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Political stalemate in Spain puts break on public works contracts

Xinhua, August 23, 2016 Adjust font size:

Spain's political stalemate has caused a major reduction in the number of contacts granted by state administrators, which is reverberating among the country's construction enterprises, it was reported Tuesday.

A report published in the El Pais newspaper on Tuesday shows that the lack of government led to a big fall in the number of public works contracts that were granted in the opening months of the year.

The total number of contracts tendered by the state administration during the first six months of 2016 was 3.59 billion euros (3.96 billion U.S. dollars), 24.5 percent down in comparison with 2015, despite the Spanish economy continuing to recover from the economic crisis.

Acting Prime Minister Mariano Rajoy's People's Party (PP) and Albert Rivera's Ciudadanos are currently locked in talks to end eight months of political stalemate which have left Spain without an effective government in 2016.

However, there is no guarantee the talks will succeed and Spain could yet hold a third general election at the end of the year.

Between January and June 2016, the Public Works Ministry granted contracts to public enterprises to the value of 657 million euros, 19.4 percent down on the same period in 2015.

The operating company of the Spanish railway infrastructure, ADIF, saw a 42.5 percent reduction in the value of contracts granted, while there was a 16 percent fall in contracts awarded at ports.

This drop in spending on public works projects to around just 25 percent of pre-crisis numbers has caused concern at SEOPAN, which represents Spain's construction companies and which highlights investment on infrastructure will fall between 15-18 percent in 2016.

Meanwhile, the cement industry, represented by OFICIMEN, says that when a new government is installed one of its first acts will be to design a new plan for public investment, which is at its lowest level for 25 years. Endit