Rising Costs Drive Increase in Unawarded Public Tenders Across Spain
Surge in Unawarded Public Works Tenders
Impact of Rising Costs on Construction Sector
MADRID, July 23 (Reuters) - Public works tenders in Spain are going unawarded at a faster rate than after Russia's invasion of Ukraine, as construction companies grapple with rising costs linked to the conflict in the Middle East and growing uncertainty over the pricing of long-term projects, including housing developments, the country's main construction lobby CNC said on Thursday.
Statistics and Trends in Unawarded Tenders
• CNC said in a report that at least 1,130 public tenders went unawarded in the first half of 2026, preventing works worth more than €707 million ($806 million) from starting.
• The monthly pace at which tenders were left without bidders was 16% higher than the level recorded in the aftermath of Russia's invasion of Ukraine, reaching an average of 188 unawarded tenders per month.
Causes Behind the Increase
• The lobby blamed lack of contract price adjustments amid inflation-driven cost pressures.
• Some construction companies are opting not to submit bids for public contracts and are instead scaling back activity to preserve their businesses, CNC President Pedro Fernandez Alen told reporters.
Effect on Small and Large Projects
• More than 82% of the unawarded tenders involved contracts with a base value below €500,000 ($570,350), mainly issued by regional and local governments.
• Rising costs have also affected larger projects worth tens of millions of euros, including judicial, logistics, fuel infrastructure and social housing developments, CNC said.
Challenges for Public Housing Initiatives
• Fernandez Alen said the lack of mechanisms to adjust public contract prices was discouraging companies from bidding for public housing projects because builders could not reliably estimate costs three years in advance.
• CNC warned that Spain's plans to increase housing supply could be harder to achieve unless contractors were given greater protection against cost volatility.
Regional Impact
• In the Valencia region, still recovering from the devastating 2024 flash floods, 127 public tenders went unawarded.
Additional Information
($1 = 0.8767 euros)
(Reporting by Corina Pons;Editing by Alison Williams)
