Electricity prices surged by 178 percent, iron and steel materials by 50 percent, ceramics by 40 percent, copper by 20 percent, wood by 17 percent, and aluminum by 55 percent. These relentless price hikes, now estimated to average around 30 percent, have drawn sharp condemnation from the National Confederation of Construction. Across the board, government action to reform public works pricing has been notably absent, leaving many projects exposed to volatile costs.
In an effort spearheaded by the Ministry of Transport, Mobility and Urban Agenda, the Executive introduced two Royal Decree Acts intended to enable price revisions for public contracts. Yet interpretations advanced by the Ministry of Finance have limited this mechanism, with roughly 90 to 95 percent of ongoing work deemed ineligible for price revision. Only specific sectors such as railway and hydraulic infrastructures, highways, and certain industrial buildings retain some revision possibilities.
One of the most debated aspects of Royal Decree Act 6/2022 concerns when contract awards may be revised. The Ministry of Finance has clarified that studies must be in the processed state within the calendar year 2021 and completed after the decree’s publication. This interpretation has sparked controversy and stirred internal consultation within the CNC. The rules exclude contracts that began after 2021 or finished before the decree’s issuance, and exclude those with execution periods under 15 months, a category that construction employers say accounts for about eighty percent of existing contracts. In 2021, Spain saw 6,679 tendered works, of which 5,307 carried durations shorter than 12 months.
The association notes that the priority is given to contracts experiencing delays and those that incur extra costs due to late execution. They argue that the new regulations have only aggravated project delays, increased the risk of project abandonment, slowed the industry, and pushed smaller regional construction firms toward the brink of closure. Additionally, there is criticism of governmental silence, as many firms seeking to invoke price revision reports have not received timely responses to their enforcement requests.
Autonomous Communities, local authorities, and the central government remain at odds on this issue. Some municipalities refuse to enforce the Royal Decree, while others have relaxed conditions. Regions such as Galicia, Andalusia, Extremadura, Murcia, the Community of Valencia, Catalonia, and Aragon show a spectrum of approaches. In Galicia, Extremadura, and Andalusia, bilateral processes with the managing authority are underway as flexibility faces legal challenges from the Constitutional Court.
The National Construction Confederation has urged the Ministry of Transport to issue a third decree that would raise the maximum compensation from 20 percent to 50 percent of the contract signing value and account for price increases on all work started after January 1, 2021. This adjustment, CNC argues, would align compensation with actual market conditions and would be applicable as local organizations implement the policy across energy-related projects.