The regulation envisaging the payment of the price difference experienced due to the exchange rate increases for the contractors doing business with the public came to the Parliament. The contractors reacted to the regulation, which evaluated the price difference payment ratio as 5 to 10 percent.
Tahir Tellioğlu, President of Construction Contractors Confederation (İMKON), said, “If this proposal is enacted in its current form and under these conditions, 40-50 thousands of the nearly 80 thousands companies operating in the public contracting sector will be in a difficult situation. It will cause 600-700 thousands people to be unemployed.”
Public contractors found the 5 to 10 percent payment rate in the regulation that was brought to the agenda of the Grand National Assembly of Turkey (GNAT) and stipulated that "price difference to public contractors" was insufficient. Tahir Tellioğlu, President of the Construction Contractors Confederation (IMKON), the umbrella organization of the contractors, demanded that the price difference be given in real terms.
“APPROXIMATELY 50 THOUSANDS CONSTRUCTION COMPANIES WILL BE IN HARD SITUATION”
Tellioğlu stated that the text brought to the Planning and Budget Committee of the GNAT did not meet the grievances of the sector.
“The text only includes the price difference for the progress payments made between 01.07.2021 and 31.12.2021, it does not cover the 'continuation of the work'. E.g; Even if a price difference of 50 percent is given to the 10 percent part of a 10 million-dollar job, which is done in the above-mentioned time period, it will equal 5 percent of the total price. Therefore, it is not possible to recover nearly 200 percent of input costs with a price difference of 5-10 percent. If this proposal is enacted in its current form and under these conditions, 40-50 thousands of the nearly 80 thousands companies operating in the public contracting sector will be in a difficult situation,” he said.
“600 THOUSANDS PEOPLE CAN BE UNEMPLOYED”
Pointing out that tens of thousands of construction companies with insufficient equity resources will face the danger of bankruptcy, Tellioğlu warned that the sub-supplier sector will be affected by this and that 600 to 700 thousands people may become unemployed.
“Therefore, in terms of both the contractor and the public interest, based on the date of 01.01.2021, it should be ensured that the works are completed by giving a real terms 'price difference' until the completion of the work. He called for the ‘right to liquidation’ with impunity and the return of the guarantees for the works that are financially and technically impossible to continue despite paying the price difference in line with the real market prices,” Tellioğlu added.