What happened
The Confederación Nacional de la Construcción (CNC) has issued a warning about the cost overruns affecting public works in Spain. According to Merca2.es, these overruns have reached up to 30% in some cases, especially in road maintenance. This situation has led the CNC to send a letter to the government requesting urgent legal changes to review prices in contracts.
The president of the CNC, Pedro Fernández Alén, has led this initiative, stressing the need to amend both the Ley de Contratos del Sector Público and the Ley de Desindexación. The CNC argues that the current rigidity of these laws concentrates all the risk of rising costs on construction companies, which creates a significant imbalance in the sector.
The situation has worsened because of escalating energy and material costs, exacerbated by tension in the Middle East. According to Merca2.es, 90% of Spanish construction companies have already been affected by these increases, and there are fears that thousands of jobs are at risk if measures are not taken to update contracts with real market prices.
Why it matters to a construction company
This problem directly affects construction companies, especially small and mid-sized ones, which are the most vulnerable to changes in input costs. According to Merca2.es, the impact of cost overruns is particularly severe in road maintenance works, where contracts signed before February 2026 do not include price revision mechanisms.
The market context is difficult. Construction companies face an environment in which energy and raw material prices keep rising, which increases the pressure on their profit margins. In addition, the Banco de España forecasts inflation of 3.6% for 2026, which adds a new layer of uncertainty to these companies' financial planning.
From a practical standpoint, construction companies are forced to evaluate their projects more cautiously. The lack of price revision can lead to abandoned works or poor execution, which affects not only the company but also road safety and the end users of the infrastructure.
What changes in day-to-day site operations
In day-to-day site operations, these cost overruns force construction companies to adjust their workflows. Project planning becomes more complex, and managing financial risk becomes a priority. Quantity takeoffs, payment certificates and purchases must be reviewed constantly to ensure that projects stay within budget.
Budget management becomes more complicated, since companies must factor the impact of energy and raw material costs into their calculations. Payment certificates, which are essential to secure payment for work performed, must be accurate and reflect cost increases in order to avoid liquidity problems.
The first to notice these changes are site managers and purchasing managers, who must watch market fluctuations and adjust their strategies accordingly. Collaboration between the company's different departments becomes crucial to minimize the impact of cost overruns and ensure the viability of projects.
Specific cases
One specific example of how companies are tackling these challenges is the inclusion of price revision clauses in new contracts. Although not every company can afford this flexibility, those that do are better positioned to absorb cost increases without compromising their profitability.
Some construction companies have started negotiating with their suppliers to lock in fixed long-term prices, which gives them greater control over their costs. This strategy, however, requires careful planning and a solid relationship with suppliers to be effective.
For these measures to work, it is essential that companies have a competent project management team with experience in contract negotiation. They must also be willing to invest in technology that lets them monitor their costs in real time and make quick adjustments when necessary.
Data and context
According to Merca2.es, 90% of construction companies in Spain have already felt the impact of rising energy and raw material costs. This figure is alarming, as it indicates that most companies in the sector are operating under significant financial pressure.
This phenomenon is part of a broader trend in the construction sector, where input prices have been rising steadily in recent years. The current situation reflects geopolitical tensions in the Middle East and the global energy crisis, which have worsened existing problems.
However, the data does not reveal the long-term impact these cost overruns will have on the industry. Although the CNC has asked for legislative changes, how long they will take to implement and how effective they will be in easing current problems are uncertain factors that companies must consider in their strategic planning.
Risks and limits
One of the main risks associated with these cost overruns is longer project delivery times, which can lead to contractual penalties and damage to construction companies' reputation. In addition, the lack of price revision in short-term contracts turns every project into a potential financial risk.
In some cases, it does not pay off to go ahead with a project if costs exceed the expected benefits. Companies must be able to identify these cases and make difficult decisions about whether to continue their projects in order to avoid larger losses.
Organizational risks are also significant. The pressure to cut costs can lead to staff reductions or lower quality materials, which in turn can affect the safety and quality of the work. Companies must strike a balance between maintaining profitability and ensuring the quality of their projects.
What a company can do now
Companies can take concrete steps to mitigate the impact of cost overruns. One is to review their current and future contracts to include price revision clauses that let them adjust their rates according to market changes.
When making decisions, companies should consider factors such as contract duration, the volatility of input prices and their ability to absorb cost increases. It is crucial that companies assess their financial situation and operational capabilities before committing to new projects.
A realistic step for companies is to take part in the free pilots offered by Bloqbase, which can help them manage their projects better and adapt to changing market conditions. This collaboration with Bloqbase can give them the tools they need to navigate the current complex environment.
Sources
Merca2.es: https://www.merca2.es/2026/06/25/abandono-obras-publicas-sobrecostes-30-2405143/