Due to high inflation and material prices, construction contracts without a ceiling become more expensive

05 September 2022 | 19:23

/KROSS/ The indexation of construction activities carried out after June 30, 2021 will be without a ceiling. This is included in the new Methodology published on the website of the Ministry of Construction for public discussion. The previous version of the document stated that the work under the old construction contracts could be indexed by a maximum of 15 percent, but since inflation is already greater and the increase in the price of construction materials is an average of 60 percent, the methodology has been changed, reported “Labor bg”.

The document does not limit the effect of the update, and it will be valid not only for the construction activities that are still being carried out, but also for all works invoiced for this period, performed by the construction companies. Contracts that can be indexed are all for which bids are submitted after December 31, 2020.

The lack of indexation was one of the reasons why companies from the sector refused to fulfill concluded contracts, the prices of which have increased several times from the moment of application to the time when they are actually awarded. Because of the problem, the country risked losing European funding, and the municipalities could not fulfill their programs for the renewal of road and water infrastructure.

The public discussion of the methodology published by the Ministry of Construction is 14 days, and the shortened procedure is due to rising inflation, according to the report of the acting regional minister Ivan Shishkov to the Council of Ministers. “Since early 2021, we have seen progressive producer price inflation across the industrial complex. As of 12/31/2021, the general producer price index in industry showed an increase of 33.7 points compared to the values ​​as of 12/31/2020 (from 109.4 to 143.1), which testifies to inflation of 30.78%. In an average annual plan, the inflation in the industry in 2021 compared to 2020 is 16.36%,” Shishkov also wrote in the justification.

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The article is in bulgaria

Tags: Due high inflation material prices construction contracts ceiling expensive

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