Serbian government adamant to keep large-scale construction projects going despite crisis

A meeting of representatives of the Ministry of Construction and construction companies is expected to be held next week to see how to mitigate the effect of rising prices for construction materials, which is why some EU countries have given up on already contracted projects. Serbia has no such plans for now.

Building materials prices, which, following the world market trends, rose in the second quarter of last year and are not stopping. Exactly in one year, the price of metal-based products increased by an average of about 70 percent, wood over 50 percent and some other materials even 100 percent.

However, construction has not stopped in Serbia, which is not the case in other European countries, including Germany.

One option to deal with the galloping building material prices is to enter a clause in the contract which says that the price of building materials will be adjusted to global market trends. This price difference, from the moment a contract is signed until it is actually implemented, is the reason why companies might question the continuation of their construction projects. Can this especially put large infrastructure projects in Serbia at risk?

When asked what can be done to ease the situation for the construction sector and what guidelines do neighbouring countries like Croatia follow, Ivana Vuletic, from the Serbian Chamber of Commerce, explains that there have been several recommendations inviting companies that are working with state authorities as clients to contact the Chamber if the increase in building material prices exceeds 10%. However, she notes that such a provision already exists in the Law on Obligations both in our country and in Croatia, and that Croatia has included this provision in a document that contains relevant recommendations.

“It is something similar to what Belgrade authorities did two or three weeks ago for companies working with the city government. This implies that if the growth of prices of individual construction materials required for the execution of the contract is greater than 10 percent, according to official data collated by the State Statistics Office, the sliding scale according to the relevant formula is applied which shows the difference in price. Specifically, if the price increase is 13 percent, the company gets three percent,” explains Vuletić.

(Sputnik News, 21.06.2022)

https://rs-lat.sputniknews.com/20220621/sputnjik-saznaje-akcija-drzave-za-spas-velikih-projekata-u-srbiji–cene-skacu-u-vasionu-1138898075.html

 

 

 

 

 

This post is also available in: Italiano

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