site.btaPrime Minister, Bulgarian Construction Chamber Representatives Discuss Ways to Facilitate Price Indexation in Construction Contracts

The government is looking for a way to facilitate price indexation on construction contracts awarded under the Public Procurement Act (PPA), the Council of Ministers press centre said here on Tuesday. Prime Minister Nikolay Denkov held a meeting with representatives of the Bulgarian Construction Chamber (BCC) which concluded that there is a need to improve the rules regarding this issue.

Denkov said he expects concrete proposals in this direction, prepared jointly by the BCC and the Regional Development Ministry. He made a commitment that the Council of Ministers will change the methodology for indexing the already agreed prices based on the proposals. The government is also ready to propose changes to the PPA if necessary.

The financial resources for the indexation will be sought to be included in the central budget for 2024 and allocated to the individual ministries that are contracting the specific construction contracts..

The Prime Minister listened to other demands of the representatives of the construction industry, among which was not to reduce capital spending. The sector warned of an imbalance between the rights and obligations of the parties to public procurement contracts, which favours the contracting authorities.

The BCC representatives objected to the amendments to the PPA, according to which insurance instruments, the so-called "bonds", are severely limited as a guarantee for good performance of construction contracts. This will prevent small companies from participating in tenders and will reduce competition, they argued.

According to them, the PPA does not take into account the specificities of the contracts for the award of works, which makes their implementation difficult. They expressed belief that model contracts should be developed to replicate the principles set out in the practices of the International Federation of Consulting Engineers.