ECONOMY

Adjustment of budgets for projects

Adjustment of budgets for projects

For businesspeople and investors, the timing for decisions may be the worst of the last few decades: The soaring costs of raw materials and energy, historically high inflation, supply chain problems and shortages in skilled staff create particularly adverse conditions. While in construction and infrastructures a solution can be found in the revision of budgets or the delay to project implementation, in energy strengthening investments is absolutely essential.

Although the cost basis has changed, there has been no wave of major project suspensions or investments. As one analyst tells Kathimerini, that may be due to the fact that only a handful of investments had actually gotten off the ground before the price hikes spun out of control. 

“The suspension of a project’s implementation is not the right solution, as it can create problems with staff and make a company’s sustainability tenuous,” one entrepreneur tells Kathimerini.

Instead, ongoing public projects are undergoing a price revision, while new projects are having their budget adjusted in order to incorporate the rise in costs – often also slashing profit margins for contractors.