OPINION

Construction firm gains

In a fully deregulated and smoothly functioning free market economy, where price, cost, and value are determined by the market, one would have no expectations from economic actors. Market workings would determine the risk levels, profits and losses from business activity, and any interference would be limited to resolving issues of transparency and optimizing economic efficiency. However, given the fact that Greece is not a perfect free market, it is normal to demand intervention and regulation, especially against monopolist tendencies. A good example is the case of construction works, which are now absorbing huge funds. It is common knowledge that in the coming few years, until 2005, national and EU funds of about 7-8 trillion drachmas will be channeled into the construction sector. Furthermore, everyone knows that the majority of projects, particularly the biggest and most profitable ones, will be carried out by a small group of construction companies. These firms are fortunate enough to be able to administer huge funds over a short period of time and have the possibility of making huge gains, as principles of competition have been undermined and prices to a large extent controlled by them. The construction market is largely an oligopolistic one, in which firms tend to share the projects among them. Simply said, there are many big projects, the State is pressed for time, the number of construction firms is set, and so there’s plenty of money for everyone. Society has made no claims in light of the situation. But under the present circumstances of imperfect competition, it could raise the issue of connecting the profitable construction projects to certain problematic areas of the economy or the country. Part of the profits, for example, could be used to support the development of the border regions or fund a plan for rescuing Olympic Airways. But who’s going to bother about these?