Selective bidding by contractors causes tender price rise

'Contractors are now opting to minimise risk, and are being selective with tenders. This has led to it becoming increasingly difficult to get contractors to tender for more tricky schemes,' said Paul Moore, Head of Cost Research at EC Harris.The report says that in London the rises will be stronger, thanks to the impact of the Olympics and an upsurge in commercial offices, rising to 6.3% over the next year, and 6.5% the following year.'The construction industry has bounced back from the relative slowdown in 2005, and we have seen good levels of output over the last 12 months. With construction workload rising faster then previously expected, building tender prices are also set to follow suit,' said Moore.'The price of the London Olympics went from £2.3bn to £3.2bn, and is now estimated at £9.3bn. With the main construction build running from mid 2007 to mid 2011, it is unlikely that prices will slow down before then.'The biggest risks to the forecast remain an uncontrolled flood of schemes going out to tender and a slowdown in labour from Eastern Europe, which could combine to push tender price inflation even higher,' he said.

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