The fact of Turkey's deepening economic crisis has caused serious problems in the construction sector as well as in many other sectors.
As the economic crisis deepens, emergency bells are ringing in the construction sector, as in many sectors that are the backbone of the country's economy.
The crisis in the construction sector, whose costs have increased 5 times as a result of extraordinary events, pandemics, earthquakes and economic problems that Turkey has experienced in the last 5 years, put the contractors who work for the public into a difficult situation.
Many construction companies that could not complete the projects they received from the state through tender procedure due to the increase in cost items either went bankrupt or faced serious penalties.
Despite the problems experienced in the sector, in a special statement made by the Public Contractors Platform to the Milli Gazete, attention was drawn to the repercussions of the economic crisis in the construction sector in recent years.
“THE INDUSTRY HAS DEADLOCKED”
In the statement that drew attention to the economic problems of the developments in Türkiye and the world, it was stated as follows:
"As a result of the pandemic experienced all over the world and in our country and the Russia-Ukraine war, there was a shortage of commodities and raw materials in the construction sector, and the exchange rate increased rapidly. As a result of the extreme and unavoidable spikes, the prices of all imported and domestic materials related to foreign currency in the sector have increased, and the commodity and supply processes have come to a dead end. Afterwards, due to the 6 February earthquake in our country, the construction sector took another blow, instant exchange rate increases accelerated, and its effect on commodity and raw material prices caused public contractors to do the work at high costs. In the process, the sector has been in a deadlock as a result of the sudden price increases due to the increase in the dollar exchange rate from 7.36 TL to 27.20 TL, as well as events such as pandemics and earthquakes."
“500 PERCENT LOSS”
In the statement, it was pointed out that construction costs increased 5 times in the face of these unforeseen price increases.
"The expectation of public contractors to carry out the construction work without giving the right to liquidation knowing that it will lose 500 percent, we are deliberately driven into bankruptcy and does not coincide with any of the principles of equality and impartiality of the law. Moreover, in the face of increasing costs, the contractors who tried to procure a material worth 100 TL for 700 TL, the prolongation of the material supply period from 1 week to 9-10 weeks in this process did not allow the completion of the construction works on time, and thousands of contractors were also exposed to delay penalties due to the lack of time," the statement added.
“Extraordinary and Unpredictable Situation”
In the continuation of the statement, in which the annual increases in cost items are listed, 2020 and 2023 price differences are listed.
"As of 2020, the weight of rebar has increased by 650 percent from 2.95 TL to 19.20 TL, and the concrete prices have increased by 880 percent from 210 TL to 1,850 TL. These increases have affected all materials required in construction activities, whether imported or domestic. The sudden and rapid increase in fuel liter prices from 5 TL to 39 TL is also an indicator of the extraordinary and unpredictable situation. In the face of sudden and excessive price increases, the completion of constructions has become impossible under all circumstances. In this process, public contractors, who continue to make every effort and effort to complete their work, should be supported by granting the right to price difference, time extension and unconditional liquidation in order to complete their current work," the statement said.
“WE REQUEST PRICE DIFFERENCE AND LIQUIDATION RIGHTS”
In the statement, which also includes the requests of the platform, following explanations used:
"As public contractors, in order to protect competition in public tenders, ensure that public investments are not interrupted, and continue to contribute to the country's economy; In the face of the recourse lawsuits filed by the administrations for the purpose of collecting the updated amount of the supply work, which is prohibited by registering as revenue by updating the guarantee and again in accordance with the relevant articles of the law, we request that the contractor companies be amnesty from all these practices, registration amnesty, time extension, price difference and liquidation rights."