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Construction Falls in Honduras

Article Summary:

In the last four years the Honduran construction industry has experienced a decline of 50%, both in investment in road infrastructure and in housing. A major cause of the housing problem in Honduras is the lack of long-term financing.

Photo Credit: Earthcircuit

Original Article Text From La Tribuna Honduras via Google Translate:

Collapsing Construction Industry

The deteriorating economy has impacted terribly Honduras in all sectors of production, including the construction industry that is depressed and has fallen by 50 percent compared to 2008.

A major cause of the housing problem in Honduras is the lack of long-term financing.

So what authorities unveiled the Honduran Chamber of Construction Industry (Chico), in a report presented which shows the fall of investment in roads and in housing.

As indicated, the construction sector has been virtually abandoned in the past six years, according to them, due to the unwillingness of the government to boost the current item, which is not allocating resources for maintenance and enable new sections.

For the case, reported that by 2013 the Road Fund is approved a budget of 800 million lempiras, which is insufficient to keep the entire road network of paved and unpaved country, believing that resources should go to that entity about 2,400 million lempiras.

Chico authorities estimate that it takes about 500 million dollars to put the roads in Honduras in Central America a better level, because right now is the country with the worst roads in the region, even below the Salvador and Guatemala.

The entire country’s road network consists of 14.296 kilometers, which is located 1.197 bridges, with an estimated value of repair is 96.300 million lempiras, about 4,950 million dollars.

On paved roads are 326 bridges in both the 871 unpaved bridges, which are mostly made of reinforced concrete.

It is estimated that 70 percent of the road network is impaired due to several factors, including the increase of vehicles, overloading individual freight vehicles and climate change.

At the same time, authorities believe the boy in many of the roads has not had a proper preventive maintenance and poor quality of work, product and construction companies hiring inexperienced supervisors.

In the case of the road network, it has not been improved in recent years and has been deteriorating for some maintenance.

The reality is that it is abandoned roads and housing projects, which are the only two sectors anticrisis, which can generate employment on a large scale and with an immediacy that no other category, “said House Speaker Alejandro Alvarez.

At the discretion of the employer, the government should take into account that neither agriculture, light industry or industry can generate the jobs needed immediately as construction.

“Now the roads are deserted and we got the surprise that only 800 million was allocated to the Road Fund lempiras, that value is not allowed to be around 16 000 km between the two activities to be supported and maintained,” he said Álvarez .

“Then the Honduran people to get ready in 2013, that this abandonment will result in deterioration of around 30 percent, from 100 billion worth lempiras road network,” he said.

“The concern is the government’s decision not to give the system of roads and housing the priority that the country needs and that although it is mentioned that employment has a purpose,” he said.

While detailed, the construction industry has fallen by about 50 percent compared to 2008, when they were built about two million square meters and are currently under construction less than 600 thousand square meters.

“It shows that with the government’s policy of selling bonds to 15 percent interest rates rose and housing is precarious, because very few people can buy a house in this great interest and will be moored about 20 years,” he added .

“The industry has fallen about 50 percent compared to 2008, we plummet and an industry that has around 350 construction companies, by 2015 we will have 50 or 70 companies.”

“It is a claim that the government has not taken into account when making bids and Road Fund reach 150 companies to participate and keep prices very competitive,” he said.
No resources

The vice president of the Chico, Oscar Calona said that as the housing sector, concerned that there are no long-term resources to finance housing projects.

“That has led to housing developers have decreased production houses,” he added.
He reported that the Honduran Bank for Production and Housing (Banhprovi) has a 3.200 million dam which can not cope due to lack of resources.

“This leads to serious problems due to the housing sector, because they can not build new houses, because there is no incentive to have long term resources,” he reiterated.

At the moment the item is paralyzed by 30 percent capacity, he declared, because in 2011 there were approximately 20,000 homes and this year will reach 12 thousand to 15 thousand homes.

In the case of the road network, said that it has not improved and has been deteriorating for some maintenance.

He said the Ministry of Finance 600 million owed to contractors lempiras Road Fund, the Ministry of Works, Transport and Housing (Soptravi) and other ministries.

“We are trying to meet with the Ministry of Finance to see how to cope with this situation, because we’re about to finish the year and that is detrimental to the country’s road infrastructure, because contractors not having paid what they do is reducing its production capacity. ”

The road system in 2011 contributed directly to generate 144 216 000 lempiras, about 7.283 million U.S. dollars, accounting for 50.28 percent of the generation of the Gross Domestic Product (GDP).

By not paid to contractors different construction and maintenance carried out in the country, it directly affects the generation of 5.32 percent of GDP, which will generate a direct negative impact on the generation of approximately 17,527,000 lempiras plus generation loss of this capital tax generates, once reinjected into the economy and its collaterals.

Total 14.296 Km, structured as follows:
• 3.280 km belong to the primary road network 1 (23%)
• 2.679 km to the secondary road network 2 (19%)
• 8.336 Km to the local road network (58%)
• 3.220 km are paved (concrete asphalt (folder), hydraulic concrete and double treatment and the rest (11.076 km) are not.
• Total existing bridges: 1,197 bridges

Link to Original Article:

From La Tribuna Honduras

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