“The price for 70% of the products has increased. There is a 15%-20% increase, particularly for plastic materials, copper wires, electrical and hydraulic appliances. The price has been rising for two months”, said a seller of construction materials.
The general secretary of the Albanian Constructors Association listed some of the reasons behind a spike in prices.
“These costs are due to a rise in international transport costs and in the prices of raw materials on the stock market. The price of iron, which before the pandemic, or a year ago, was €600 per ton with VAT, today equals €1,015 with VAT “, said Dervishaj.
But this price difference is not being reflected in the standard level of prices that the government is using when calculating funds to be accorded for every building contract.
“The state is not reflecting these prices. All builders, knowing that the state is the largest investor in the field of construction, all these budget forecasts are based on the 2015 manual”.
The law on public procurement does not allow a change of costs in case of rising prices. But if the increased costs are not reflected in the project, then the construction company may proceed with a scarcer quality in order not to lose its profits.
“A builder who has won a tender with the price of the iron fixed at 107 Albanian Lek per kg cannot do that today, because the cost based on the manual should have been at least 135 Albanian Lek. Of course, that the builder will try to find a way, but I don’t think that he will play around with the amount of iron to be used as it threatens the resistance of the entire structure, but he will try to lower the quality of the other materials”, said Dervishaj.
The Technical Secretariat for Reconstruction says that it is the Enforcement Units that administer the reconstruction funds, hence dodging away from their responsibility.
In spite of their reservations, the associations monitoring the implementation of the reconstruction projects admit to the challenges that builders are facing. Some of them wanted to terminate the contract but faced costly penalties.
The Albanian Development Fund, tasked with the implementation of the reconstruction program, declares that companies are obliged to finish construction work according to quality contracted and in a timely manner.
But it appears that the issue of how to keep up with quality and deadlines amid high prices is not a matter of concern to state institutions.
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