This article discusses concerns from Alicante builders about a rising problem of abandoned auctions following the government’s decision not to extend measures established in last year’s Royal Decree Act 3/2022. That decree granted compensation for cost overruns in awarded projects caused by higher material costs driven by the Ukraine conflict and postpandemic supply chain disruptions. Builders describe the decision as a mistake that could jeopardize European funds and projects tendered after March 2, when the decree expired.
Javier Gisbert, president of the Alicante State Public Works Federation (FOPA), notes that raw material and energy markets remain volatile with price spikes that strain budgets and planning. He advocates a system of public contract rebalancing to ensure project viability and the survival of companies. He argues that issuing a new decree with suitable revisions is the prudent course to prevent future disruptions.
According to the state employers association, last year more than 2,000 tenders were canceled across Spain because bids did not reflect current market prices, totaling nearly 1 billion euros. A portion of these cancellations relates to investments tied to the Recovery, Transformation and Resilience Plan.
Arrangement Plan
FOPA highlights a special risk in tenders linked to the Arrangement Plan for the Ministry of Education construction and the reform of training centers from the Valencian Generalitat. Gisbert points out that this challenge is felt in the Alicante province across projects from various municipalities and from supra-municipal administrations. He adds that if price rises persist, projects already started may not reach completion as planned.
The renovations of the Pla Barraques and El Vincle schools in El Campello have faced abandonment.
FOPA notes that prices for materials such as steel, copper, and aluminum continue to pressure finishing budgets. Gisbert states that without new price review measures in another document, the government must implement concrete steps to safeguard offers. The aim is to ensure that companies do not incur losses after March 2.
Local Tender Activity and Policy Demands
The City Council reported an uptick in tenders awarded in 2022 to 125, while abandoned tenders stood at 10 percent. In response, Alicante employers have joined with the National Confederation of Construction to urge the Spanish Government to extend the Royal Decree and to soften access restrictions to price inspections. They argue that the budget provisions for the decree should allow a price review to rise by at least 5 percent, which they say is less burdensome for small and medium-sized enterprises, whereas the current cap could exceed 20 percent in some review scenarios. [Attribution: FOPA data and statements]
Industry representatives emphasize that maintaining predictable pricing signals is essential for contract viability. The absence of timely updates can lead to irreversible schedule delays, reduced competition, and greater risk of losses for stakeholders across the construction sector in the region. [Attribution: Alicante economic chamber briefing]