The region has seen efforts to enlarge and modernize several public facilities, including Cristòfol Colom in Xixona, Pla de Barraques in El Campello, and Virgen de la Salud in Elda, along with expansions to medical consultancies such as that of San Fulgencio, and the creation of new meeting spaces in airport zones and buildings like Concepcion Aleixandre and the Sant Joan campus of Miguel Hernández University.
These are just a few examples that illustrate the ongoing pattern of public works and the lingering challenge of unemployment in the sector last year. Construction costs rose while tender prices were not updated, leading to a lack of bids from interested companies.
This situation could worsen in the coming months after the central government’s decision to end the exceptional measures. Royal Decree Law 3/2022 allowed builders to request adjustments for overruns caused by inflation driven by the war in Ukraine and post-pandemic supply-chain bottlenecks. The Alicante State Public Works Federation (Fopa) joined the National Construction Confederation in urging the Executive to not only extend those measures but to strengthen them in light of persistent problems and delays, supporting applicants who were already registered in their submissions.
Francisco Javier Gisbert, president of Fopa, emphasized that the core problem lies in the higher prices faced by almost every material used in these projects—from steel to concrete to labor—and that operating costs rose by about 40 percent since 2021. Yet, many of these increases were not reflected in public tenders that had been issued before the price hikes or were based on outdated figures.
As the year progressed, new contracts were scarce because the figures did not align with actual costs, and tender participation dwindled. “Updating prices is the logical step, but many administrations have not done so, and some still do not,” Gisbert asserted.
The reforms planned for the Pla Barraques and El Vincle schools in El Campello have been abandoned. Data from employers underlines the gravity of the situation. Fopa reports that 2,617 works were tendered in the Community of Valencia during the past year, and 830 were abandoned, about 31.7 percent. By value, 175 million euros out of a total of 1,053 million remained undecided, often because the smaller projects are pursued by smaller firms with more limited resources to handle unforeseen overruns.
In Alicante, the list of abandoned works tallies 122 projects totaling 52.8 million euros. Gisbert notes that the real situation is even bleaker because the business community’s report captures only projects officially deemed invalid through the Public Sector Contracting Platform. Some projects are not yet listed, meaning the responsible authorities have not informed the platform. The Júcar-Vinalopó post-transfer phase accounts for more than 20 million euros in unresolved projects.
The City Council increased tender activity in 2022, awarding 125 contracts, while the share of abandoned tenders rose to 10 percent. The administration, predominantly composed of town halls, has the largest portfolio of projects, with 84 tenders worth 29.4 million euros. The Generalitat accounted for 11 abandoned tenders worth 3.8 million; the Committee had eight projects totaling 1.6 million; HE Situation Add eight more with 1.3 million; regional, supra-municipal bodies registered six contracts worth 6.2 million; and universities completed five works for 9.9 million.
Beyond those, many maintenance contracts covered the adaptation of public buildings, sports facilities, plumbing works, and even operating theatres. Some projects had to return to tender due to a lack of bidders, and funds such as European money remain unspent because of the pause in projects and unclear procurement timelines.
One directive that has drawn heavy attention is to extend the price-adjustment measures. The head of Fopa argues that this extension must also include a boost to the budget permitted under the decree to enable a minimum 5 percent uplift that would allow price revision. Business leaders contend that this 5 percent floor is particularly harsh for small and medium-sized enterprises, while a higher ceiling of up to 20 percent could be more workable for the review process. These views reflect broad concern across the sector about the balance between stabilizing costs and sustaining small firms in the regional economy (Fopa, cited in industry reports).