Public work represents the 50% of activity in the formal construction sector. But for several months the national state and the provinces have stepped up their payments, which usually take 90 or more days, which in this context of high inflation leaves the companies on the edge of the precipice.
Today during a meeting with numerous members of the Argentine Chamber of Construction, the “extremely serious impact which determines in companies the insufficiency of payments for the works carried out, due to high inflation and the late recognition and compensation of its effects, both by national, provincial and municipal administrations”.
In a statement they stated that everything “is compounded by a growing default on payments in many divisions”.
Gustavo Weiss, president of the Chamber, underlined a clarion who have had meetings with Minister Massa, with Gabriel Katopodis of Public Works, “they serve us very well, but they don’t solve very serious problems with life-threatening companies. level of inflation, high interest rates and arrears create a perfect storm”.
The leader also sees no relief in the future due to the government’s cash restriction.
“Late payments always cause enormous damage, a situation that gets worse in a context of high inflation. default is not compensated for non-payment of interest established by the Law on Public Works”, they affirmed in the meeting.
“This panorama adds to a complex scenario, the product of the inefficiency of the repricing scheme in a context of high inflation, which makes the works absolutely impracticable”, explained the industrialists.
Here’s how they listed the consequences:
Strong impact on employment, paralysis of jobs, impact on business continuity and the industry value chain
Public works contracts have a price updating system since a certain value is set for a work that will be carried out in three or four years. Weiss argues that the formula with the index INDEC it does not represent reality in this context of high inflation. “Added to this are the delays which are even more widespread in the provinces”.
Source: Clarin
