The price of raw materials rises and puts business projects at risk

The construction sector fears the direct consequences of unprecedented price rises in raw materials. The escalation of these materials in international markets concerns the construction, conservation, promotion and rehabilitation sector, which warns that if urgent measures are not taken many of the projects that are designed with European funds may be unviable. Before the rise experienced by most raw materials Due to the increase in demand generated by the recovery plans launched by the large economies to alleviate the effects of the pandemic, the sector calls for mechanisms of price review in public works contracts.

Seopan, the employers’ association of construction companies and infrastructure concessionaires, denounces that since the 2007 reform, price review mechanisms are absent since this procedure was no longer mandatory and in practice led to its almost complete disappearance of the specifications. The increase in prices, together with the shortage of some materials, endangers the economic balance of contracts and compliance with deadlines, warns the employer.

The national association of distributors of ceramics and construction materials (Andimac) warns of the negative consequences that this situation has in the sector, compromising both the ongoing activity and the future execution of major investments included in the European recovery plan. From the Association of Companies for the Conservation and Exploitation of Infrastructures, Acex, they already register, for example, losses of up to 40% for each supply safety barrier and warn that this situation can reduce the resources allocated to road maintenance and affect the mobility and safety of users.

The main representatives of OHLA

Large construction companies such as OHLA argue that this forces them to have more caution when choosing contracts and that these increases will have to be passed on. The reform sector also expects an increase, although moderate, since the cost of materials has a weight of up to 35%, while real estate development also points to the final increase due to higher construction costs.

Seopan ask that urgent action be taken in the works in progress with an exceptional rule that allows this situation to be resolved while inflation persists. For new contracts, request mandatory price review mechanisms in the specifications, which would require modifying the Public Sector Contract Law and reviewing the current procedure for determining the price revision indices of government contracts, something in which the employers of small and medium-sized construction companies Anci agree.

Likewise, the employers of the construction sector, CNC, demands regulatory reforms and asks to unlink the Deindexation Law of the Spanish economy in concession contracts. In addition, the European Construction Federation (FIEC) has alerted the European Commission and has asked the member states to implementation of specific price review mechanisms for works contracts in progress.

As reported by the employers, copper and oil prices have soared more than 100%; those of bituminous mixtures, 85%, and those of corrugated steel, 78%. Materials for road works (including cement, plastics, chemicals, aggregates and rocks) have risen by more than 50% and those needed for rail works by 24%.

A historical increase in the price of international maritime container transport with an increase of 485% on the Shanghai-Rotterdam route and 293% on the 8 Eurasian routes with the highest traffic. In addition, the current London Metal Exchange commodity futures price anticipates that High prices in corrugated steel, copper and aluminum will be maintained.


Source: LA INFORMACIÓN – Lo último by www.lainformacion.com.

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