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Developers crushed under soaring costs

Developers crushed under soaring costs


The construction industry is suffering from the continued rise in raw material prices, and builders are crushed by higher costs as they are deprived of Russian money.

Developers say some private projects under development have been put on hold; ongoing projects were frozen, and projects supported by Russian investors were suspended due to sanctions against Moscow.

Stelios Gavriel, Chairman of the Federation of Construction Contractors Associations of Cyprus (OSEOK), said: “The life of developers has become more difficult as they are no longer able to meet the needs of the market. Fortunately, the last two or three years have been good for us, and we have enough liquidity to support our projects until September. After that, we will no longer be able to buy raw materials for a certain period, as prices are rising daily.”

Gavriel said that the cost of iron last year was 450 euros per ton, while prices currently range from 1,150 to 2,000 euros per ton.

Contractors have agreements that must be respected, which means they cannot pass the costs on to buyers, while on the other hand, importers pass the increase on to developers, he said.

Andreas Demetriades, President of the Association of Large Investment Projects, said that most of the large private projects are frozen due to lack of funding, as Russian investors no longer have access to Cypriot enterprises.

“Large investment projects are on hold until funding is found from sources other than Russian funds. We must turn to the European market, the British market and the Middle East market to close the gap left by the Russian and Ukrainian markets,” Demetriades said.

Chairman of the Technical Chamber (ETEK) – an advisory body to the government – Constantinos Constanti said that the uncertainty in the industry is an obstacle to new projects for investment purposes, but this could be a good opportunity to reconsider the development model of Cyprus.

“If there are investors, we should encourage them to invest in agriculture, energy modernization, photovoltaic parks, technology projects, turning away the easy profits that high-altitude brought,” Constanti said.

Source and photo:, Editor

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