Minister: Existing Laws Enable Builders to Ask for Increase in Price for Their Work

By 15 June 2022
Minister: Existing Laws Enable Builders to Ask for Increase in Price for Their Work

ZAGREB, 15 June 2022 - The current regulations enable builders to demand compensation from the client for increased costs, but the first 10% of that increase on the contracted price is borne by the builders who can seek compensation for the rise on top of that, Construction Minister Ivan Paladina said on Wednesday.

In response to questions about the direction the government will pursue in the expected decision for next week which should address the price hikes affecting construction companies, Paladina said that recognising the difference in prices does not require any annexes to contracts because contractual relations legislation already enables the contracting parties to calculate the difference in price at the request of the contractor. The methodologies for that are familiar in the construction industry, he added.

The first 10% increase in comparison to the contracted price of the works is borne by the contractor, and they are eligible to claim the rest of the difference, the minister explained.

Clients can then hire a supervising engineer, project manager or forensic expert to determine the price difference and document evidence of that price difference so that there is a verifiable audit trail, Paladina said.

Contract prices and works have currently increased by about twenty percent en masse, Paladina said.

So far, there is no estimate of how much it will cost the state to compensate builders for the price hike in construction compared to that contracted.

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