To adapt tender conditions, provide guarantee fund and cut "black manpower market" - What does it take to recover Serbian construction industry?

Current conditions at tenders are not adequate for local construction industry which does not have proper capacities, human resources or technical ones or bank guarantees which should follow them. Since 200, construction operations in Serbia has not been the main contractor at capital project, they have been subcontractors everywhere and it disables our construction companies in getting necessary references for works abroad and it leaves them without a significant profit.

This is how Goran Rodic from the Construction Chamber of Serbia in his interview for eKapija comments last year’s statement of the city manager, Goran Vesic – that it is an “alarming” that none of the local bidders did not apply for some tenders the capital released.

Vesic thinks the main reasons for that is lack of information and opinion that tenders are framed (“for bad experience from the past”) and therefore he invited Serbian construction firms to be more active in applying to tenders which Belgrade’s Directorate for construction land releases, outlining that the “only criteria for assigning work will be the best provided terms”. During the meeting with representatives of local construction industry, held October 21 at the Serbian Chamber of Commerce, he announced that during 2015 the capital is planning to release infrastructural tenders totaling one billion dinars and in 2016 two billion which is a great opportunity according to him.

Local construction companies which eKapija contacted mainly were not in the mood to comment the statement while Goran Rodic thinsk that lack of interest of Serbian companies to participate at public auctions could be solved by change of tender conditions.

Long-term projects essential

Rodic outlines that problem is no longer who will apply to new tenders and do future works but who will maintain the existing system and infrastructure. A large portion of manpower does not have essential qualifications and average age is pretty high so a collocutor of our portal warns that Serbia, if it does not do something, could stay without construction operations and greatly without workers in construction industry.

- There are very few companies which can carry out complex works. We will run out of people and then we will have big problems since we will have to hire foreigners for these tasks and then the price will be three times higher – Rodic estimates and adds that one of the main reasons for the fall in number of construction workers is the lack of work so people decided to get other qualifications or to go abroad.

He also says it is a trend of this kind of a situation in construction has been present for a few years now and one of the basic problems, with a lack of staff and inadequate terms at tenders, is the fact that the state didi not provide a guarantee fund for construction companies to get guarantees and references for appearance abroad from.

- The state should support construction in getting guarantees for work abroad. The longer we wait, the more difficult situation will be. If that would start, we would very soon have higher inflow of foreign funds to our construction companies, according to some estimations almost USD 2 billion.

Collocutor of eKapija outlines that the state could support construction sector if it would fight “black market work”.

- Companies must have long-term business so that they could hire people. "Ad hoc" projects and agreements of a few months support illegal hires since it is more remunerative for companies to pay fines then register employees – Goran Rodic concludes.

He thinks possible solution for recovery of Serbian construction industry is that, apart from politicians, “knowledgeable people”, experts in this field, are among decision makers i.e. that guild is asked during preparation and project development and upon adopting new Law on construction.

Marko Andrejic

Građevinska industrijska komora Srbije

Grad Beograd

Privredna komora Srbije

JP Direkcija za građevinsko zemljište i izgradnju Beograda