90 Percent of Construction Public Procurement Tenders Are Delayed

The state needs to react because 90 percent of public procurement tenders for construction works have extended construction deadlines and increased costs, it was stated on Wednesday during the 3rd annual conference of the Croatian Chamber of Economy on public procurement for construction works.

Attorney Mićo Ljubenko from the Law Office Ljubenko & partners believes that the most pressing issues currently relate to foreign bidders, followed by the problem of project extensions and unforeseen costs. He stated that there is almost no significant project without an extended deadline, which causes additional financial costs.

– If 90 percent of tenders have extended deadlines and unforeseen costs, it means that action needs to be taken in some way – said Ljubenko.

When it comes to foreign bidders outside the EU, mainly from China, Turkey, and India, he recommends checking their references, as such companies do not have publicly available data.

– This is not the EU where you can see what everyone has done with one click – emphasized Ljubenko, adding that another recommendation is for companies from third countries to enter into a strict regime of compliance with the Croatian collective agreement for construction.

The collective agreement for wages is the same for domestic and foreign workers, and it cannot happen that foreign bidders, who may be coming to Croatia for the first time, have a more favorable position regarding collective agreements, he emphasized.

He proposes an automatic control method whereby companies working in public procurement must present a union certificate every six months confirming compliance with the collective agreement.

State Secretary in the Ministry of Physical Planning, Construction, and State Property Tonči Glavinić stated that the construction sector has been continuously growing in recent years. He believes that a positive investment climate has been created in Croatia, with a large number of private investments and public investments from the budget and EU funds.

Regarding public investments and the public procurement process, he said that the goal is for signed contracts to be executed according to the agreed price and within the specified deadline.

– For this to happen, technical specifications must be well drafted, but the zero step is also crucial – quality project documentation – emphasized Glavinić.

Otherwise, there may be work delays and significant project changes. The challenges arising from this are a large number of contract annexes, both financial and temporal, and all of this leads to agreed prices and deadlines not being met, said Glavinić.

Commenting on the removal of the Vjesnik building Vjesnik, he said that work is underway on the public procurement process, specifically to ensure that the accompanying documentation is drafted as well as possible. He revealed that the ministry, in cooperation with the Croatian Chamber of Economy, requested informational offers from 34 economic entities and that 17 responses had been received by yesterday.

He also stated that the Ministry of Construction does not have many contracts with companies from third countries, only three or four in total.

Director of the Construction Sector at HGK Katarina Sikavica emphasized that the construction sector in Croatia realizes several billion euros annually through public procurement, so it is very important that public procurements are conducted effectively. She noted that in recent years there has been an increased number of complaints regarding the reputational and technical criteria of bidders from third countries, with an annual increase rate of 20 percent.

– Regarding public procurement in construction, the most important thing is that it is efficient, market-healthy, and aimed at quality investments – emphasized Sikavica.