Delta ACM, Euro Construct Trading ’98 and Octagon have gone insolvent since the beginning of 2018. The projects they had put them among the top 20 construction companies in Romania in the past.
The delay in starting certain contracts, the suits against them for non-payment by suppliers, the failure of beneficiaries to pay, the surge in construction material prices and of labor costs are the reasons the officials of those companies cited at the time their businesses went insolvent.
“The rise in prices that the Emergency Ordinance 114/2018 (on taxation changes) required cannot be put into the contracts signed prior to the adoption thereof, which means companies have to swallow these cost increases. Under the circumstances, other insolvencies may occur. The companies working on public work contracts are the most vulnerable,” says Laurentiu Plosceanu, chairman of the Romanian construction entrepreneur’s association ARACO.
Octagon Contracting & Engineering and Delta ACM are among the top 20 insolvencies of the first half of 2019, ZF has found, along with ACMS Constructii Civile, a company of Vlad Bitoiu, according to listafirme.ro. ACMS Constructii Civile posted RON41 milion revenue in 2018, slightly down on the previous year, almost RON9 million losses and had 91 employees, according to Finance Ministry data.(EUR1=RON4.7272)
(English version by Loredana Fratila-Cristescu)