Rebar price  has risen  drastically

Rebar price has risen drastically

access_time2021-01-15 15:51:32

Prices for construction materials, including rebar, have risen  drastically on the international market.


Georgia exports  rebar mainly from Ukraine, Turkey and Iran, its cost has already increased by 40%.

According to the Caucasus Road Director Paata Trapaidze, the building materials price hikes may increase the cost of projects within the country, including an increase in real estate prices.


"Rebar, both local and Ukrainian, has risen in price due to an increase in world energy usage, as the rebar production requires  high energy consumption. Apart from that, the building materials production is affected by oil price hikes. The infrastructure projects still in the works around the world, moreover, many countries are investing heavily to boost the economy and create new jobs, " he explains.


In Paata Trapaidze’s words, spending on donor-funded  projects remain unchanged in Georgia– in case of rise in price of materials, their cost  is indexed.


"We would like the government to introduce the same practice in the government  tenders, but unfortunately, it’s too early to speak about this  so any company with experience should take this factor into account – if it plans profit at the level of 7-8%, it should be prepared for a 2% decline in case of  price hikes for building materials. But it's better than doing nothing, " Paata Trapaidze notes.

Domus construction believes that such large-scale changes will affect the cost of apartments in the future, but will not cause  a long-term shutdown for the construction sector.


The company representatives also consider it necessary to revise the rules for state tenders considering the price factor.


"If building materials rise in price by 5-10%, the terms of the contract should be revised. When the cost of work can’t be revised but prices suddenly increased, the contract amount may not be enough that can pose  a big risk to business" – say in the company.


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