The spectre of bankruptcy over the construction industry

The spectre of bankruptcy over the construction industry

The continuous growth of building materials and labour costs is killing off the companies in the construction industry. As a result, it may lead to the loss of up to 85 000 jobs and the loss of 4.2 billion in EU funding. In addition, contractor bankruptcies will cause delays in the implementation of the investment from 20 to 26 months.

The solution to this situation is to valorise the contracts, and its cost would be lower than the termination of contracts and new tenders. The cost of valorisation would cost from PLN 1.6 to 2.7 billion. On the other hand, the costs of completing unprofitable investments by new contractors would amount to PLN 4.7 billion, and the losses related to the bankruptcy of contractors would exceed PLN 10 billion.

The current situation also poses a threat to public finances, which will lose up to 89% of their value on termination of unprofitable contracts and price increases in contracts concluded with new contractors.

Source: www-money-en.cdn.ampproject.org/c/s/www.money.pl/gospodarka/budowa-drog-i-kolei-branzy-grozi-krach-fala-upadlosci-i-likwidacja-miejsc-pracy-6415477462739073a.html?amp=1

 

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