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40 deserted public works in TGN

The galloping inflation, which in March stood at 10.5% in Tarragona, a historical record, has an impact on public works. Since last year, the tenders that have been deserted have skyrocketed. Between 2021 and so far in 2022, a total of 40 projects have not found suitable companies and suitable offers to be carried out, largely due to rising prices.

The increase in costs, especially materials, and the non-review of rates, has made many works unattractive for builders. According to the accounting of the Chamber of Contractistes de Catalunya, last year 35 works were deserted in the province and in the first months of this 2022 there are already five accumulated. “These are figures that are an anomaly, exceptional, they are not normal at all,” explains Joaquim Llansó, president of the Chamber of Contractistes. Thus, during the past year the value of those projects that remained pending shot up to 5.7 million and in this 2022 the figure is already 1.5 million. In total, there are more than seven million works that have had some impact, regardless of whether they have been able to be put out to tender later.

There are a good number of smaller projects but also some with larger amounts, which even reach millionaires. The list of the Chamber includes, for example, the works for the executive project of an infant and primary education center in Vallmoll (Alt Camp), worth almost two million, improvements in a treatment plant in Reus (1.2 million) or rescue booths and other infrastructures on La Pineda beach for almost 800,000 euros. «A work, for example, of one million euros, is always very appetizing and attractive for a company, because it means perhaps working for a whole year, or more. And the fact that projects like this remain without bidding already says a lot about the situation, because it means that, even taking risks, companies are not willing to take them on”, explains Llansó.

The list is long, although other unforeseen factors may have occurred and always bearing in mind that the works have been put out to tender more times later until they end up being executed. Sports facilities, repairs to buildings or improvements to stations are some of those investments that have been left without a builder, something that mainly affects city councils but also the central administration (interventions in the Corridor) or organizations of the Generalitat such as the Institut Català de the health. There has also been an impact, for example, on reconstruction projects after the damage caused by storm Gloria, in towns such as Arnes (Terra Alta).

Increased cost of materials

“When a construction site is deserted, you already lose four or five months”, explains Llansó, who adds: “Last year we had 262 deserted construction sites in Catalonia, when the normal thing is that there are 15, 20 or 30, at most. Projects are coming out, especially since the second half of last year, with prices that are two or three years old». One of the keys is the increase in the cost of materials, which in some cases have skyrocketed by more than 80%. “A road carries asphalt product, a building such as an industrial warehouse has a metallic structure that has been fired,” adds Llansó.

In its latest report, referring to the first quarter of 2022, the Chamber denounces that “the war between Russia and Ukraine is further aggravating the crisis of shortages and the increase in prices of materials that began as a result of the pandemic.” The union speaks that the situation “is pushing companies to the limit” and means that “many tenders are deserted due to the lack of mechanisms” to adapt the work to reality. The study adds that “materials such as iron, nickel, aluminum or wood have experienced sharp increases in prices and energy costs have skyrocketed to unaffordable levels for some companies.”

Companies make numbers and they don’t add up. “If you are missing 5 or 6%, you can apply because it is a relatively small margin that you can assume, even if it is being a risk. But if you’re missing 25 or 30%, as is happening, you don’t do it. You just don’t jump into the pool because, directly, there is no water. The situation is uncertain and unstable. For example, there are suppliers that cannot give you prices because they do not know when the material will arrive. All of this determines”, specifies Llansó.

Reviews and delays

The administration also regrets the appearance of these obstacles, which are a headache in daily procedures. The town halls come up against an ever-increasing trail of desert competitions as they are financially undersized. Where before there were numerous companies, now only a few, or none, come. All this forces a new review of the technical projects and causes an inevitable delay.

The Government has approved two royal decree-laws that allow, in theory, that the prices of public works tenders can be updated to reflect the inflation that weighs down the economy. These regulatory changes open the door to exceptional price revisions, proving that the increase in the amounts is greater than 5%, as long as the amount of the update does not exceed 20% of the award price in the 2021 works.

The Chamber values ​​these measures as “positive”, despite acknowledging that “they have very limited effects”. Joaquim Llansó adds: “We are asking for a price revision formula for the new works that are currently being awarded and that have rates from two or three years ago and that, obviously, do not adjust to reality. We ask that all projects be able to have reviewable amounts, including an unrestricted review formula. We’re just talking about applying that review automatically, something that can be put in place within 24 hours.”

Llansó warns of how this situation “could affect all the works that will come from European funds”, something that the Cambra itself has an impact on: “We are concerned that the rise in prices and supply problems will become chronic and endanger the of projects promoted in the EU under the financing of the Next Generation funds».

Delayed reforms

Deserted tenders generate a delay in the projects until the works are reviewed and they go out to tender again. According to the list of the Chamber of Contractistes, these delays have affected, for example, the field of health, in the reform works of the CAP of Batea (Terra Alta), but also sports facilities.

Municipal swimming pools in Riudecanyes or Salou, covered paddle tennis courts, improvements to the artificial turf of soccer fields, maintenance of green areas and gardening or interventions in sewage treatment plants are also part of those works that did not find a builder, at least at first . In some cases, they have been re-tendered and executed.

The works to improve the Vilar sports pavilion, in Valls, were also deserted because no proposal was submitted and the process had to be restarted. In 2022, a refurbishment project in the Civic Center of Ascó of more than 400,000 euros, works of the guingueta in the Camp de Mart of Tarragona or renovation of the drinking water network in Benissanet have not been put out to tender.

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