Canary Islands public tenders rise but fail to trigger actual construction

The Chamber of Commerce of Santa Cruz de Tenerife has reported a structural imbalance in the Canary Islands, where an increase in official public tenders is not translating into actual construction projects. While official figures for the second quarter show a 30.4% year-on-year increase in public works tenders, a significant portion of these projects remains unexecuted due to a lack of company participation.

Santiago Sesé, president of the Chamber, warned that budget allocations are ineffective if contract terms are not viable within market conditions. Construction companies face difficulties committing to long-term contracts when prices are fixed and unable to account for inflation in labor and materials.

Statistical data reveals a divergence in sectors: while building tenders rose by 112.2%, civil works saw a 40.4% decline, impacting strategic areas such as water management, energy, and ports. A notable example of this issue was the failed tender for the Tenerife South Airport remodeling, a 464.1 million euro project that went unawarded after failing to include compensation mechanisms for unforeseen cost changes.