Marked rise in spending on public construction contracts in first half of year

Construction firms won almost 40 percent more in public contracts in the first half of 2014 compared to the same period last year, according to a study quoted by the Czech News Agency. In total, some CZK 80.755 billion in pubic construction projects were awarded in the period in question.

Photo: Kristýna Maková

A report produced by the engineering and consulting company ÚRS Praha found that spending rose by 38.7 percent in the first half of 2014. In July alone almost 800 public building contracts worth CZK 15.724 were inked.

In seven months, the value of contracts awarded for ground constructions, meaning mainly for buildings, rose by 12.9 percent year-on-year to CZK 20.246 billion. The volume of orders for engineering construction also jumped, by 50.2 percent to CZK 60.5 billion, the study found.

The numbers made public on Monday have been influenced by a new law on public procurements that has been in effect since January this year. It raised the value under which construction projects must be made public from an original figure of CZK 3 billion not including value added tax to twice that amount.

For that reason, the comparable year-on-year number and value of contracts agreed could have been even higher, said Zdeněk Kunc, ÚRS Praha’s director for engineering activities. The influence of this new methodology with regard to the trend in procurement procedures will be increasingly seen in coming months, Mr. Kunc told the Czech News Agency.

Close to 1,000 firms received public construction contracts in the first seven months of this year. The highest volume was won by Skanska, which triumphed in 49 tenders for a total of CZK 4.325 billion. The construction giant will also take in a further CZK 447 through projects carried in out in consortia with other firms.

The value of contracts awarded by the government sector increased by 20.8 percent to CZK 32.762 billion. Municipalities signed construction contracts for CZK 40.21 billion, a rise of some 73.6 percent. Their share increased by 10 percentage points to 49.8 percent.

The largest volume of orders was placed by the Railway Infrastructure Administration (SŽDC), with a total of 75 contracts for CZK 16.439 billion. Prague placed first among Czech cities with 18 orders for a total of CZK 1.46 billion.

The largest single public work contract issued in the period in question came from ČEPS (Czech Electricity Transmission System Operator), and was for a power line expansion project. GA Energo technik, ELEKTROTRANS and Elcon Bratislava jointly won that CZK 2.7 billion contract.