Harsh workload with insufficient personnel
Portuguese municipalities encounter difficulties in managing construction work, particularly due to the Recovery and Resilience Plan (RRP), particularly in the housing sector. The challenges stem from escalating construction costs and issues with tender processes.
Jorge Veloso, the mayor of Coimbra, points out that there is a lack of interested parties, not just in Lisbon and Porto, but also in other regions like Coimbra. He notes that numerous projects cannot move forward as companies struggle to handle multiple projects simultaneously due to the RRP. Sometimes, thanks to the value of the work, direct adjustments can be made, but there are still insufficient companies with the capacity to manage such a workload. Veloso explains that this issue has persisted for some time, but has been exacerbated recently due to the rush to spend money associated with the RRP.
A similar predicament is reported by presidents of municipalities such as Braga, Ricardo Rio (PSD). Rio expresses concern about the current market conditions, warning that they could jeopardize the meeting of deadlines associated with financing from European funds.
To mitigate the risks of unfilled tenders, Rio proposes setting base prices above market values, longer execution deadlines, and a payment period of no more than 60 days. He also advocates the adoption of construction systems that do not require significant technical specialisation, such as the application of current market materials, thus minimising disruptions to production chains and supply times. Rio further suggests adopting prefabricated and/or modular systems, which would significantly reduce the need for outsourcing labour.
The challenges faced by the RRP are also felt in areas such as Alentejo, where companies in the region, due to their smaller size and the absence of the bureaucratic burden associated with public works, prefer to work for private individuals because it is simpler and offers a higher profit margin, according to the mayor of Montemor-o-Novo, Olímpio Galvão (PS). This sentiment is echoed by the vice-president of the Loulé Chamber, David Pimentel (PS), who notes increased demand for private works due to their less stringent rules and legal requirements, aggravated by the lack of labour, particularly specialised labour, and higher context costs, particularly in the Algarve, especially in housing.
This news story highlights the difficulties faced by Portuguese municipalities in implementing the RRP, particularly in the housing sector, and the proposed solutions to address these challenges, such as alternative financing models, an integrated approach to housing, increased budget allocation, and the adoption of simple construction systems and prefabricated or modular solutions.
In the Algarve region, due to heightened demand for private works, local companies often prefer these over public works, as they offer a simpler process and higher profit margins, according to the mayor of Montemor-o-Novo, Olympio Galvao. Ricardo Rio, president of the Braga municipality, proposed solutions to mitigate the risks of unfilled tenders in the RRP, including setting base prices above market values, longer execution deadlines, and a payment period of not more than 60 days, as well as adopting construction systems that do not require substantial technical specialization and prefabricated or modular ones to reduce labor outsourcing.
