site.btaConstruction Sector Faces Collapse, Close to 1,000 Companies Are on Brink of Bankruptcy - Construction Chamber

The construction sector is faced with a collapse, over 400 companies of a total of 6,000 in the sector have gone bankrupt and another 600 are expected to follow them this quarter, the chair of the Managing Board of the Bulgarian Construction Chamber, Ilian Terziev, told BTA Friday. Parliament's failure to adopt revisions in the Public Procurement Act that would have allowed the adjustment to inflation of the contracts with public contracting authorities, would worsen the problems in this industry, he said.
 
"The other day we had talks with the Ministries of Finance and of Regional Development and they assured us that the inflation adjustment would go through but that did not happen," said Terziev.

Unfortunately, the contemplated budget revision has nothing for inflation adjustment of construction contracts and divides the companies in the sector, he added.

The Construction Chamber has figured out that some BGN 600 million should be added to the 2022 budget for indexing the construction contracts to make up for the considerable increase of basic materials. If this is not done, a number of infrastructure projects with state or municipal financing, or funding from the EU-backed operational programmes, will be at risk, said Terziev.

He added that all European countries have a mechanism for adjusting public procurement contracts to inflation.

The Construction Chamber will consider future actions and will likely support a protest by employer organizations in late June.