that are not updated. And, although they come from all the Administrations (in fact, last March the Government avoided extending the exceptional price review system that had been put in place when this situation was detected), the builders focus above all on the smallest ones, that use negative administrative silence (the lack of response from the Administration is equivalent to a no) when they are asked to review the bidding amounts. “We are appreciating more and more deserted works in communities and town halls,” insists Fernández-Alén.
The data collected by the organization in the first semester shows a very widespread problem, although it has not been possible to obtain data from three communities (Cantabria, Murcia and Navarra). Among all the others, there are at least 318 deserted tenders worth 189.1 million euros. In other words, these are works that on average have a budget close to 595,000 euros. But there are them for higher or lower amounts: the majority, 254 contracts, did not reach half a million; while 34 exceeded the value of one million euros. The remaining 30 fell between those two numbers.
62 deserted contests in the Canary Islands
The Canary Islands is the community where the most works that have not been awarded have been identified: 62, with a value of 13.3 million euros. However, there are four territories that exceed the volume of the archipelago in amount. The first is Extremadura which, with 17 deserted tenders, totals 84.6 million. But it must be borne in mind that in a single project, that of the transfer between the river basins of Pizarroso, Alcollarín and Búrdalo — a job that would be carried out in four municipalities of the province of Cáceres, which put out to tender the last January the Ministry of Ecological Transition and did not receive an offer—74.4 million are computed, according to data collected by the CNC.
The community with the second largest volume of work to start is Andalucía, with 24.8 million. And the third is Castilla y León, which in 35 works totals 15.2 million. Behind the Canary Islands, but above 10 million, is also Madrid. And between the five and 10 million would be Catalonia, the Balearic Islands, Galicia and the Basque Country. The rest, with the exception of the three autonomies for which there is no data, are below five million. In Castilla-La Mancha, for example, only three unsuccessful contests have been identified that represent something less than 225,000 euros.
Taken together, these are figures very similar to those of last year: the employers estimate that in the first quarter of 2022, 388 tenders for almost 230 million were abandoned. The difference, they consider, can be explained by the lack of data from three territories in the data for January, February and March of this year. For this reason, they insist on the employer’s association on the need “for a mechanism for the economic rebalancing of public contracts that is stable over time and for a modification of the Law on Public Sector Contracts.” It is a claim that they have been making for months. The Government modified that norm this month, by means of an amendment to another law, to favor the revision of prices. Although the change mainly affects service contracts and it is still not binding, as requested by the CNC, for all Administrations to incorporate price review mechanisms in their works contracts.
Follow all the information on Economy and Business on Facebook and Twitteror in our weekly newsletter
Five Days agenda
The most important economic appointments of the day, with the keys and the context to understand their scope.
RECEIPT IN TU CORREO
Subscribe to continue reading
Read without limits