Public works and budget pressures in Alicante, Valencia, and beyond
Projects to enhance or expand facilities in the region include Cristòfol Colom in Xixona, Pla de Barraques in El Campello, and Virgen de la Salud in Elda; extensions for medical consultants like the one in San Fulgencio; and new meeting spaces including those near Concepción Aleixandre and the Sant Joan campus of Miguel Hernández University. These examples illustrate ongoing public works across the province and the challenges that have left some tasks unfinished, as rising construction costs and stagnant tender prices deter bids from companies.
The situation could deteriorate as the central government ends temporary measures that previously eased cost overruns. Royal Decree Law 3/2022 allowed builders to request adjustments for overages caused by inflation from the war in Ukraine and post-pandemic supply bottlenecks. Industry groups, including the Alicante State Public Works Federation (Fopa) and the National Construction Confederation, pressed the Executive to both extend and strengthen these measures in light of persistent delays and widespread price increases, while registrations for applications remained uneven. The concerns are echoed by professionals and industry bodies who track the flow of tenders and contracts.
Francisco Javier Gisbert, president of Fopa, emphasizes that the core issue is the surge in material costs—from steel to concrete to labor—that have pushed operating expenses up by roughly forty percent since 2021. When public tenders do not reflect these new costs, the resulting bids rarely align with the actual project budgets. This mismatch often leaves projects stalled or abandoned as numbers fail to reconcile with evolving market prices.
As contracts waned, there were fewer awards, with many tenders returning nonviable or incomplete bids. The logical remedy, according to Gisbert, is timely price updates. Yet a number of administrations have not updated tender prices, and some still fail to reflect current costs. This reluctance to adjust pricing is a recurring grievance among industry actors who fear further project deferrals and cost overruns.
The reforms affecting Pla Barraques and El Vincle in El Campello have not progressed, illustrating the broader stagnation in the sector. Data from employers shows the severity of the problem. In the Community of Valencia, 2,617 works were tendered in the past year, but 830 were abandoned, representing 31.7 percent in practical terms. Abandoned projects account for roughly 17 percent by value, meaning around 175 million euros out of 1,053 million were left undecided, largely affecting smaller projects that smaller companies struggle to sustain amid volatility in costs.
In Alicante, the tally reached 122 abandoned works with a total value of 52.8 million euros. Gisbert notes that the reported figure may understate the real level of trouble because many projects are not yet formally declared invalid on the Public Sector Contracting Platform. Some projects, including those related to the Júcar-Vinalopó transfer, total more than twenty million euros in uncertainty and delay.
The City Council reported a rise in tender activity in 2022, awarding 125 contracts, while 10 percent of tenders were abandoned. The breakdown shows municipalities accounted for the largest share of awards, with 84 contracts worth 29.4 million euros, followed by Generalitat with 11 abandoned projects worth 3.8 million, and various other bodies contributing smaller shares. Maintenance contracts in public buildings, sports facilities, plumbing work, and operating theatres were also delayed due to a shortage of bidders. This pattern has left some funds from the EU and national sources unspent, underscoring the breadth of the funding and execution gap across the region.
The head of Fopa argues that extending the cost-overrun measures is essential to stopping what he calls a figurative plague within the sector. He recommends increasing the decree budget by at least five percent to allow meaningful price revisions, with a maximum cap around twenty percent for the price adjustments. This approach, he says, would provide relief to small and medium-sized enterprises that bear a disproportionate burden during volatility in material costs and labor markets.
Overall, the picture is one of a sector trying to adapt to a rapidly changing cost landscape and a public sector slow to align tender values with real-world expenses. The path forward involves updating price bases more frequently, streamlining tender processes for smaller firms, and ensuring that ongoing public works projects can proceed without the risk of perpetual delays or sudden cost overruns. [Fopa reports and subsequent industry commentary]
Note: Information reflects the perspectives of the Alicante State Public Works Federation and related industry groups as they monitor tender activity, project cancellations, and policy responses. [Attribution: Fopa, National Construction Confederation]