© Reuters. FILE PHOTO: Cranes are seen at the site of an under-construction building in Madrid, Spain, February 15, 2022. Picture taken February 15, 2022. REUTERS/Juan Medina/File Photo
MADRID (Reuters) – Spanish construction companies have failed to bid in 1,455 tenders for state projects so far this year after concluding the offer prices would not cover their costs, the main building association said on Friday.
The works were worth 653 million euros ($638 million) in total and would have been mostly financed by European Union funds, the National Construction Confederation (CNC) said.
Rampant inflation in the price of construction materials and energy is hampering ambitious government plans to boost infrastructure works until 2026, with billions of euros earmarked by the EU for post-pandemic economic stimulus.
Earlier this week, the government proposed a 2023 budget that included nearly 17 billion euros of investments in housing, transport and water projects.
“You can get the idea that the construction sector is not addressing the challenge, when tenders are not being issued at the right price,” the group’s president, Pedro Fernandez Allen, told a press conference.
The group said the number of failed bids had reached a record high this year – including hospital refurbishments, road extensions and energy-poor residential housing projects – with some relaunched at higher prices months after the initial attempts.
The companies estimate that costs have risen by an average of a third this year, with national and government authorities failing to adjust prices on older tenders issued between January and September.
In the past, the average number of failed construction tenders hovered around 20 per year, the group said, rising to almost 500 in 2021 due to price mismatches.
The CNC said that allocated projects have also stalled or been delayed this year because the state price revision system was not working smoothly.
($1 = 1.0231 euros)