Rise in prices of multiple materials, inflation slide is effective / Thorough awareness through industry groups
Regarding the operation of the sliding clause to deal with soaring material prices, there are voices pointing out that the application of inflation sliding is effective in situations where multiple material prices rise all at once, such as the current situation. Single-item slides for construction under the direct control of the Ministry of Land, Infrastructure, Transport and Tourism cannot be applied because the price fluctuation amount of individual materials must not exceed 1% of the construction cost, as the contractor will bear the cost. Inflation slides can be said to be effective when the total increase in material prices and wages is large. In order to properly use the sliding clause, it seems necessary to deepen the understanding of the contractor side.
At the executive meeting of the Liberal Democratic Party's lawmakers' federation on public construction quality assurance held on the 21st, the Ministry of Land, Infrastructure, Transport and Tourism presented and explained a case where it would be difficult to apply the single-item slide, but it could be dealt with by the inflation slide.
At the time of application, the contractor's burden is 1% of the target construction cost for single item sliding, and 1% of the remaining construction cost for inflation sliding. However, for the single-item sliding price, the price fluctuation amount for each material item, such as fuel oil, steel materials, asphalt, concrete, etc., exceeds 1%. The calculation target is different from inflation indexation, which is the indexation amount for all material price and wage fluctuations that exceed 1%.
In the first place, wages and prices did not rise so much during the second oil crisis in the 1970s, but the price of some oil-related materials soared. There is also the view that if the prices of specific materials continue to rise while the prices of all materials continue to fall, the single-item price indexation will be effective.
The Diet members who attended the meeting requested that the Ministry of Land, Infrastructure, Transport and Tourism, the Japan Federation of Construction Contractors (Nichikenren), and the All Japan Construction Contractors Association (Zenken) take action to accurately convey the purpose of this system to contractors. Nobuaki Sato, a member of the House of Councilors, argued, ``When everyone (materials) is on the rise like now, we should say that there is no point in single-item slides.'' Toshiyuki Adachi, a member of the House of Councillors, pointed out that "there are some misunderstandings in the industry," and called for thorough awareness of member companies through both groups.
