Unfinished works, delayed project deliveries, contract resignations that forfeited even the deposit, and calls left unanswered — these are now routine in public business across Alicante province. The tally shows at least twenty projects affected by an investment approaching 30 million euros. The disruption traces back to a surge in construction costs since 2021, driven largely by higher prices for timber, steel, and aluminum. The recent six months have intensified the strain into what experts are calling a perfect storm: inflation fueled by the Ukraine conflict, soaring energy costs in Spain, and higher transportation prices on the global stage.
The typical profit margin for public works firms hovers around 4 percent. Yet with budgets set last year and market prices today, that margin can flip into a loss. Some construction outfits have even offered to return guarantees or deposits posted with public administrations. As Javier Gisbert, president of the Alicante State Public Works Federation (FOPA), notes, firms face a grim choice: absorb a 3 to 5 percent hit on a project or shut down when a 30 percent cost overrun is simply unaffordable for an industry with slim returns.
In Alicante city itself, a dozen public works sponsored by the City Council have been stalled or slowed. A stark example is Lo Morant park, where ongoing trenches and disrupted work mar the landscape after nearly six months of interruptions. The governing coalition, formed by PP and Ciudadanos, opted to terminate the contract with the firm commissioned for space refurbishment last April after that contractor had completed only about 2 percent of the planned work within a four-month window.
What remains visible are a few overturned trucks and piles of rubble, with sidewalks severed from grass and pathways. The City Council announced that the company, increasingly unable to cope with material price hikes, has withdrawn from the contract and that the municipality will complete the remaining work to restore infrastructure and landscaping, with an additional 340,000 euros earmarked. There is currently no selected supplier, though the process to hire a replacement is underway.
The municipal market at the Carretero area faces a similar fate. The reform work there is projected to take five months after the government team approved the contractor’s request, citing delays in material deliveries caused by the broader crisis in the construction sector.
Documentation shows delivery-time studies for various materials indicating substantial delays: more than three months for ceramic facade coatings, four months for aluminum supplies, and unavailability of roofing materials. The project, which began in November with a six-month deadline and a budget of 327,000 euros, has felt the pressure of price volatility.
The planned bike lane and beachfront pedestrian path in city areas were affected as well. A previously chosen contractor withdrew due to price pressures, forcing a new design. Several other firms, including one from Tossal, also pulled out for similar reasons.
Price revisions continue to ripple through the portfolio. This week the board approved amendments to seven European-funded urban development projects, including Sargento Vaíllo streets, Seville, San Antonio and Músico Tordera squares, Jijona street, Campos Vasallo, and Marqués de Molins. In the Upper and Central Vinalopó region, municipalities such as Petrer, Villena, Aspe and Elda face stalled and uninitiated works for the same reason. Elda’s situation grew more acute after a local firm, Sigma Infraestructuras, entered preliminary creditor talks while bids were active for the Ramon Gorge redevelopment and the Plaça Joan Miró and Jardín de la Música projects. The council has started steps to resolve three contracts worth about 2 million euros. Separately, a La Nucía-based company abandoned an 1,829,288-euro contract for urbanizing Olympic and Philippines streets, even forfeiting a 5 percent guarantee.
In the l’Alacantí region, the village of Xixona faced a stalled closed pavilion project with a four-million-euro budget after bidders requested a price update. Within El Campello, a one-million-euro paving initiative faced delays if the winning bidder sought a revision; Mutxamel’s City Council has reactivated a 4.4-million tender for the fourth school, preserving room for later price adjustments approved by the Ministry of Education.
San Vicente del Raspeig saw the mandate’s flagship project, a 7.3-million-euro sports pavilion, hover at a standstill. UTE called for a price review last summer, and work has paused since November. Sigma Infraestructuras SL, tied to plans to renovate the Casal de la Festa, will not proceed while creditors pursue pre-bankruptcy actions. Aitana, the winner of the second-stage Social Center Auditorium redevelopment, has similarly requested a price review and has not signed a contract to move forward.
Pavasal, the contractor for the San Vicente street resurfacing, requested a contract suspension and a price review, with assurances that the review will occur upon completion. The government’s central decree allows for an exceptional price review of public works contracts impacted by material-cost increases.
In El Alcolar area, the Andreu Sempere Institute renovation has been delayed. The Edificant Plan had awarded a 3.72-million-euro bid in December 2021, but the revised budget left no bidders willing to take on the project. The city anticipates adding funds to cover unforeseen actions such as education space, a gym, and sports facilities, but this remains pending. The Generalitat’s share in the municipal assembly will need formal approval before the city can proceed with the work.
The comprehensive Plaza de la Iglesia de the region underwent another price-driven revision after a concrete-price surge. The initial budget stood at 1,380,000 euros, with European funds contributing 1,051,000 euros. Re-bid results led to an award of 1,987,000 euros, and construction is expected to begin soon, though not started yet.
Across Elche, not one project has been paralyzed solely due to inflation-induced price hikes. Still, Aigues d’Elx is negotiating with its contractor over the Cartagena Avenue water and sewerage network, and the city faces a decision on whether to proceed or pause as raw material costs continue to rise.
In Almoradí, several contracts are at risk because budgets did not anticipate the updated prices. Although work might resume between January and April, delays have arisen from material supply problems.
Torrevieja has kept up with smaller public works, including a school project. The port-area redevelopment and the construction of a new fish market, along with the rehabilitation of the Customs building, continued as pre-construction efforts for several hotel, cinema, and entertainment projects, despite a 30 percent rise in project costs. The Generalitat-supported concession holder, Empresas del Sol, notes the overall project cost surpasses 18 million euros.
In summary, across the Alicante region the trend is clear: inflation and material-price volatility are shaping project outcomes, forcing revisions, delays, and occasionally terminations. The shift reflects broader market dynamics and underscores the challenges public works agencies face in maintaining momentum amid global price shocks.