| Work Detail |
The inputs and services that make up the so-called Public Works Index (IOP) and that the Government of Córdoba uses for the redetermination of prices of public works contracts in execution, suffered a forceful and widespread increase last December with increases that even exceeded 100% in the month and touched 500% in 2023.
The increases, although probable, do not cease to surprise due to the record escalation. The thing is that after the devaluation applied by Javier Mileis management shortly after taking office, an increase in many inputs that are quoted at dollar value was to be expected. However, the virulence of the increases surprised the provincial Executive itself and the construction contractors.
The increases further complicate Governor Martín Llaryoras plans to support public works as the axis of his management and, in parallel, as a countercyclical policy in the context of the recession.
The thing is that during the administration of Juan Schiaretti, a good part of the works were financed with current savings, now eroded by the drop in revenue and the rise in inelastic downward expenses such as salaries, even though Llaryora negotiated with the unions. a rise 50% below inflation and in line with provincial income.
Without that alternative, and without funds from the Nation to finance works in the province -in fact, there was never a flow of significant items from the central Government-, the chances of sustaining the intended pace will depend largely on external credit and eventually on the placement of a medium-term bond, although in this case in pesos, the newspaper Comercio y Justicia revealed yesterday in a report.
For now, it is ruled out to refloat the bonds for the payment of debts with suppliers and contractors, a tool that Schiaretti and Llaryora himself used as mayor in 2020. Yes, on the other hand, the discount of certificates by the Bank of Córdoba will continue as a financing instrument for the companies.
In fact, and beyond the governors wishes, sources from contracting companies admitted that there has already been a slowdown in the pace of work and in some cases it has even been stopped, prioritizing funds to conclude more urgent projects due to their importance.
Uncontrolled increases
Regarding the evolution of the 46 items that make up the IOP, 34 showed increases in December greater than the 25% inflation measured by Indec and the 24.19% measured by the Province. Meanwhile, in the year-on-year comparison, 33 climbed above the price index, which for Indec was 211% and for the Province 206.89%.
The most pronounced increase occurred in gabions, which rose 116.96% in December and 441.79% in the last year. Meanwhile, in the year-on-year comparison, those that adjusted the most were the insulators, with an increase of 492.36%.
However, these are very specific products that do not have a general impact, at least in completed works, on the cost structure. However, there were items that are key and that also suffered disproportionate increases. This was the case of asphalt, which increased 77.58% in December and accumulated an increase of 440.86% in 2023. The impact of this increase on road contracts is overwhelming.
For its part, steel tubes rose 83.15% and 355.18%, respectively.
Also important was the increase in other electrical products such as splices and terminals, which increased 89.16% in the last month of the year and 326.36% in 2023.
Otherwise, other key items such as cement and concrete did not have such spectacular increases. However, they were also higher than inflation. Thus, cement increased 28.50% and concrete 28.79%, in both cases in December.
At the other extreme, this is below inflation, the labor force increased 10.74% in the month and 156.7% in the year. Meanwhile, the electricity rate was adjusted by 7.24% in December and only 72.70% in 2023, well below general inflation.
The IOP measures monthly the changes in the average prices of the most relevant inputs used and consumed in the different types of public works carried out in the Province.
The main objective is to reflect the variation in the average prices of a series of factors, “constituting exclusive reference indicators for the Redetermination of Prices of Public Works of the Government of the Province of Córdoba, as established by Decree 800/16 and Resolution No. 30 of the Ministry of Finance.”
Business concern
The Argentine Chamber of Construction (Camarco) extraordinary convened its Federal Council for next Thursday to "define lines of action" in the midst of "a generalized paralysis of public works" that threatens 1,400 companies.
The call was announced last Monday "given the delicate situation that the construction sector is going through in the country" with "close to 3,500 unfinished projects" and the risk in the activity of "the 1,400 associated companies in Camarco that employ to more than 500,000 workers. |
