Hidroelectrica’s investments were blocked in 2019 by the increase of the minimum wage in constructions

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Hidroelectrica’s investments were blocked this year, after the minimum wage in constructions was increased, as a result of GEO 114/2018, and the contractors asked for higher prices, said the president of the Hidroelectrica Directorate, Bogdan Badea.

“2019 was unfortunately a blocking year for new investments, because an equally perverse effect that GEO 114 had in the energy market was in the investment area: that famous salary was introduced in the construction sector, which generated, immediately after the introduction, pressure from all contractors to raise prices on all lines to investments in progress,” said the head of Hidroelectrica, according to Agerpres.

He mentioned, however, that no investment will be made if the company comes out of the profitability area. “We could not go ahead with the investments and we had negotiations for months with the contractors to explain that we cannot increase the price we pay. Some forced, demanded 90% increases in the price of the labor, because they have understood that the worst paid employee of the construction company has to take 3,000 lei and then some coefficients will be applied up to the level of director and they have reached that the price of the work labor has to go up by 90%. But we have profitability limits. Only now, at the end of the year, we managed to sign the contracts for the investments we had, at the old rates, within the limits approved by the GMS, but from the investment point of view the introduction of this minimum wage was a disaster, at least for us,” said Badea.

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