The stoppage of local government investments in Poland as a result of the pandemic caused construction companies to submit increasingly aggressive bids in the remaining tenders announced in the second half of 2020 – warned participants of the debate during the European Economic Congress in Katowice (September 2-4, 2020).
The construction industry – in which about a million people work in Poland and which is responsible for 10 percent. Polish GDP – is one of the least affected by the economic effects of the coronavirus pandemic
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– I am afraid that for the next two three years, as an industry, we will be killing ourselves with prices – said Artur Popko, vice president of Budimex SA.
The drop in prices offered in tenders for road construction was confirmed by Tomasz Żuchowski, acting General Director of National Roads and Motorways.
– This year, we signed contracts for the construction of a category S road for PLN 42-43 million per kilometer. Currently, the same companies quote the price 10 million PLN lower – said Żuchowski, citing the tender for S19 in Podlasie as an example.
He expressed concern that underestimating the costs may in the future result in problems with the completion of construction by contractors. Therefore – as GDDKiA assured – all open offers are submitted for analysis by the board of industry experts at the minister of infrastructure and to teams with the participation of representatives of the banking sector.
According to Artur Popka, the construction industry – in which about a million people work in Poland and which is responsible for 10 percent. Polish GDP – is one of the least affected by the economic effects of the coronavirus pandemic (e.g. in the case of Budimex, the decrease in the value of contracts was only 5% in July, compared to July of the previous year).
However, entrepreneurs fear that in the next two or three years there will be insufficient funds for private and local government investments. – We already notice today that local government investments have actually been completely suspended – said the vice president of Budimex.
According to him, in this situation, the industry is counting on the support of local governments by the government, announced by Minister Jadwiga Emilewicz, from September in the amount of 12 billion for investments.
Construction companies also appeal to investors such as GDDKiA or PKP Polskie Linie Kolejowe to accelerate further investments in the new EU financial perspective for 2021-2027.
– The construction industry is accelerated and is prepared to implement multi-billion investments, which is why dynamics in announcing future tenders is so important – said Marita Szustak, president of the Land Transport Chamber of Commerce and Track Tec Construction during the debate.
In response to the acting head of the General Directorate for National Roads and Motorways, he announced that another meeting with the construction industry was scheduled for September 16 to inform about the investment tasks planned for 2021.
On the other hand, Arnold Bresch, member of the management board for investments of PKP PLK, emphasized that the company has already prepared projects, documentation and feasibility studies in order to introduce contractors to construction sites from the beginning of the new financial perspective.
– A positive signal for the market should come from new programs that are currently being closed, such as the reconstruction program – said Bresch. According to him, the program will include both large projects and small tasks for smaller companies.
– If the tenders are divided into smaller ones, the market will be stable, and the prices offered by contractors will be less diversified – concluded Marita Szustak.
The participants of the debate also appealed for greater flexibility to the Polish banking sector to lower margins for construction companies on advances necessary to start construction.
There was also a discussion about the contractor certification system proposed by the government and state-owned road and rail companies. It would reward reliable companies in tenders “at the expense of those who spoil the market”. According to the construction industry, the idea is good, but it may take many years to implement.
Representatives of construction companies also positively assessed the introduced changes to the public procurement law. According to the vice-president of Budimex, the new law is very pro-executive and introduces partnership of both parties in contracts: the contracting authority and the contractor.
– We will have indexed contracts, there will be limited penalties, the price will not always decide on the choice and the shortening of the project implementation deadline may be rewarded – emphasized Artur Popko. He appealed to GDDKiA and PKP PLK to negotiate contracts in such a way that the risk of investment implementation does not rest solely with the contractor.
In this context, he pointed to the innovative solutions proposed by the contractors, resulting, inter alia, from from the ecological policy of the European Union. – Such innovations cost money and we expect that they will be rewarded in tenders by contracting authorities – said the vice president of Budimex. According to him, contractors often do not propose new technologies because their use is associated with a high risk for the contractor, with a 10-year warranty expected by the investor.
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