Tenders for €4.5bn launched in 2016

Slovakia witnessed the lowest number of launched public competitions and expected investments since 2012.

Illustrative stock photoIllustrative stock photo (Source: TASR)

Altogether 4,870 public competitions expected to cost €4.461 billion began in 2016. The number of launched procurements, however, dropped by 33.6 percent compared with the previous year, while the expected value fell by 41.7 percent. This is the lowest number of launched public competitions and expected investments since 2012, the SITA newswire reported, referring to the data of CEEC Research analytics company.

The procurers and subjects that received a subsidy launched a total of 227 public competitions in December 2016, with an expected value amounting to €354 million. The number of tenders dropped 81.3 percent year-on-year, while the expected value was 43.7 percent lower than the previous year.

“The construction of transport infrastructure in 2016 continued, but there was a significant decline in project preparation,” said Slavomír Podmanický, head of Reming Consult company, as quoted by SITA. “No competition to prepare the construction of railway infrastructure modernisation started. This is a result of unfavourable development after the general elections.”

Following the elections, several people were replaced at the Transport and Construction Ministry, as well as in the management of state-run firms, but only for a temporary period.

“Except for the negative economic impact on project and engineering companies, whose revenues dropped by 50 percent in 2016 compared to 2015, it will also have an effect on realisation in the following years as new construction projects will not be prepared on time and with appropriate quality,” Podmanický added, as quoted by SITA.

Moreover, the drop in the volume of prepared orders will certainly have a negative impact on the future development of Slovakia’s economy, said Mário Červenka, head of O.M.C Invest company, as reported by SITA.

The data concerning public procurements suggest that investors have already completed and given orders to specific firms in 36 percent of projects. This represents 23 percent of the total volume of competitions with an expected value of €1.03 billion. The real value, however, amounts to only €936 million, which is by 9 percent less than originally expected. In addition, 13 percent of launched competitions were later scrapped, which means that the orders amounting to altogether €2.84 billion are still underway.

“The drop in preparation of public competitions is alarming, especially in the construction sector where we see a big decline,” head of the Hochtief SK company, Miroslav Beka said, as quoted by SITA. “I hope it is only a result of previous instability and post-election changes at the Transport Ministry, and the situation will improve in 2017.”

Altogether 3,739 public competitions totalling €4.076 billion were completed in 2016, which is a decline of 38.4 percent y/y. Their volume dropped by 16.5 percent compared with 2015. It is the lowest number of completed tenders and total value since 2012, SITA reported.

The annual comparison was significantly impacted by the order of state-run railway company Železnice SR from July 2016 concerning the modernisation of the Púchov – Žilina track for €365 million, according to CEEC Research.

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