Efforts to improve or expand facilities like Cristòfol Colom in Xixona, Pla de Barraques in El Campello, or Virgen de la Salud in Elda, along with expansions to medical consulting spaces such as that in San Fulgencio, and even new meeting rooms at places including Concepcion Aleixandre and the Sant Joan campus of Miguel Hernández University, illustrate ongoing public works across the region.
These examples reflect a broader trend of public project activity that was left unfinished last year in the province. Escalating construction costs and tendering that failed to reflect current prices meant many contractors chose not to bid on projects.
The situation could deteriorate further in the coming months after the central government ended a set of exceptional measures. Royal Decree Law 3/2022 allows builders to request adjustments for cost overruns caused by inflation from the Ukraine war and post-pandemic supply chain bottlenecks. This was highlighted this Wednesday by the Alicante State Public Works Federation, known as Fopa, which joined the National Construction Confederation in urging the Executive to extend, and strengthen, the measures already in place to address delays and widespread price volatility. Many applications remain registered and unresolved.
Francisco Javier Gisbert, president of Fopa, stressed that the core issue is price growth across materials such as steel, concrete, and labor, with overall operating costs rising by about 40% since 2021. Yet many increases have not been captured in public tenders that were drafted before the latest price hikes or did not reflect updated rates.
As the year progressed, awarding of new contracts slowed or stopped because the tender figures did not align with current costs. The goal, according to Gisbert, would be to update rates promptly, yet many administrations have not done so, which he finds baffling and unsatisfactory.
The reforms of the schools of Pla Barraques and El Vincle in El Campello have been abandoned.
Data provided by employers underscores the severity of the situation. For Valencia Community, Fopa reports that 2,617 works were tendered in the past year, with 830 abandoned, representing roughly 31.7%. By value, about 175 million of 1,053 million in total remained undecided, largely because smaller projects attract smaller firms with fewer resources to manage unforeseen cost overruns.
In the Alicante area, the tally of abandoned works reached 122, totaling 52.8 million euros. Gisbert notes the figure may be understated, since many projects are only listed as invalid on the Public Sector Contracting Platform when administrations declare them; some are not yet reflected on the platform. Two phases of post-transfer under the Júcar-Vinalopó arrangement account for more than 20 million euros of projects affected.
The City Council increased tenders awarded in 2022 to 125, while abandoned tenders rose to 10%.
Municipalities accounted for most of the activity, with 84 contracts worth 29.4 million euros. The Generalitat followed with 11 abandoned contracts worth 3.8 million, and other regional bodies also reported notable figures. Additional maintenance contracts cover the adaptation of public buildings, sports facilities, plumbing works, and even operating theatres. Some projects were forced to delay bidding due to a smaller pool of interested bidders, leaving funds from European and national sources unspent for now.
In this context, Fopa argues the only way to counter the ongoing “plague” is to extend the price-adjustment measures while expanding the allowed budget for price revisions. The current decree requires at least a 5% budget increase to enable cost revisions, a level business leaders say is particularly challenging for SMEs. Some argue for a higher cap, up to 20%, as the maximum revision possible under the current framework.
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The head of Fopa emphasizes that extending the measures is essential to stabilise the sector and restore confidence for future tenders. The debate centers on balancing fair cost compensation with the realities facing smaller firms, ensuring public projects can proceed without being trapped by outdated pricing structures and delayed procurement processes.