Spanish plans to renew infrastructure hamstrung by 33% surge in construction costs

Spanish contractors have been hard hit by rises in energy and materials (Nicholas Stubbs/
Spanish contractors have failed to make any bids in some 1,455 tenders for public-sector building schemes this year, according to industry body the National Construction Confederation (CNC). In 2021, the number of no-bids was around 500.

The CNC announced its finding at a press conference on Friday. Pedro Fernandez Allen, the CNC’s president, said companies had turned their back on building work worth €653m after deciding that they would not be able to make a profit from their involvement.

Fernandez Allen said the sector’s unprofitability was the result of rapid inflation in construction materials and energy. According to the CNC, this has led to an average rise in costs of 33% since the start of the year.  

He commented: “You get the idea that the construction sector is not addressing the challenge because tenders are not being issued at the right price.”

Among the projects affected were hospital refurbishments, road extensions and residential housing projects. He added that some of these were rejected after they had been relaunched to take account of the surge in costs.

The trend threatens to hamstring the Spanish government’s plans to modernise the country’s infrastructure with EU funds made available to kick-start European economies after the pandemic.  

Earlier this week, the government unveiled a budget for 2023 that included nearly €17bn of investments in housing, transport and water projects.

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