If inflation does not come down, the traffic lights and metro suppliers will be closed.

With industrial price inflation approaching 50%, companies that supply traffic lights, street furniture, subways, trains and other city infrastructure are considering not introducing themselves to the new. public tendersWhich can remain deserted if the situation does not change.

“In new tenders, many companies are considering this very seriously, either because there is a possibility of revision (of prices) or they do not take the risk, and in many cases there is no possibility of revision, because the consideration Not done, he explained Joan Tristany, general director of the International Industrial Companies Association (AMEC), to Efe.

According to their data, the biggest “concern” is for companies that manufacture urban equipmenttools for traffic management “And everything that is the concept of ‘smart cities’ (smart City), whose main client is the public sector and within it, city councils, county councils, Renfe and anna.

An example of this is one of its affiliated companies can apply for a competition to be published this 2022 for equipment for the Blue Zone in a major city in the Barcelona metropolitan area.

In this case, while the price per parking meter has only increased by 15% compared to 2016, stainless steel has increased by 46% from 2020 to 2022, and this includes the increase in the cost of energy, transportation , the lack of other components and materials, which forces to buy at risk, that is, without an order.

These cost increases, which the manufacturers cannot effect in the final price when they go to public tenders, are being absorbed in the case of contracts already signed by the companies so far.

price review decree

For tenders signed before material price hikes, the government approved a royal decree—law with extraordinary measures—on 1 March, which allows an extraordinary review of prices rising cost of materialsBut only in contracts for construction works, not for supplies or services.

Thereafter, on 30 March, the executive extended that decree to the possibility of reviewing prices at any stage of the contracting process and those whose bidding takes place the following year, but always in public works construction contracts.

From the AMEC Employers Association, its general director says that he is aware that public resources are limited, so, in his opinion, the solution for the administration is not to give everything it has budgeted, so that a Remains with which to update prices.

,if everything goes upIf all public projects are increased by 20%, this will lead to a 20% increase in the public investment budget, which cannot happen, as it has already been approved”, he specifies.

“Therefore, perhaps if the public administration has a budget of one hundred, it will have to bid low for 80 or 90, and leave a margin if the price rises,” Tristan called for the administration to be tight-lipped. take a decision

re-negotiation between private

As per the latest AMEC status report, six out of ten companies (64,2%) They have already reduced their margin and/or increased delivery times in 2021, and less than half (41.5%) passed on the price increase to their customers.

Tristany confirms that, in the case of private contracts, companies are indeed able to transfer the price increase to the customer and cites the car sector as an example.

“For example, in a contract for the supply of mirrors at a price that, in certain terms throughout the year, is difficult to renegotiate, but it has been renegotiated,” he says.

Another effect on the sale of industrial companies to the private sector is that the validity of budgets is becoming less and less and budgets have already been created which are valid for fifteen days and have a review clause, whereas contracts of large companies are Price for the price of raw materials in.

black market

to access the difficulties of the manufacturers raw material One of the problems they continue to face after the “good” first quarter of the year in order volume is sometimes borrowing electronic materials to be able to complete projects.

In the context of a new covid outbreak in China This is again disrupting the supply chain, Tristany condemns”crystal clear speculation» Used by «Some of the figures that have come up are Commodity Brokers,

That is, companies that have “bought and bought in this situation and waiting for prices to rise and people desperate because they have to install a machine or service a project, and pay almost nothing.” are ready”, as is happening -remember- with microchips.