Builders in trouble due to rising prices on the market

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Due to the major problems caused by price growth on the market, which all construction projects face, the Ministry of Capital Investments and the Ministry of Ecology, Spatial Planning and Urbanism have prepared a methodology for determining differences in the price of works.
As the definition of certain guidelines for the practical implementation of the proposed methodology for determining the difference in the price of works still relate to practical issues related to specific implementation by the contractor, it was proposed that the Chamber of Commerce approach the definition of appropriate Guidelines for the implementation of procedures for recognizing the difference in price, and the basis of the construction contract in cases of rising prices of individual elements.

Due to the major problems caused by price growth on the market, which all construction projects face, the Ministry of Capital Investments and the Ministry of Ecology, Spatial Planning and Urbanism have prepared a methodology for determining differences in the price of works.
As the definition of certain guidelines for the practical implementation of the proposed methodology for determining the difference in the price of works still relate to practical issues related to specific implementation by the contractor, it was proposed that the Chamber of Commerce approach the definition of appropriate Guidelines for the implementation of procedures for recognizing the difference in price, and the basis of the construction contract in cases of rising prices of individual elements.

In this regard, at the last session of the Board of the Association of Construction and Building Materials of the Chamber of Commerce, a Working Group was formed consisting of 15 representatives of ministries, companies and institutions, which will create the aforementioned guidelines.

The businessmen agree that it is necessary, as soon as possible, to make good guidelines for the application of procedures for recognizing the difference in price, because they are under a lot of pressure, and some are at risk of activating bank guarantees.

In response to the businessmen’s assessment that the proposed methodology is quite complicated, Professor Miloš Knežević, who was a member of the working group of the Ministry of Capital Investments on the development of this methodology, said that it was widely known and had been applied before, and that the intention was to leave the contractors already a number opportunities to prove the difference in price.

He pointed out that the most important role in all of this is the role of Monstat, which must provide accurate data, because otherwise every contractor would have to analytically prove the increase in the price of materials. As he said, it would be very complex to implement and would require large resources.

– During the further discussion, the businessmen pointed out that Croatia’s experience with the application of the methodology that the Ministry looked up to did not give good results, and that it is necessary to make it as simple as possible and make clear guidelines for works in civil engineering, high-rise construction and other types of construction work. . They especially pointed out that the prepared guidelines must be adopted so that they are equally binding for everyone – it is stated in the statement published on the website of the Chamber.

At the request of the businessmen to the Ministry of Capital Investments, an initiative will be sent to involve other state companies that have signed contracts with construction companies, in addition to the constantly present Public Works Administration and the Traffic Administration, in the issue of public procurement, as well as to invite the Government to create guidelines for the recognition of price differences for all sectors related to public procurement.

Eurocodes

During the session, the representative of the Chamber of Engineers, Slavica Žižak, spoke about the implementation and dynamics of Eurocodes, which represent European standards (EN 1990 – EN 1999) intended for the design of buildings and engineering structures as well as other works and products in construction.

She said that the deadline for their implementation is January 1, 2023, and that the Chamber of Engineers will no longer ask for its postponement.

According to her, it is necessary to organize an information campaign together with the Institute for Standardization and the relevant Ministry, so that there are basic parameters for further work and proper implementation of these codes. Žižak pointed out that it is necessary for 600 engineers to undergo training for the application of Eurocodes, and that so far only 130 of them have done so.

Support measures and Strength is in us

Vice President of the Chamber of Commerce, Nikola Vujović, presented a set of activities and measures to support the economy, which this umbrella association of the economy, which continuously monitors the conditions for performing economic activities, proposed to the Government.

As he said, the crisis caused by the pandemic, further deepened by the Russian aggression against Ukraine, changed global economic conditions and caused disruptions in the goods market. Historically high prices during this year have harmed the position of the Montenegrin economy. Prices have risen sharply for all energy sources, raw materials and agricultural and food products, and shortages have threatened several times.

In the current circumstances, with the realistic assumption that the period ahead will be characterized by uncertainty, it is not to be expected that the economy will bear the burden of the existing or new crisis. Therefore, the role and support of the Government in order to ensure the conditions for conducting business and preserving economic activity is necessary.

Novica Bulatović, director of the Marketing Sector at the Chamber of Commerce, presented the project The strength is in us, which this association, in accordance with the request of the economy, launched on July 1 this year, and is aimed at spreading awareness of the size, strength and importance of the Montenegrin economy for the overall development of the country.

– The aim of the campaign is to increase confidence in the quality of domestic products and services, which continuously stimulates the development of the economy and affirms the potential that Montenegro has at its disposal – he explained.

At the end of the session, the President of the Board, Mile Gujić, informed the attendees that a working group had been formed for the drafting of the Law on Planning and Construction, and that until the end of the year, meetings will be organized on that topic every Sunday, local media reports.

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