Background information

The war in Ukraine is having an economic impact on the activity of companies in the building and public works (BTP) sector, due in particular to the significant volatility of the price of construction materials and the high level of fuel prices. Several measures have been announced to support companies in the sector.

Content of measure

Addressing the consequences of the crisis in public procurement

The shortage of raw materials and the rise in supply prices are likely to have consequences for the technical conditions of contract performance. A circular dated 1 April 2022 specifies the terms and conditions for amending public procurement contracts, when necessary for the continued performance of services. This circular encourages public actors to suspend contractual penalties and to insert a price revision clause in all future public procurement contracts.

Taking account of price increases

Construction indexes are currently published 80 days after the end of the month. These indexes will now be published 45 days after the end of the month, in order to update raw material prices more quickly in the execution of contracts. This new methodology has been applied since the beginning of May with the update of the February indexes. The March indexes will be published in mid-May instead of mid-June.

Reactivation of the crisis units

In each department, the crisis cells provided for during the health crisis by a circular dated 27 November 2020 will be reactivated. They bring together, under the aegis of the prefects, the professional federations of the sector, local distributors and manufacturers and public and private contractors to provide a forum for consultation on the subjects of tension in the sector. In addition, in each region, a "resilience referent" will be appointed to lead the networks of players whose mobilisation is essential, to ensure regular monitoring and to remove any difficulties that might slow down activity.

Setting up temporary aid for public works companies

Public works SMEs (i.e. companies with fewer than 250 employees and an annual turnover not exceeding €50 million or a balance sheet total not exceeding €43 million) are particularly affected by the rise in the price of non-road diesel, which has risen more significantly than road diesel. They will therefore benefit from specific aid. This aid, with an overall budget of €80 million, will be paid in one go and will be proportional to the turnover of eligible companies. It will partly compensate for the increase in the price of non-road diesel, with the estimate that the cost of non-road diesel represents on average 2.5% of the turnover of companies in the sector. It should be noted that building contractors also benefit from the €0.15 per litre discount that applies to non-road diesel.

Postponement of the reform on non-road diesel

The government has taken note of the request of professionals to postpone the reform abolishing the tax advantage on non-road diesel (GNR), which was supposed to come into force on 1 January 2023. Given the increase in prices, the government recognises that the conditions for implementing this reform are no longer met.

Use of measure

New measure, not available.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Sector specific set of companies	Does not apply to citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• Social partners jointly
• Main level of involvement: Sectoral or branch level

Involvement

Sectoral social partners have been involved in the design of there measures (mainly the employers' organisations).

Views and reactions

The measure was welcome by the employers' organisation and supported by trade unions. On the employers' side, the Confederation of Crafts and Small Building Companies (Capeb) has welcomed some of the measures presented by the government 'which go in the right direction'. However, it regretted that 'certain proposals specific to the building trade have not been announced at this stage and calls on the government to complete the measures'. Because they have been strongly affected by the health context, the craft building companies cannot continue to suffer such important and unpredictable cost increases. Their survival depends on it', said Jean-Christophe Repon, president of the Capeb.

The Fédération Française du Bâtiment (FFB), which groups together non-craft businesses, was less harsh with the resilience plan presented by the government. Among the positive points, 'the 15 cent rebate on fuel for 4 months and the postponement of tax and social security charges, which are likely to relieve the treasuries. Now, the protection of treasuries in the building industry is a central point today (...). The revision of prices and the freezing of late penalties in public contracts, as well as the acceleration of the calculation of the LV indexes, are measures expected by the sector.

But the FFB regretted 'that the extension of the State-guaranteed loans (PGE) already signed was not retained, nor was the assumption of responsibility for partial activity caused by a shortage of materials'. For Olivier Salleron, President of the FFB, 'this plan is a first step and is intended to evolve, according to the Prime Minister himself. Given the seriousness of the situation for the profession, the federation will therefore continue to work with the government on a daily basis to relay the immediate difficulties of companies, to strengthen action in favour of the building industry and to alert the public authorities in the event of a failure to show solidarity with the sector.

Finally, the National Federation of Public Works (FNTP) 'asks for clarification and additions. It remains deeply concerned about the context of soaring prices, supply difficulties and potential paralysis of the sector'.

Sectors and occupations

This case is not occupation-specific.

Sources

• 16 March 2022: Press release, CAPEB, Plan de résilience économique et social (www.capeb.fr)
• 17 March 2022: Press release, La FNTP exige une clause de révision de prix pour tous les marchés de travaux, publics comme privés (www.fntp.fr)
• 17 March 2022: Press release, La FNTP exige une clause de révision de prix pour tous les marchés de travaux, publics comme privés (www.fntp.fr)
• 30 March 2022: Circulaire n° 6338-SG du 30 mars 2022 relative à l'exécution des contrats de la commande publique dans le contexte actuel de hausse des prix de certaines matières premières (www.legifrance.gouv.fr)
• 05 April 2022: Décret n° 2022-485 du 5 avril 2022 instituant une aide pour les entreprises du secteur des travaux publics particulièrement affectées par les conséquences économiques et financières de la guerre en Ukraine (www.legifrance.gouv.fr)