Price adjustment in public works – The request of the manufacturers was satisfied

of Eleni Botas

The Ministry of Infrastructure and Transport set the rates for the revision of public works prices by a decision of Minister K. Karamanlis, published in the Official Gazette, satisfying one of the basic demands of the construction sector as the energy crisis has skyrocketed the cost of raw materials resulting in many of the projects are in danger of stopping or not even starting.

According to the latest data of the country’s contractors, in recent months there has been a large increase in the prices of basic materials, such as metals (iron, copper, aluminum), plastics (PVC, polyethylene, etc.), oil and its derivatives (mainly fuel and asphalt), ranging from 15% to 75%.

These increases recorded since the beginning of the year in basic materials related to the implementation of construction projects, whether public or private, are large and have caused an increase in construction costs of 20% to 30%.

The contracting organizations of the country (STEAT, SATE, PESEDE, PEDMEDE and PEDMIEDE) in successive letters to the leadership of the Ministry of Infrastructure and Transport asked for measures to be taken to address the problem which does not seem to escalate at least until the middle of the year.

In fact, in various letters in recent months, the contractors described in black the situation in the industry, emphasizing that “contractors are required to complete contracts, which were costed and contracted at an earlier time, without being able to absorb the increases. these and legally lead to financial suffocation and inability to complete projects.

As you can see, it is impossible for the contracting world to respond to the new economic environment that has developed, mainly due to the impact of the Covid-19 pandemic on the world market. This phenomenon, which is observed at pan-European level, does not seem to be escalating, but on the contrary is intensifying. “Manufacturers are sounding the alarm about the viability of businesses but also about the risk of losing hundreds of jobs.”

In the published Ministerial Decision entitled “Determination of rates for revision of public works prices, according to par. 23 of article 153 of law 4412/2016 and adjustment of the factor s1 according to par. 7 of article 153 of law 4412/2016 “, it is stated that due to the serious economic consequences of the pandemic (Covid 19) in general, but also in particular in the field of project execution, it is deemed appropriate the corrective intervention of the State to address large variations in the prices of construction materials in accordance with the regulations of par. 23 of article 153 of law 4412/2016.

Also, as mentioned, it is necessary to create an information system for determining the cost of technical production factors, which will include a Price Observatory, a System for Price Analysis and Costing and a System for Unified Technical Specifications. The implementation and operation of the ISPKSPTE and the implementation of the Price Observatory would help in this direction. But until the creation

of the Electronic System for Determining the Costs of Project Production Factors (ISPKSPTE), there is an urgent and urgent need, for reasons of assistance to the construction industry and proper execution of public works contracts, to regulate the revision in the framework of public works contracts.