Shock-up to 140% increase in construction materials

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of Eleni Botas

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The prices of construction materials have climbed to unprecedented levels, skyrocketing the cost of both public and private projects.

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Rising material prices have begun since the fall of 2020, but in recent months, due to rising energy costs exacerbated by the Russian invasion of Ukraine, the situation has now escalated, creating serious obstacles for new contractors to complete new work. companies.

According to the data of representatives of the construction industry, the price of asphalt has recorded an increase of 140% to date.

In particular, from 262 euros per ton, which was on 25/9/2020, on 9/3/2021 climbed to 380 euros per ton, on 29/12/2021 to 432 euros per ton, on 4/2/2022 to 512 euros the ton and on 8/3/2022 reached 627 euros per ton, price almost three times the original.

“With such prices, no one intends to throw asphalt this year”, point out to executives of contractors of the country “until we see if and when there will be a correction in the market”, they typically state

Increases of about 47% are also recorded in the prices of construction iron. In June 2021 its price was at 760 euros per tonne, in November 2021 at 820 euros per tonne, in February at 860 euros per tonne and today at 1,115 euros per tonne.

The prices in the other categories of materials are also high, with concrete increasing by 20% (so far the price has remained stable), while in the last year the prices of plastics have increased by 120%, cast iron materials by 60% and electrical ones by 30%.

In fact, if we add to this the increases by 480% of the average voltage current (from 0.062 euros / Kh to 0.36 euros / Kh), the increase of transport costs by 30% and excavations by 32%, then it is easy to understand no one the size of the problem.

Already a large number of major suppliers of materials to contractors tell companies that there is a destabilization of raw material prices and large fluctuations in the availability of materials that are traded and therefore can not be committed to delivery times and delivery prices. fear of material shortages that may occur.

It is indicative that in its letter a few days ago the Panhellenic Association of Certified Civil Engineers (PEDMEDE), referring to the issue of price increases and in particular to iron reinforcement points out that “the resulting increase is of the order of 37.3% and expected due shortage of raw material, while the shutdown of Greek production factories (steelworks) is rumored “.

The problem is significant for the construction companies that are called to sign contracts for projects that cost and gave bids even two years ago. In this case, either you do not undertake and lose the project, or “you go in”, they emphasize.

The problem also affects projects that were contracted in the past where the prices were much lower and now run with material prices very high, resulting in a serious problem in their smooth execution.

Although most contractors do not raise the issue of scrapping contracts, they stress that they will stop or not start work until the situation is normalized, although no one can at this stage predict when this will happen.

On the issue of price increases in an interview with The Deputy Minister in charge of infrastructure, George Karagiannis, stated characteristically: “The issue of excessive and unexpected price increases observed internationally in raw materials, occupied us at the Ministry of Infrastructure and Transport from the first moment as we are next to the market and listen to its concerns.

We have already intervened and ensured the development of Public Works.

By decision of the Minister, we set the revision rates for about 500 works, in any kind of public project, whether it is road, building or port, but also for a series of materials where we saw excessive price increases and specifically in steel, aluminum, copper, asphalt , wood, PVC and polyethylene.

At the same time, we are promoting a long-standing demand of the market for the final settlement of the issue with the establishment of the Company for Specifications and Pricing of Technical Works and Studies, where the private sector will play a dominant role, where a New Price Observatory will be set up to fully respond. real market prices with those of Public Works “.

Source: Capital

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