Local
geotechnical construction and foundation market, estimated at 93 million euro,
will most probably maintain this year at the 2013 level, according to opinions
of the managers in the area. Significantly dependent on the construction sector,
the geotechnical works market has positive growth perspectives, but lack of
liquidity and excessive fiscal requirements on the market, investors’ low
confidence in market economy are still obstacles against sustainable resumption
of the entire sector’s activity. Another market characteristic at the beginning
of 2014 is the slowdown of public investments, also confirmed by the National
Statistics Institute (INS), which reported for the first quarter of the year, a
27.3% decline of engineering construction sector. There are 25 specialized
companies at national level, Bauer, Octagon, Soletanche Bachy, Terratest
Geotehnic, Zublin Romania and Edrasis Construct S.R.L., being among the
leaders.
According to
Alexandros Ignatiadis, co- founder and shareholder of Octagon Contracting &Engineering- one of the main special foundation and geotechnical construction
companies in Romania, with a 19.6 million euro turnover in 2013- this year will
not be different from the previous.
“The first
trimester brought a 3% contraction of the construction sector, while the GDP
went up by 3.8%, therefore this sector was not a growth engine for the economy.
The private sector was revived by the construction of two malls in Bucharest
and of several factories in the country, but these investments have not
generated profit yet. These results
combined with the activity slowdown in the public sector have led to the -3%
contribution of the construction sector to the GDP “, said Octagon
manager. At the same time the incoming
elections have not influenced positively the construction sector either, due to
political instability. “During elections a great part of investment funds is
redirected, through budget amendment, towards public sectors which can bring
votes, such as social protection, to influence the electorate.” explained Alexandros
Ignatiadis.
Positive estimates for foundation
subcontractors
The 25
companies specialized in geotechnical construction execution, foundations,
bored piles and drilling, which perform works on projects located countrywide,
reported a 93 million euro turnover for 2013, according to most recent data
published on the website of the Ministry of Public Finances. The results show a
4.4% growth against 2012, when the companies reported a total turnover worth
88.7 million euro. Business growth is followed by an 11.4% decline in 2012, on
2011.
In terms of
value, geotechnical construction market ranks at the 2010 level. In 2014, the
sector evolution will keep being influenced by the financing of the
infrastructure and energy sectors works, while the 2015 operations will
represent the results of current political decisions. Failure to cash receivables from the state,
uncertainty related to private sector financing, low value of public
investments in infrastructure and continuous change of the economic stimulation
policies are among the difficulties which will be present on the market this
year. Another fundamental issue is disloyal competition generated by certain
companies which disrespect employment laws, maintaining low quality standards.
New contract awarding rules have not
solved market issues
The new
contract awarding rules, voted by the European Parliament at the beginning of
this year bring, according to constructors, a plus of security and transparency
in public works legislation, but they do not simplify it.
“The two
directives in force will be replaced by three directives and the number of
legislative provision pages will almost double. We have to mention, though, the
fact that the expertise and qualification of the personnel will be used as
assessment factors when the level of performance significantly depends on the
quality of the personnel involved in the execution of the public acquisitions
contract. At the same time many controversial and contradictory aspects remain
unclear, which leads us to believe that this new rules package reaches its
purpose only partially.” explained ing. Carlos Vasquez, Country Manager al
Terratest Geotehnic.
The new
rules do not solve the prioritization issue or the issues related to the lowest
price criteria. “This can significantly affect the quality of delivered
projects. More detailed and deep changes regarding this aspect are necessary.”
said Octagon shareholder.
