Stál this year is looking for more project work, but there are fewer contracts

Prague - This year, the state administration is issuing significantly more requests for project work than last year. During the first half of the year, it announced 83 contracts, which represents a year-on-year increase of 72.9%. However, the number of concluded contracts for project work has slightly decreased again this year. This follows from an analysis prepared by the analytical company CEEC Research and the Chamber of Public Procurement Administrators (KAVZ), which the Czech News Agency (ČTK) has at its disposal.
The increase in the number of announced tenders for project work is even more evident from the perspective of their volume. According to data published at the end of June 2014 in the Public Procurement Bulletin, the state plans to award contracts worth a total of 1.2 billion crowns. This is a year-on-year increase of 230.8%.
In June alone, the Bulletin published 20 new project contracts worth 118 million crowns, representing a one-third (33.7%) increase in volume.
Optimistic expectations from the change in approach to construction investments and an upcoming construction boom are hindered by the volume of actually awarded project contracts on which companies could have already started working. Year-on-year, there was a decrease both in volumes and in the number of awarded contracts during the first six months of the year.
In the first half of the year, a total of 183 contracts were awarded, which is 12.4% less than in the same period of 2013. The value of contracts awarded from January to June 2014 decreased by 7.5% year-on-year.
"Construction contracts are always a long race. The success and realization of these depend on quality project work, and therefore the amount of awarded project contracts significantly indicates whether the construction projects will actually be feasible. Only when the number of completed project contracts rises significantly can we reasonably expect that the actual buildings will follow," stated KAVZ Vice-Chairman Martin Janoušek.
The construction sector, which is very dependent on state contracts, has lost 443 billion crowns in the post-crisis years since 2008.
The speed of recovery in construction will mainly depend on how quickly new buildings can be designed. "Project preparedness has been absolutely tragic in recent years, especially in the area of roads and highways. As a result, the State Fund for Transport Infrastructure (SFDI) has had problems investing the budgeted funds for construction. In recent years, the SFDI has not managed to implement all planned investments and fully utilize the budgeted funds. Therefore, the current plan of the Ministry of Transport to invest nearly one hundred billion crowns next year, which is approximately double all the funds actually invested by the SFDI last year, is very ambitious," warned Jiří Vacek, director of the analytical company CEEC Research.