Spanish Tax Payers to Rescue Developers and Banks Again

Yet again, Spanish government will have the tax payers take up a private debt. An agreement with the 6 major Spanish banks and the property developers involved in the financing and constructing of 10 tollroads in Spain, currently in the red figures, has been signed to pay at least an amount of 2.300 million euros to pay off their private debt.

The creation of a 100% public company called Empresa Nacional de Autopistas is foreseen for September next. The aim of the company will be to bring the accounts back in order, and privatise the toll roads again, once making a profit.

Consumer organisation FACUA rejects this agreement, stating that once again, the interests of major banks and enterprises take preference over those of the majority of the Spanish population, facing unemployment, abusive mortgage clauses and shortage of funds to even pay the electricity bill.

According to FACUA the figures in the business plan of the banks and the developers grossly overestimated the amont of users of the tollroads and the costs for realising them were heavily burdened with higher than calculated pay-out amounts to property owners and not-calculated works in the construction process.

FACUA emphasises that a similar public company was created in 1984, to bail out practically the same banks and developers, being in operation until 2003 when the toll road infrastructure was reformed and they were showing profit margens again. Then the toll roads were offered in concession.

They fear a repeat operation and have denounced the proposal of the constructors, to guide traffic from the public roads onto the toll roads, having the users pay for their un-avoidable use of that stretch of  road, thus quickly restoring rentability of the tol lroads.

Another example of how Spanish government lets the public carry the burden of extremely poor management of funds and private business decisions.

Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.