Unfinished works, delayed delivered projects, resignations from contracts that lost even the deposit, abandoned calls…This is public business in the province of Alicante. at least there is Twenty projects affected by an investment of close to 30 million euros. The reason for this interruption, which affected more or less all regions of Alicante, 30% increase in the cost of projects due to the increase in the prices of construction materials –wood, steel and aluminum basically – it’s been happening since 2021. An aggravated condition in the last six months “Perfect storm” Due to the inflation caused by the war in Ukraine, the disproportionate cost of energy in Spain and the increase in transportation in the international arena.
The average utility of companies dedicated to public works is 4%. However, it’s a small margin that turns into a loss due to the difference between the budget the projects were given last year and the current market value. It is even a situation that compels construction companies to give up the guarantee or deposit deposited in different Public Administrations. “In these cases, the dilemma we face is losing 3% or 5% of the project or having to shut down the company because a 30% cost overrun is absolutely unaffordable in an industry like ours, and it has such a small benefit. ”, explains Javier Gisbert, president of FOPA, Alicante State Public Works Federation.
exactly in the city Alicante At least a dozen public works sponsored by the City Council were paralyzed or delayed. One of the most striking cases impacts Lo Morant park, which is full of ditches due to half a year of interrupted work. The bipartisan government, made up of PP and Ciudadanos, chose to terminate the contract with the company that received the space refurbishment project last April, because they had completed only 2% of the planned work during the agreed four-month execution period.
Just enough to lift a few trucks filled with rubble, leaving dozens of open ditches, with the remnants of the sidewalks separating the lawn and walkways. In this context, the City Council has announced that the company, which was “on the run” due to the increase in material prices, has withdrawn from the contract and is now planning to finish what is left to renovate the infrastructure and improvement landscaping, to which another 340,000 euros will be allocated. Currently there are no merchants, but the process of hiring a new one is in progress.
Another situation is the situation of the municipal market. carolinas. The reform work will take five months after the government team accepted the company’s request, which should have finished by now, citing delays in the delivery of some materials due to the current crisis in the construction industry.
“With all these negativities, studies were carried out according to the delivery times of different materials, which took more than three months in the case of ceramic coating of the facade. In the case of the aluminum supply, the delay has been four months and the roofing material has not been fielded yet,” according to the document where the duo confirmed the extension. This project started in November with a six-month maturity and a budget of 327,000 euros.
As for the bike lane and the walking path to the beach cityova, was already selected by the firm, but he resigned due to prices and we had to make a new project. one of the podium companies tossal He also resigned because of the prices.
Price revisions are also continuous due to the situation. This week, several projects that have been changed because of this have passed the Board of Directors. A total of seven with European funds and affects urban development actions. Sargento Vaíllo streets, Seville, San Antonio and Músico Tordera squares, Jijona street, Campos Vasallo and Marqués de Molins.
In Upper and Central Vinalopó, as municipalities Petrer, Villena, Aspe and Elda due to the same problem, they find some uninitiated and some unfinished projects paralyzed. The most serious case occurred in Elda after Sigma Infraestructuras entered preliminary competition with creditors, which had successfully submitted bids for the redevelopment of Calle Ramón Gorge and the reform of Plaça Joan Miró and Jardín de la Música. The City Council has already started the process to resolve the three contracts worth around 2m euros. But this week, another La Nucía-based construction company announced that after signing a 1,829,288-euro contract, Alfonso XIII gave up the urbanization of Olympic and Philippines streets, even losing its 5% guarantee.
Star project in the l’Alacantí region xixonaThe closed pavilion, whose budget was determined as 4 million, was blocked after the tender was abandoned due to the increase in material prices, upon the request of the two companies that went out to bid for a price update. Inside El Campello the one million euro investment in paving the streets is also blocked if the successful bidder requests a review; and mutxamel The City Council reactivated the 4.4 million tender for the fourth school, after confirming to the Ministry of Education that the budget could be revised later on to the new prices.
San Vicente del Raspeig The most important work of this mandate, the 7.3 million euro sports pavilion, is currently paralyzed. UTE requested a price review last summer and work has been halted since November. The company Sigma Infraestructuras SL, which is expected to reform Casal de la Festa, will no longer take the action when creditors enter pre-bankruptcy proceedings. Aitana, the winner of the second-stage redevelopment of the Social Center Auditorium, has also requested a price review and has not signed the contract for the time being.
On the other hand, Pavasal, who won the tender for the asphalting of the streets of San Vicente and requested the suspension of the contract and the price review, takes the action with the commitment that the review will be done when it is finished. is based on a ministerial decree of the Central government which approved measures allowing an exceptional review of the prices of public works contracts affected by the rise in material prices.
Inside alcohol the same problem delayed the renovation work of the Andreu Sempere institute indefinitely. The City Council, under the Edificant Plan, awarded the tender to €3.72m in December 2021, but the adjusted amount meant that no bids were submitted to run the work. He promised to increase the financial endowment of the project, which would allow for the inclusion of unforeseen actions such as education, gymnasium and sports fields. But still pending. Also, the devolution of the Generalitat in the Municipal Assembly will have to go through the general assembly meeting in order for the municipal administration to carry out the work.
Another action changed by the increase in the cost of materials is the comprehensive reform of the Plaza de la Iglesia de. ibis. The initial budget was 1,380,000 Euros, of which 1,051,000 came from European funds. However, the increase in the price of concrete meant that no bids were made here either. The works, which were finally awarded for 1,987,000 euros after the bidding process was repeated, are expected to start soon, although they have not started yet.
Of all the works awarded by the City Council elche none of them had to be paralyzed by the rise in prices due to inflation. However, Mixed company Aigues d’Elx is negotiating with the contracting company for Cartagena Avenue’s drinking water and sewerage network. altet, Deciding to start or resign as raw material costs are increasing rapidly.
Inside Almorad Some contracts become invalid because the budgets do not include the current price increase. Although the works could continue between January and April, there were delays due to problems in the supply of materials.
The small public works carried out in Torrevieja, a school, were not paralyzed. Concessionaire for the conversion of the port area Torrevieja continued the planning of the works with the construction of a new fish market and the rehabilitation of the Customs building as pre-construction actions of six hotels, multiplexes and bowling buildings, despite the 30% increase in the cost of the work. As Empresas del Sol, a firm that won the concession granted by the Generalitat, points out. The cost of this project exceeds 18 million euros.
INFORMATION PREPARED BY JUANI HERNANDEZ, JA RICO, VICTORIA MORA, ANTONIO TERUEL, LORETO MÁRMOL, DAVID PAMIES AND ANA FAJARDO