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Saturday 21.07.2018 | Name days: Meldra, Meldris, Melisa
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Selva būve: Latvia and large constructors enable creation of «construction-mayflies»

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe state of Latvia and large construction companies claim there are too many «construction mayflies» – small construction companies that operate for a while and then leave the market. However, their actions directly contribute to the emergence of such constructors, says Rolands Orlovskis, board chairman of the construction company SIA Selva būve.

«This topic has been discussed a lot. Clearly, Latvia would do well with five or six large construction companies and a couple of hundreds of smaller specialized construction companies that would deal with specialized works,» Orlovskis believes.

However, this issue is complicated because, on the one hand, both the state and large builders say they need less construction companies for the construction market to arrange. Yet, on the other hand, their actions directly facilitate the emergence of such small constructors, Orlovskis says.

«The state announces tenders, of which 60% require the lowest price offer. It simultaneously wants «normal» construction companies and the lowest price. The question is whether a normal construction company can ensure the lowest price? No, it cannot. Consequently, groundwork is laid for small construction companies offering the lowest price, even if it is often inadequate. These construction companies often have one board chairman, who also fulfils the responsibilities of secretary, accountant, assistant, cleaner, and one or two other employees. Such enterprise operates for six months or a year, increasing the tax debt that leads to insolvency. And the next construction company is established again,» Orlovskis explains.

He adds that large builders also select subcontractors for certain works, looking for the lowest price. «If a concrete column costs, for example, 100 lats, how can it be concreted for 80 lats? But there is always someone promising to do so. Large constructors will hire the one that bids 80 lats,» Orlovskis notes.

«I also think there should be more construction companies that are real market players and diligently pay taxes; however, in the current situation, this is just an empty talk,» Orlovskis says.


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