Construction Employers Are Asking For An Extension Of The European Aid To Avoid Losing Money

2021-02-22   |   by CusiGO

Seopan, the association of construction companies and infrastructure franchisees, believes that the industry it represents will leave by 2020 and will grow again by 1% to 2.7% this year. Hairpins are broad, because the outlook for 2021 is “uncertain,” and employers point out that the strength of the recovery will depend on the budget performance that public administrations can achieve and their ability to manage aid from Europe. Spain expects to reach 34.49 billion euros this year, but regulation of most of these projects will not be completed until September. In this regard, the organization believes that “the question of possible extension of the implementation of these assistance should be raised with the competent authorities of the European Union”.

“Managing more than $34 billion a year is very complicated. If we start in 2021, everything will be different,” said Julian Nu? EZ, President of seopan, on Monday, describing the industry’s performance in 2020 and the organization’s prospects. It brings together Spain’s largest public infrastructure construction and management companies. “This is another issue of European deadlines, and the negative impact of covid on economic activity will largely affect 2021, if not the whole year; a longer deadline should be considered,” added the chairman of employers’ organizations, As a result, the focus of European aid is on Brussels, not on the Spanish public administration. In this regard, it was not until 31 August that the European Commission waited for a resolution on the rehabilitation and rehabilitation mechanism, and it is a matter of concern that more than 24 billion people are associated with the mechanism.

However, the Spanish government has not been spared in budget implementation. Last year, with the overall decline of civil engineering bidding (- 25%) and public procurement (- 40%), the budget implementation rate remained at 68.7%. According to seopan, this low figure (that is, 3 out of every 10 euros in the budget has not reached the destination) “confirms the very serious trend that began in 2013.”. In this year, there was a downward turning point in the number of employers, resulting in an average budget implementation rate of 63% in Spain in the past five years (2016-2020). This is 20 percentage points lower than the average for the period 2007-2015.

In general, since 2007, of the investment budget of more than $190 billion, the implementation amount is slightly less than $150 billion. Seopan estimates that means more than $20 billion in lost tax returns, and 48000 full-time jobs have stopped. In these cases, the employer pointed out that there was “unreasonable delay” in bidding and awarding the contract; the contract was suspended either because of the abnormally low bid price, the final failure to complete or the insufficient quality, or because of “the budget which is difficult to survive economically”; The problems of interpretation and performance of contract between government and contractor are highly judicialized.

In last year’s performance chapter, the above decline in bidding and procurement led to a decline in civil engineering production (- 0.9%), cutting off the recovery that began in 2019, when progress was made for the first time in many years (4.9%). Residential construction slowed, but still grew (37.3%, over 76% in 2018), while non residential construction contracted by 3%. The epidemic and the resulting movement restrictions have also had a significant impact on traffic on the roads operated by seopan partners. On national highways and expressways, traffic fell 37% from March to December, and 35% in the autonomous region. In both cases, however, it was better able to withstand heavy traffic, with road traffic down 11% and 8%, respectively. In terms of employment, seopan pointed out that the first alarm (March to June) led to the destruction of more than 80000 jobs, but stressed that by the end of this year, the construction industry had almost recovered its pre coronavirus employment level.

Three typical employer requirements were also considered when submitting the report. The first is to ask the government to make more use of franchising schemes (that is, to entrust private companies with the construction and operation of certain infrastructures), which were awarded only 55 million euros last year. The second problem is that the Spanish road network is moving towards a universal toll model for highways. Ms. seopan recalled that, according to her estimate at the time, the implementation of the toll in the 14130 km road network would mean that the state would receive $104 billion from the franchisees who are eligible to participate in these competitions, and then tax about $4.698 billion annually, In addition to saving $850 million in maintenance costs. Finally, employers insist that Spain’s public investment is insufficient to meet the 2030 agenda, including the massive inflow of European funds. In this regard, he pointed out that the estimated investment of 56 billion in 2021 and 2022 is far from the 1986 billion euro in Germany, 185.8 billion euro in France or 93 billion euro in Italy.