The construction employers' association has opened several fronts to request an upward revision of the price of public works contracts, both future and already awarded, to cope with the increase in costs and raw materials. "We are having 25% more cost of public works that we are carrying out at this time, with contracts already signed. We have a 24% increase in labor costs, more than 37% in electricity and 24% in transportation. It is a tremendous panorama," warned the president of the Association of Construction and Developers of Las Palmas (AECP), María Salud Gil, in the program Buenos Días Lanzarote of Radio Lanzarote Onda - Cero.
According to her, the pandemic has generated "an unusual increase" in raw materials, due to the "shortage of production during confinement and the explosion of demand when the state of alarm declined." "That caused a head-on collision between supply and demand", she specifies.
In addition, there are companies that "had access to purchase" and that made "hoarding" of those raw materials, "producing shortages and an increase that in the field of steel or aluminum, even exceeds 200%."
Faced with this situation, the president of the Las Palmas employers' association explains that they have opened a front at the national level to transfer this problem to the Government. "Among all the territories we have addressed the Ministry of Finance in order for them to understand that they have to re-include the price revision clauses in the specifications, because they had been excluded," she explained, adding that "it seems that the Treasury has admitted that it should be included in the next tenders."
However, she insists that the problem remains in the contracts already awarded, which do not include that clause. "What we are doing is making unofficial consultations, for the moment with the Government, in order to glimpse the possibility of price revision," she points out in this regard.
In addition, she adds that "in the meantime", they have "armed" the associated companies with "legal arguments so that they either request an extension of the deadlines for the execution of the works, admit the revision of prices, or modify the contract for reasons that have arisen that are more than justified."
"The best expectations and the biggest problems to develop them"
Regarding the situation that the sector is going through, María Salud Gil admits that construction and real estate development have "maintained a line" despite the pandemic, since they did not see their activity stopped during confinement either. "Despite the fact that in recent years the sector has negative figures in terms of public investment, it is true that private activity has been very dynamic," she acknowledges.
However, she insists that the problem lies in the imbalance generated by the increase in costs. "If I had to make a portrait of the sector at this time, I would say that it has the best expectations of the last 15 years and the biggest problems to develop them of the last 15 years.".
In this regard, she also highlights the "future explosion" that is expected of European investment, through economic recovery funds, but fears that many companies will be left out.
"It is a challenge that we all have to face and we do not decline, nor are we in a situation of pessimism, but we are very proactive, very efficient. We are being very collaborative, proposing initiatives, and of course we are willing to work to help these funds stay in the Canary Islands," she says.
