The Public Construction Commission (PCC) said yesterday that contractors carrying out public construction projects are now entitled to government subsidies if construction costs have already exceeded the amount stated in the contracts.
The subsidy will be given when the construction materials price index has exceeded 2.5 percent, which is the same as the current policy.
Regarding the subsidy for each specific item, the commission also decided to lower the threshold for subsidies to 10 percent of the entire cost listed for an item, down from 20 percent, in an attempt to attract more bidders.
PCC chairman Fan Liang-xiu (范良銹) said that the commission has put aside NT$17.1 billion (US$560 million) from its annual budget to use as subsidies for contractors.
The statement was read at the legislature’s Transportation Committee yesterday, where Fan was scheduled to brief lawmakers for the first time about how he plans to execute important public construction projects, particularly those listed in President Ma Ying-jeou’s (馬英九) “i-Taiwan 12 projects.”
In February, contractors began asking for help subsidizing construction work because of rising prices for raw materials.
This year, the nation is planning to outsource construction projects worth more than NT$200 billion.
Fan said the new policy would continue until December.
In principle, the policy will apply to ongoing projects. Work that has been allocated to contractors since April 15, when the policy was announced, will not be limited by the 2.5 percent threshold.
Currently, 10,237 public projects are under construction, with total costs topping NT$948.16 billion. The central government is in charge of 5,271 projects, whereas local governments are responsible for the other 4,966 projects.
Approximately NT$8.6 billion will be appropriated to subsidize central government construction work, while the rest of the subsidy will go to fund the local government projects.
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