Construction industry not prepared for giant projects

Too few big players in the game could cause overheating in the market

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June 23rd, 2014 4:17 pm| by admin
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Over the next three years, there will be new building projects in Denmark worth a total 124.7 of billion kroner, but the industry lacks the players big enough to take on the huge projects, according to Børsen business newspaper.

Kristian Lyk-Jensen, the vice-president of the Danish building and property agency Bygningsstyrelsen, told Børsen that this was an immediate problem. “There aren’t enough big contractors that can carry out the big, complex building projects that are under way or that are about to start,” he said.

Contractors pick and choose
A report from Bygherreforeningen, the Danish association of construction clients, and building organisation Realdania shows there will be a huge increase in private, municipal and state building projects over the next three years. For example, there will be superhospitals, housing complexes, prisons and university buildings constructed for a combined value of 124.7 billion kroner. The value of equivalent projects over the past three years is 81.4 billion kroner.

Bo Sandberg, the chief economist at the Danish construction association, Dansk Byggeri, told Børsen that contractors are focusing more on the bottom line and that this sometimes precludes taking on the larger projects.

Henrik L Bang, the head of Bygherreforeningen, described specifically what could happen if the situation continues. “There must be changes if we are to avoid the market overheating and the resultant problems. Contractors can pick and choose and many have already taken the projects they can manage over the coming years,” he told Børsen.

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