Valencian construction firms have been alerting for months to the impact of rising costs on public works. The increased prices of materials, machinery, and the lack of labor have reduced interest in many tenders and multiplied the number of unassigned projects. In fact, between January and April 2026, public administrations in Valencia province tendered 391 works, but only 47 were awarded during the same period.
This is according to data from the Association of Concessionary Construction Companies of Infrastructures (Seopan), which estimates the budget for projects put out to tender by the Provincial Council of Valencia, city councils, consortia, and local authorities at 269.9 million euros. In contrast, the awarded works amounted to 97.9 million euros.
This snapshot from the first quarter of the year aligns with the warnings issued by the Federation of Contractors of Public Works of the Valencian Community (Fecoval) and the Federation of Public Works of Alicante (Fopa). Both organizations complain that administrations continue to tender projects with prices from one or two years ago, which no longer reflect the current market situation.
Added to this are the reconstruction works following the Dana storm on October 29, 2024. The concentration of activities in the same territory has increased the demand for materials, machinery, and labor, further driving up execution costs. The result, according to data from Fecoval and Fopa, is that since last January, 118 public works have been left vacant, and another 178 have received only one bid.
Public works investment in Valencia province is unevenly distributed among different project types. Nevertheless, projects related to education and urban development accounted for the largest budget share in both tenders and awards between January and April. In this regard, the administration tendered 43 million euros for educational centers and 44 million for urban development, leading both categories in awards with 37 and 24 million euros, respectively; followed by awards for works classified as "various," totaling 13 million euros.
However, the category with the largest tendered budget is supply networks and collectors, with 60 million euros, and it does not rank among the top three in awards, where it only accumulates four million in contracted works. In fact, it is in hydraulic infrastructures where the most works remain pending, despite being the category that concentrates the most investment.
At the other end of the spectrum, categories such as ports, housing, or health barely have a presence in the province's public contracting. Port works were tendered for less than 300,000 euros, housing for less than three million, and health-related works, with nine tenders for 1.6 million euros, only registered two awards.
Public works do not attract the same level of interest from construction companies. In Valencia, the awarded companies offered an average discount of 9.78% on the maximum price set by the Administration at the beginning of the year. This figure reflects the margin companies are willing to concede to secure a contract.
In this regard, urban development saw the highest discount, at 20.62%, indicating competition among companies for these types of contracts. Similarly, administrative works, with 10.79%, and roads, with 10.02%, are also above the average, being some of the categories where construction companies are most interested in adjusting their bids.
On the other hand, health-related works barely reached a 1.15% discount, while educational and supply network projects remained at 4.86% and 5%, respectively. These figures are a consequence of companies not finding room to lower their bids, reinforcing contractors' arguments about the prices set by the Administration, which do not reflect market reality.
Faced with this scenario, the construction sector is calling on the Government to review contract prices to prevent the accumulation of unassigned tenders and ensure the continuity of ongoing projects. Many companies, according to Fecoval and Fopa, choose not to bid because executing the works would mean incurring losses from the outset.
It is worth recalling that on June 2, Seopan presented a series of proposals to the Congress of Deputies to modernize the public procurement system and adapt it to current market conditions. Among other measures, the employers' association proposes updating prices during the preparation and award phases of tenders and reinstating mandatory price reviews in public contracts.
The proposals also include the implementation of economic-financial rebalancing mechanisms in all contract phases, streamlining administrative procedures, and recovering public-private collaboration formulas. The association believes these changes would allow public procurement to adapt to market reality and ensure the execution of investments considered priorities.
According to the conclusions presented during the conference held at the Congress, public procurement represents 4.8% of the Spanish GDP, and improving procedural efficiency would accelerate strategic investments. The employers' association further argues that price reviews and greater flexibility in contracts are key to preventing rising costs from continuing to compromise the execution of works.
